Did the Russians drop out?

Executives at United Aircraft Corp. of Russia denied Monday that they planned to form a joint venture with a U.S. defense contractor to bid on a contract to supply a fleet of aerial refueling tankers to the U.S. Air Force.

On Friday, John Kirkland, a Los Angeles lawyer who said he represented an unidentified U.S. defense company that was in talks with UAC to form such a venture, told The Wall Street Journal that the Russian aerospace consortium would publicly announce the deal's signing by Monday morning.

On Monday, responding to reports about the expected deal, UAC President Alexey Fedorov said in a statement on the government-owned company's Web site that UAC "is not planning to take part in the tanker tender or set up a joint venture."

Mr. Kirkland's law firm, Luce, Forward, Hamilton & Scripps LLP, said in a statement Monday that the lawyer was "engaged" a few months ago to work on a joint venture between UAC and the U.S. company. It said Mr. Kirkland had numerous conversations with UAC officials and received documentation that "stated the joint venture was approved, and that an agreement would be executed shortly."

Neither Mr. Kirkland nor his firm would identify the client company.

Mr. Kirkland provided the Journal with letters he said he sent to Mr. Fedorov and other executives at UAC on two occasions in February about forming a joint venture to pursue a bid for the tanker job.

In a copy of a letter dated Feb. 8 from Mr. Kirkland to Mr. Fedorov, the name of the client company was redacted, but Mr. Kirkland identified it as a publicly traded U.S. aerospace defense company.

Mr. Kirkland didn't provide the Journal with any letters that purported to be from UAC to himself or his client. In support of his claims about negotiating the venture, he provided a letter that appeared to be on UAC letterhead, addressed to a third-party company that Mr. Kirkland said was also going to participate in the joint venture.

Mr. Fedorov and other officials from UAC couldn't be reached for comment.

Mr. Kirkland also showed the Journal a letter dated Sunday that he said he sent to UAC seeking clarification about the status of the venture. He told the Journal he didn't receive a response.

In the letter, Mr. Kirkland named several UAC officials with whom he said he had spoken as recently as Saturday.

"They all confirmed again that the agreement would be signed this Monday morning," Mr. Kirkland wrote in the letter to UAC, which he says he emailed to officials including Mr. Fedorov and Chairman Sergey Ivanov.

Mr. Fedorov's statement appeared on the UAC Web site hours after Mr. Kirkland says he sent his email.

The episode is the latest twist in the Air Force's long-running attempt to replace its aging fleet of flying gas stations, which date back to the Eisenhower era. The service has been trying since 2002 to settle on a replacement strategy for the planes. On March 8, Northrop Grumman Corp. said it wouldn't bid on the contract to supply 79 new tankers, which could be worth up to $40 billion

Last week, European Aeronautic Defence & Space Co., Northrop's erstwhile partner on the tanker bid, said it was considering submitting a bid of its own to compete against rival Boeing Co.'s offer, provided the Pentagon would extend the bidding deadline for 90 days. As of now, bids are due May 10.

http://online.wsj.com/article/SB10001424052748704841304575138011574666660.html&n...;

Editorial:


By Press-Register Editorial Board
May 28, 2010, 5:49AM


EITHER BOEING is getting desperate or we missed the European Union’s declaration of war on the United States.

Those are the only two possible conclusions we can draw from Boeing Corp.’s latest pitiful attempt to manipulate the Air Force tanker contest. Boeing is now claiming that EADS would put U.S. national security at risk if the Airbus parent’s North American affiliate wins the refueling tanker contract worth potentially $40 billion.

EADS, of course, stands for European Aeronautic Defence and Space Co. It is, as the name implies, based in Europe. Its ownership includes the governments of France, Spain, Great Britain and Germany.

The United States is not at war with any of these countries, let alone the European Union. Indeed, they are considered allies.

Yet Boeing tried to claim this week that if "foreign governments" disagreed with U.S. policy, they might withhold tankers and spare parts.

Using that illogic, the only safe place for U.S. defense airplane work is American-based Boeing Co. Every other country is a national security threat, and so is every foreign-based business, no matter how many jobs those businesses create for Americans.

Speaking of Americans, it seems necessary to remind Boeing that Mobile, Alabama, where the Airbus tanker would be assembled, is a member in good standing of the United States. There’s been no question about that since the Civil War.

It’s true that Chicago, where Boeing is headquartered, and Everett, Wash., where it does most of its airplane manufacturing, are both a long way from Mobile. But there are maps.

Boeing is willing to slur its opponent and obfuscate the facts in order to divert attention from whether it can build a better tanker than EADS/Airbus. But the national security argument is pretty weak, even for Boeing.

As for its ridiculous allegation that EADS does business with Iran, that appears to refer to an EADS trip to an air show in Iran five years ago. The U.S. Department of Defense, which is sensitive about this sort of thing, says EADS North America is in good standing.

