Boeing and Northrop/Airbus compete for $40B Air Force tanker order

Posted Apr 2nd 2007 2:26PM by Tom Barlow
Filed under: Competitive Strategy, Boeing Co (BA)

In yet another bout in the Boeing Co.(NYSE: BA)-Airbus slugfest, both are involved in bids to supply the U.S. Air Force with 12-18 refueling tanker planes annually. The contract value is estimated at $40 billion.

Airbus (EADS) is partnering with Northrop Grumman Corp. (NYSE: NOC) to offer the Northrop-Grumman KC-30, a version of EADS' A330. To counter the protests already being voiced by American workers about defense jobs being lost overseas, EADS would assemble the planes at Northrop's facility in Mobile, Alabama. EADS estimates 52% of the work would be done on U.S. soil, providing 25,000 jobs.

Boeing's proposal will offer the tanker version of its 767, the KC-767, which it claims will be 85% American-made and provide up to 44,000 jobs. The plane is already being used by the Italian Air Force and Japanese Air Self-defense Force.

The Air Force is expected to announce the winner of this competition by the end of the year.

Tags: Air Force tanker order, AirForceTankerOrder, BA, KC-30, KC-767, noc, northrop, northrop grumman, NorthropGrumman