Wednesday, April 21, 2010

EADS Reenters KC-X Competition

EADS (Airbus) has reentered the USAF's KC-X competition. Northrup-Grumman announced its withdrawl from the competition back in February. N-G had been partnered with EADS to offer the KC-30, a militarized tanker version of the A330 airliner. N-G backed out, seeing that the refined requirements set out in the competition gave Boeing's KC-767 a big advantage in the competition. Basically, N-G decided to stop throwing good money after bad, and handed the contract to Boeing.

Well, Airbus has decided to attempt to push the KC-30 by itself, without N-G as a partner. I rate their chance as slightly better than Obama shrinking the Federal government.

N-G's bid included some powerful incentives - assembly of the KC-30 would have been in Alabama, benefiting a large number of US companies and creating a large US workforce to produce the 179 aircraft the contract covers. EADS' bidding on its own would seem to not have that advantage - the aircraft will undoubtedly be built in Airbus' European factories.

Airbus has a very poor record of delivering new design aircraft on time. Their long going A-400M project to build a medium capacity airlifter is so far behind schedule, so far above projected costs, that many of the partner countries have backed out of the project and chosen to buy C-17s and new model C-130s instead.

The KC-X contract is worth at least $35,000,000,000. I understand why EADS would want to try to get it, but I don't understand why they are getting back in when the deck is stacked so far against them. I see this as a waste of money for EADS, and a big embarrassment when their aircraft loses to Boeing again.

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