There’s only one possible conclusion: Boeing is getting desperate.

http://blog.al.com/press-register-commentary/2010/05/post_164.html

Jul 9, 2010




By Amy Butler

EADS North America is confident its Airbus A330-200-based KC-X proposal will win the long-running U.S. Air Force competition, but Ralph Crosby, chairman of the company’s board, says some statements about the highly charged duel from supporters of its competitor, Boeing, amount to a “bunch of crap.”

The company is submitting an 8,819-page, 17-volume proposal to replace 179 KC-135 tankers; bids are due July 9. EADS’s design is based largely on the configuration in development for the Royal Australian Air Force. Boeing is proposing a 767-based option, but it is deviating from the design made for Japan and Italy, and no known prototype exists.

The Air Force is expected to announce a winner of the procurement, worth about $35 billion, on Nov. 12. Crosby and other EADS executives announced their proposal submission during a July 8 roundtable with reporters.

Leading up to the proposal submissions, both companies have been locked in a public volley of discourse. Boeing supporters argue that a World Trade Organization (WTO) finding that Airbus received illegal subsidies to develop its commercial aircraft should be taken into consideration in the source selection. Rep. Todd Tiahrt (R-Kan.) is among a group of lawmakers proposing legislation that would call for the Pentagon to penalize the EADS offering because of the subsidies. He says that a $5 million per airplane penalty should be added to the EADS proposal price.

Pentagon officials say WTO rules prevent them from inflicting penalties, and any suggestion to the contrary is “patently inaccurate,” according to Allan McArtor, chairman of Airbus Americas. “I’d like to think of another word for B.S.” He adds that the $5 billion figure cited by Tiahrt and other lawmakers for launch aid is a “mythical number.”

The WTO announced its dispute resolution panel will delay until September issuing its findings on the case of the European Union against the United States that alleges Boeing received unfair subsidies from Washington. McArtor said the delay decision “stinks like last week’s fish,” and questioned whether the U.S. Trade Representative pressured the WTO for the shift to allow Boeing’s debut of the 787 at this month’s Farnborough Air Show to occur unfettered by news of the case.

EADS is opening up a new KC-X program management operation in Mobile, Ala., on Monday, July 12, to handle discussions with the Air Force following proposal submission, says Sean O’Keefe, chief executive officer for EADS North America. “We intend to proceed starting now as if we are going to win,” he says. Mobile was selected as the stateside site for A330-200 tanker and freighter final assembly when the company won the last KC-X competition in 2008, that time under the leadership of then prime contractor Northrop Grumman. That win was nullified after a Boeing protest turned up procurement missteps by the U.S. Air Force, and Northrop Grumman walked away as prime for the bid this spring. EADS announced in April it would proceed with its own prime contractor proposal.

O’Keefe says the first three of four development aircraft for the KC-X program would be built in Toulouse, France, with military modifications done in Spain at an Airbus Military facility. The fourth development aircraft would roll off the A330 line in Toulouse but be modified with mission systems in Mobile. Company officials declined to say when the first aircraft fully assembled and modified in America would be delivered from the Mobile line.

Crosby says that the establishment of the facility in Mobile would be an “economic magnet” for local economies struggling after the effects of the BP Gulf of Mexico oil spill wiped out tourism dollars for the summer season.

This, however, is not a factor in the Air Force’s source selection process. Each bidder must meet 372 mandatory requirements to qualify, and the winner will be chosen largely on low price. Price will be a tough point for the team because the Airbus model is bigger and heavier than its Boeing rival. “I feel good about the intersection of value and price,” Crosby says.

California-based U.S. Aerospace has filed papers with the U.S. Securities and Exchange Commission that indicate it will lead as prime contractor bids offering three Antonov models for the competition. This, however, is being viewed by KC-X competitors with skepticism (Aerospace DAILY, July 6).

The Pentagon says it is sticking to its 2 p.m. July 9 deadline for competitors to submit their KC-X proposals, despite the potential U.S. Aerospace bid. “The Department has received a request for information from U.S. Aerospace concerning the Air Force KC-X tanker replacement program RFP,” Pentagon spokeswoman Cheryl Irwin says. “We have consistently supported competition for the tanker program. The Department is committed to conducting a fair, open and transparent acquisition process. We also believe that any company that is interested and qualified to participate in this important program should do so.”

Boeing plans to turn in its offer July 9.

Credit: EADS North America

http://www.aviationweek.com/aw/generic/story.jsp?id=news/asd/2010/07/09/01.xml&h...

Oct 6, 2010
By Guy Norris

LOS ANGELES — Aerospace workers as well as city and state officials rallied Oct. 5 in Southern California as part of nationwide moves by EADS North America aimed at showcasing the proposed KC-45 tanker for the U.S. Air Force contest — and the jobs they say it will support across the country.

The rally, one of several orchestrated in a parallel operation countering a similar series of meetings held by competitor Boeing, was hosted in Irvine by Parker Aerospace. Parker would be a major supplier on both the KC-45 and Boeing’s proposed KC-767 program.

