By Marina Malenic
Airbus parent company EADS yesterday filed an 8,800-page proposal to build a new fleet of 179 aerial refueling tankers for the Air Force, a day ahead of today’s bid deadline.
“We feel very good about what we have to offer,” Ralph Crosby, chairman of EADS North America, told reporters at a briefing in Arlington, Va.
A spokesman for rival Boeing [BA] said the U.S. company would file its response to the Air Force’s Request for Proposals today. The Pentagon is expected to choose a winner in the contest by Nov. 12.
Boeing has said it plans to compete for the contract with its 767.
Last month, a panel of the World Trade Organization ruled that Airbus had received subsidies to develop its A330 jetliner on which the EADS offering the KC-X tanker contest is based. The WTO panel said the illegal subsidies must be corrected within 90 days, but the appeals process could extend it for months or even years. Boeing and its congressional supporters seized the ruling as evidence that the Pentagon should rethink its acquisition strategy by taking into account the effect the European subsidies have on the price of the A330 (Defense Daily, July 1).
Crosby criticized Boeing and its political backers for “wasting time trying to derail a process because their airplane is inferior.” He said the EADS offering will be affordable not because its development was subsidized but because it is based on a more modern design using more efficient production methods The European Union, meanwhile, has filed a countersuit questioning the legality of various U.S. government grants to Boeing. However, WTO officials announced yesterday that an interim ruling in that case would be delayed from July 16 to sometime in September.
An Airbus executive criticized the delay. Allan McArtor, chairman of Airbus North America, said the decision to postpone a ruling “smells like last week’s fish.
“I’m not saying WTO is at fault,” he added. “The process somehow has gotten off track from where it was supposed to be.”
EADS and its former industry partner Northrop Grumman [NOC] were awarded the KC-X contract by the Air Force in 2008. The award was overturned, however, when government auditors found fault with the service’s evaluation methods.
EADS executives also said that the company’s tanker management team would relocate to Mobile, Ala., next week. The company currently builds the A330 in Toulouse, France, but plans to relocate its assembly shop to Mobile beginning with the fourth of four development aircraft. The first three would be built in Madrid, Spain, according to Crosby.
EADS North America chief executive Sean O’Keefe said low labor costs in Alabama would also contribute to keeping the price of the EADS tanker low. The company plans to build commercial cargo-haulers in Mobile as well, increasing the factory’s efficiency.
At a Pentagon briefing later in the day, Defense Secretary Robert Gates said he is confident the competition will be conducted fairly.
“My view is that the way that it has been designed is as transparent as possible,” Gates said. “So, I think that I am very optimistic that this time we will be able to get on with it.”