Analyst takes shot at Alabama tanker backers

The problems Boeing’s having getting the 787 and 747-8 off the ground have handed its opponents new mud to fling in the war of words over who should build new tankers for the U.S. Air Force.

The editorial board of the Press-Register in Mobile, Ala., for example, took gleeful potshots at Boeing executives recently, after the company announced it would take a billion-dollar charge while pushing back the date for the first flight of the 747-8.

“Now we see that Boeing’s corporate whizzes are a few 747s shy of a full order,” the paper’s editors wrote. 

“In the competition between Boeing and Northrop Grumman Corp., which wants to build its tanker in Mobile, corporate credibility should count for a great deal,” they continued. “Boeing officials’ apparent inability to build airplanes on schedule makes us wonder if they could even be trusted to deliver on a tricycle contract.”

But as an unnamed analyst at Gerson Lehrman Group* points out, Boeing isn’t the only tanker bidder with credibility problems. If it’s about credibility, the analyst writes, “why then does the Alabama press (and Northrop Grumman team) deliberately avoid bringing to the KC-X table the issue of illegal aid for Airbus?”

As you may recall, the World Trade Organization has already ruled that Airbus has received financing from European governments that clearly violates free-trade agreements between the United States and European Union. This financing helped Airbus develop the A330 airliners that Northrop Grumman wants to modify in Mobile, and the International Association of Machinists — District 751’s parent body — wants the Pentagon to make that a factor in deciding which tanker it buys.

In addition, the GLG analyst continues, the Airbus tanker program itself is facing delays, with reports coming from industry sources like FleetBuzz  that the first KC-30s for the Royal Australian Air Force have run into serious technical snags — the most glaring being that Team Toulouse has yet to successfully pass fuel from a KC-30 through its prototype refueling boom. “One would surmise that the USAF eventually hopes to take delivery of a tanker that has a functioning boom,” the analyst quips.

On top of that, Airbus’ other military aircraft program — the A400M transport — is running four years behind schedule with massive cost over-runs, and potential buyers at one point were considering pulling the plug on the plane, although it now appears they’ve worked out a compromise

That’s not to mention all the delays with the A380. Nor does it consider Airbus’ conflicting statements on how many jobs its tanker program would provide in the United States, vs. Europe.

None of that really matters, the analyst wrote. In the end, it should be all about which bidder provides the best value for the military and the taxpayer. (And on that score, he adds, the Airbus-derived tanker, because it would be more costly to operate, may be at a disadvantage.)

“Yes, Boeing has let itself and its customers down,” the writer concluded.  “That alone does not qualify for the endless corporate mudslinging that Northrop Grumman and EADS are tacitly endorsing and encouraging.”

District 751 leaders very solidly support the Boeing bid.

“Airbus and Northrop Grumman are proposing to invent an entirely new kind of trans-Atlantic manufacturing process for their proposed KC-30 jet, using a brand new joint venture to assemble European jets in an American factory that has not been built, with a workforce that has not been hired, let alone trained,” the Union said in a recent statement. “The Boeing alternative – using a proven, experienced workforce in an existing factory, supported by a network of established suppliers – is working for the U.S. Navy with the P-8A Poseidon, and it will work even better for the Air Force with the KC-767.”
 

* Gerson Lehrman Group is a global consulting firm that publishes analyst comments online. Some of them are published anonymously; you have to be a GLG customer to learn who wrote them.

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Comments
One Response to “Analyst takes shot at Alabama tanker backers”
  1. boeing777 says:

    Please note the GLG article was also written by the Editor at FleetBuzz Editorial, Saj Ahmad.

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