Parker was part of the original team with EADS and Northrop Grumman on the previous Airbus A330-200 multi-role tanker transport proposal, and under the succeeding KC-45 bid is set to provide flight controls; hydraulic, fuel and engine components and systems; and aerial refueling equipment.

Parker, which expected to have several hundred employees at the rally, says the KC-45 would support more than 1,900 workers at three facilities in California, plus 975 at first-tier suppliers throughout the state. The EADS tanker work also would support around 2,700 jobs tied to other Parker Aerospace products at suppliers and production sites in Florida, Georgia, Michigan, Ohio, Texas and Utah, it adds. The total economic impact is estimated at more than $500 million, of which $328 million would be associated with Parker’s KC-45-related spending in California alone.

The rally comes amid continuing claims and counterclaims by the competing teams at tanker events. Boeing Commercial Airplanes President and CEO Jim Albaugh told a rally in Everett, Wash., last week that its KC-767 would be able to operate from twice as many airfields as the KC-45. Washington Rep. Norm Dicks (D), a powerful appropriator, noted fuel savings over the A330 derivative would total $25-30 billion over 40 years.

EADS, releasing details of internal studies through aerospace analysts Leeham and Co., says that based on requirements and criteria in the USAF request for proposals, the KC-45 would actually use 3% less fuel per gallon delivered on refueling missions than the KC-767 on 500-nm. trips, and 31% less on 2,500-nm. missions. Using USAF criteria, EADS says on a 2,500-nm. mission with 250 sorties, the KC-45 would save $25.8 million in one day alone, based on assumed Defense Department fuel-per-gallon pricing.

http://www.aviationweek.com/aw/generic/story.jsp?id=news/asd/2010/10/06/05.xml&h...

Washington Rep. Norm Dicks (D), a powerful appropriator, noted fuel savings over the A330 derivative would total $25-30 billion over 40 years.

EADS, releasing details of internal studies through aerospace analysts Leeham and Co., says that based on requirements and criteria in the USAF request for proposals, the KC-45 would actually use 3% less fuel per gallon delivered on refueling missions than the KC-767 on 500-nm. trips, and 31% less on 2,500-nm. missions.

Using USAF criteria

, EADS says on a 2,500-nm. mission with 250 sorties, the KC-45 would save $25.8 million in one day alone, based on assumed Defense Department fuel-per-gallon pricing.

Senate panel to look into tanker data mixup
By Jim Wolf

WASHINGTON | Thu Dec 23, 2010 2:40am EST

WASHINGTON (Reuters) - The Senate Armed Services Committee will hold hearings next month into an Air Force document bungle roiling a transAtlantic rematch for a potential $50 billion aerial-refueling plane contract.

Senate Armed Services Chairman Carl Levin said Wednesday he was prepared to launch an investigation into "the release of proprietary data" from rival tanker bidders Boeing Co and Europe's EADS.

At issue is what the Air Force calls "a clerical error" that sent Boeing and EADS computerized records in November with sensitive data on each other's bid for the contract.

"I also intend to hold one or more hearings by February 1 to consider these issues and to review the propriety of the procurement process of the KC-X tanker competition as it relates to this issue," said Levin, a Michigan Democrat.

KC-X is the codename for the Air Force's plan to buy 179 tankers to start replacing its 50-year-old Boeing KC-135 refueling fleet, a deal worth up to $50 billion.

The current contest marks the Air Force's third try to buy new tankers, which are used to refuel fighters and other planes in mid-air. The mixup could lead to a fourth round, for instance if it spurred a successful protest by the loser.

Levin was responding to a push for hearings from Senator Maria Cantwell, a Democrat from Washington state, where Boeing would manufacture tankers based on its 767 wide-bodied jetliner if it won the deal.

Chicago-based Boeing welcomed the planned spotlight on the issue.

"We're prepared to answer any questions from the Senate Armed Services Committee, in hearings or otherwise, that may result from the commitment Senator Cantwell received from Senator Levin to examine the recent release of our proprietary information to EADS/Airbus," said Dan Beck, a Boeing spokesman.

EADS, Airbus's corporate parent, was deferring comment to the Air Force, said James Darcy, a spokesman for EADS' North American arm.

The Air Force had no immediate comment.

Beck in an email said Boeing remained concerned about "the implications of the release of our proprietary information and we feel some unresolved questions remain."

"Until we're satisfied we have a complete picture, we're keeping our options open for how we go forward," he said.

The Air Force disclosed on November 19 that it had inadvertently provided the bidders "a limited amount" of each other's confidential information. It said at the same time it was delaying the awarding of a contract until early next year, from this fall, because evaluating the competition was taking longer than had been expected.

A tanker contract would give EADS, headquartered in Paris and Munich, an important beachhead in the United States, the world's most lucrative arms market.

http://www.reuters.com/article/idUSTRE6BM0RG20101223