Saturday, March 01, 2008

Boeing Loses Bid to Build Next Generation U.S. Air Force Refuelling Tankers: This is a Screwup on Boeing's Part

Boeing has no one to blame but itself for losing a $40 billion U.S. Air Force contract to build a fleet of airborne refueling tankers. The people who were in charge let the Boeing workers down big-time.

Here's why Boeing itself is to blame for this mess:

They had put in a bid to build a fleet of refueling tankers based on the Boeing 767. Their competition was Northrup Grumman, which is an affiliate of the European-based EADS company, which builds the Airbus aircraft. The Europeans proposed a design based on the Airbus A330.

The 767 is smaller than the A330, holds 14,000 gallons less, and has 21% less cargo capacity. Why didn't they field a Boeing 777 or one of the brand-new Boeing 787s against the Airbus?

Bigger is better when it comes to an in-air refueling aircraft.

The other big deal is that production of the Boeing 767 is winding down, in favor of the Boeing 787. If the Pentagon had chosen the 767, it would have driven up maintenance costs, as the Air Force would have had to pay for manufacturing of parts on it's own, rather than have the per-unit price be less if the aircraft and it's replacement parts were still in production, with other companies purchasing the planes and parts too.

I feel bad for all of the American jobs that will be jeopardized by this screw-up. And there's nothing wrong with the 767; it was simply the wrong aircraft to put up against the A330.

The good news is that the Air Force is planning three separate buys of tankers; Boeing lost the first round. They can try again in the second and third rounds.

I hope they get their act together.

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