Quoting BusinessWeek, because you still can't put links in the first article of a thread:
Northrop Grumman and Airbus' parent teamed up to beat out the odds-on favorite for a $40 billion contract to supply refueling tankers to the U.S. Air Force
The Air Force tanker award is considered the largest defense contract since the Joint Strike Fighter (JSF) program of a decade ago. That competition between Boeing and Lockheed Martin (LMT) was ultimately nabbed by Lockheed. The tanker deal comes at a critical time as the Bush Administration defense buildup tapers off over the next several years. The Air Force contract calls for the supply of 179 new refueling tankers to be delivered at a rate of about 15 a year. With the lives of tankers stretching to half a century, maintenance and upgrades could make the value of the contract as much as $100 billion, says Paul Nesbit, a defense industry analyst with JSA Research. "Everyone told us we were crazy, that we had no chance," Northrop CEO Ron Sugar said in an interview. "But we took a big swing and in this case, we hit a home run."
Air Force officials said Friday that the alliance of Northrop and EADS, the parent of Boeing archrival Airbus, won high marks for its capability, past performance, and competitive price. Sue Payton, the Air Force assistant secretary in charge of acquisition, made it clear that the possibility of creating U.S. jobs wasn't a factor. "The key decision was the amount of fuel the bigger plane could carry," UBS (UBS) analyst David Strauss said in an interview. "In the armed services, you can never have too much gas in the air." |