Thursday, August 7, 2008

DoD Tanker program: recourse to the Inevitable

The re-opening of the bidding for the Air tanker contract for the United States Air Force serves several interests at this particular time;

Firstly, and not unimportantly the process pushes responsibility for a final decision concerning the award of the program to the next Administration, be it Democrat or Republican. DoD will not embarass, or create any election issues for candidates to fight over.

Secondly, the inevitable lobbying by Boeing to preserve US jobs (plus a cheaper product given de facto devaluation of the dollar) makes a split Boeing: Northrop Grumman/EADS ever more likely. This represents a success for Boeing given the poor commercial judgement in early stages of the project which resulted in them breaking the "11th commandment - thou shalt not be caught"...

Thirdly, the split award will reinforce the fact that overseas suppliers can win major programs - EADS/Aribus sharing the spoils of the program will still be significant in value and will put EADS/Airbus plant into North America.

Everyone is a winner.

Any bets as to the next generation passenger airliner being a Boeing:Airbus collaboration on North American soil ?

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