At Boeing, shock — and then anger: Outcry over huge contract loss takes on a tone of nationalism
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In a stunning upset for The Boeing Co., the Air Force reportedly has chosen a team of Northrop Grumman Corp. and Airbus parent EADS to supply air-refueling tankers in a closely watched, much debated and hard-fought competition.
By STEWART M. POWELL, ERIC ROSENBERG, CRAIG HARRIS AND JAMES WALLACE
P-I WASHINGTON BUREAU/P-I REPORTERS
The Air Force on Friday delivered a shock to storied American airplane builder The Boeing Co. by choosing a team of Northrop Grumman Corp. and Airbus parent EADS to build a new fleet of air-to-air refueling tankers — a contract potentially worth $100 billion.
Air Force Secretary Michael Wynne’s surprise announcement at the Pentagon set the stage for the next phase of a high-stakes struggle and coming debate likely to be framed in terms of economic nationalism.
Sue Payton, the Air Force official responsible for acquisition, acknowledged that Boeing could file a formal protest over the initial $35 billion contract decision, provoking a protracted investigation that might delay production of the first 179 tankers.
Congress also may take a look at the deal, which is expected to have the first new air-to-air tanker operational by 2013.
In a statement after the Air Force announcement at the Pentagon, Boeing spokesman William Barksdale said: “Obviously we are very disappointed with this outcome. Once we have reviewed the details behind the award, we will make a decision concerning our possible options, keeping in mind at all times the impact to the warfighter and our nation.”
Barksdale gave no indication whether Boeing would file a formal protest.
Air Force Gen. Arthur Lichte, commander of the Air Mobility Command that flies the tanker fleet, sought to rebut anticipated criticism that the Air Force has chosen a French-based aircraft maker over a major American company.
Referring to the EADS-Northrop model, Lichte told reporters at the Pentagon briefing: “This is an American tanker. It’s flown by American airmen. It has a big American flag on the tail, and every day, it’ll be out there saving American lives.”
THE DEAL
The Air Force awards a $35 billion contract for aerial refueling tankers to a team of Northrop Grumman and EADS.
THE REACTION
Boeing workers and Washington politicians express dismay and outrage at the decision. Boeing shares drop after-hours, Northrop’s rise.
WHAT’S NEXT
The Air Force will debrief Boeing later this month. Boeing then could appeal the decision, and the GAO has 100 days to examine it, said Sen. Patty Murray.
IN EVERETT: Machinists Lodge 751 breaks out in boos upon hearing the news.
HISTORY: Once cozy, Air Force, Boeing ties now strained.
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