Boeing Execs Warn of Security Threat in Potential EADS Tanker Win

May 28, 2010

Boeing Execs Warn of Security Threat in Potential EADS Tanker Win

Boeing [BA] executives this week warned of "national security risks" if their European rival for a multibillion-dollar U.S. Air Force contract prevails in the contest.

If European Aeronautic, Defense & Space Co. (EADS), the Paris- and Munich-based parent company of Airbus, wins the competition to build a new fleet of aerial refueling tankers for the United States, the Europe governments that own the company could direct it to interrupt the flow of replacement parts as leverage in a potential dispute with Washington, Tim Keating, senior vice president of Boeing’s Washington operations, told reporters.

The Boeing officials said national security is more of a concern since Northrop Grumman [NOC], EADS’ former partner in the bidding, withdrew its interest earlier this year. Washington would have had leverage over EADS via Northrop Grumman, they said.

"What leverage does the United States have over EADS North America?" Keating asked. "A lot less than they would have over the Boeing Company," he said.

He also warned that the European aerospace giant does "business with countries that are not friendly to the United States." Boeing officials cited as evidence EADS’ marketing of one of its helicopters at an Iranian air show in 2005.

A Pentagon spokesman said the department "would not have welcomed EADS North America’s participation in this important competition unless they were a company in good standing with the Department of Defense."

James Darcy, a spokesman for EADS, said via e-mail that Boeing "is trying to make the competition about anything other than getting the best tanker for the Air Force."