European Firm Grabs US Defense Contract
It will be interesting to watch the political reaction/fall-out to today's news that EADS, the European defense company better known in the States for its Airbus aircraft, is getting part of a $35 billion contract with the US Air Force to build refuelling tankers. Moreover, although final assembly is in Mobile, AL, most of the plane will be built in Europe.
The US partner in the deal, possibly worth as much as $100 billion over a 30-year period of fleet replacement, is Los Angeles-based Northrop Grumman.
Losing this deal is a double blow for Chicago-based Boeing, which had contract for leasing refueling planes cancelled in 2004 due to a scandal in Pentagon procurement. Boeing had been supplying the refueling tankers for 50 years.
In late 2003, Boeing fired Mike Sears, chief financial officer, and Darleen Druyun, vice president of missile-defense systems, "after concluding Sears improperly offered Druyun a job in the fall of 2002 when Druyun was a top acquisitions official for the Air Force." In 2005, Druyan began serving a nine month prison term for violating conflict of interest laws.
The scandal also led to the ouster of Boeing CEO Phil Condit and Air Force Secretary Jim Roche.
More from The Financial Times and AP.
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