Boeing workers stunned by loss

Company could seek appeal

By Les Blumenthal and John Gillie | McClatchy Newspapers and The News Tribune • Published March 01, 2008

WASHINGTON – In a major setback for The Boeing Co., the Air Force on Friday awarded a $30 billion to $40 billion contract to begin replacing its aging fleet of aerial tankers to a European aerospace company and Northrop Grumman.

The decision to use a plane built by Boeing's chief rival in the world's airplane market, Airbus, ignited an instant firestorm on Capitol Hill. The plane will be built in France and assembled in Mobile, Ala.

Chicago-based Boeing, which has built the Air Force's tankers for the past half-century, gave no indication whether it would appeal the award but said it was exploring its options.

Despite a major Pentagon procurement scandal, Boeing had been favored to win the contract, which could be worth an estimated $100 billion as the Air Force replaces its fleet of roughly 530 mostly Eisenhower-era aerial tankers. State lawmakers were furious.

"The federal government has decided to take American tax dollars and build this plane overseas," said Sen. Patty Murray, D-Wash., who visited workers at Boeing's Everett plant just after the announcement. "You can put an American sticker on a plane and call it an American plane, but that doesn't make it an American plane."

Rep. Norm Dicks, a senior member of the House defense appropriations subcommittee, said he was shocked. He predicted the decision would be widely criticized in Congress.

"There will be an uprising on the Hill," said Dicks, D-Belfair. "There are a lot of members who won't accept this."

Dicks, Murray and other members of the state's congressional delegation said they would wait for details of the contract competition to emerge before deciding what to do, but congressional hearings were one possibility. Congress also has to approve money for the tanker project.

Air Force officials said the bid from Northrop Grumman and the European Aeronautic Defense and Space Co. (EADS) outpaced Boeing's bid in most areas. EADS is the parent company of Airbus, Boeing's main rival in the global commercial airplane market.