U.S. tanker deal: Paris wants fair chance for Airbus

Feb. 11, 2010 at 11:30 AM
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PARIS, Feb. 11 (UPI) -- The French defense minister urged Washington to give a consortium of European Aeronautic Defense and Space Co. and Northrop Grumman a fair chance in the bidding for a multibillion-dollar U.S. Air Force contract for refueling tanker planes.

After talks with U.S. Secretary of Defense Robert Gates, French Defense Minister Herve Morin told a joint news conference earlier this week in Paris that standing up for a market economy "can't be a one-way street."

"We hope that on the air tanker program, the American market economy will be fully engaged and the competition launched by the American administration will be a tender that allows EADS and its American partner Northrop Grumman to take part on equal terms," Morin was quoted as saying by Defensenews.com.

Together with Los Angeles-based Northrop Grumman, EADS threw its KC-45 tanker into the bidding war over a contract to outfit the U.S. Air Force with 179 refueling tankers. Based on the Airbus A330, the KC-45 won the contract in February 2008, but it was overturned four months later by the Government Accountability Office after Boeing challenged the decision.

The GAO said it found problems with the bidding, and the contract, estimated to be worth nearly $35 billion, is now up for grabs later this year.

Boeing is bidding with an altered version of its 767, a plane slightly smaller than the KC-45.

Northrop Grumman fears that the new decision will be based mainly on costs and thus favor Boeing. EADS claims its model is more powerful.

Boeing's chances to win the contract have improved, observers say, because a Boeing backer is expected to become the new head of the House Appropriations Defense Subcommittee, which will eventually decide the contract.

Democratic Rep. Norm Dicks, from Washington state where Boeing has a huge presence, is expected to replace Rep. John Murtha, D-Pa., who passed away earlier this week. Dicks has in the past advocated granting Boeing the contract. He could eventually tip the scale in the American company's favor in a battle between Airbus and Boeing that has kept many judges busy.

Last September the World Trade Organization upheld U.S. complaints that the $4 billion in aid the plane maker got from four European governments for the development of the A380 passenger jet constituted illegal subsidies.

The Europeans have also filed a complaint with the WTO, charging that Boeing has been handed multibillion-dollar subsidies by state and federal governments, NASA and the departments of Defense and Commerce. The WTO is expected to issue a ruling sometime in early 2010.

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