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Northrop Backtracks On Job Moves For Air Tanker Contract
Washington (AFP) March 5, 2008 Northrop Grumman Corp. pulled back Wednesday from comments that a US Air Force tanker contract it won with European partner EADS would result in the transfer of 2,000 jobs from Europe to the United States. A statement issued hours earlier Wednesday "was not clear," Northrop spokesman Randy Belote told AFP. In its statement, the Los Angeles-based defense contractor said: "Assembly and militarization of the KC-45A tanker will take place in Mobile, Alabama, resulting in the insourcing of approximately 2,000 jobs from Europe to the United States." Belote, queried about the shifting of jobs across the Atlantic by the partnership, said, "No, we're not." "It's insourcing the capability" but not transferring jobs from Airbus, the aircraft manufacturing unit of the European Aerospace Defence and Space Company (EADS), Northrop's partner in the winning bid. The US Air Force announced Friday its decision to select a team led by Northrop Grumman Corporation and the EADS to provide 179 new KC-45A aerial refueling tankers in a 35-billion-dollar deal. Northrop Grumman issued the company statement in response to criticism in Congress and among labor unions against the awarding of a major military contract that will benefit Europe and cost US jobs. "Since the air force's decision to award Northrop Grumman the KC-45A contract was announced, numerous erroneous comments have been repeated in the media and in Congress," the Los Angeles-based defense contractor said. Boeing had been heavily favored to win the contract, an initial phase in replacing the air force's aging fleet of Boeing tankers. Its arch-rival in commercial aircraft, EADS subsidiary Airbus, based in Toulouse, France, will now assemble the new tankers in Alabama. Northrop Grumman and other US firms will militarize the planes. Northrop Grumman said it had entered the competition for the contract "with the understanding that if its proposal provided the best value to the warfighter and the American taxpayer, it could win the contract." It cited a number of points to make "clear" its position. The tanker program "does not transfer any jobs from the United States to France or any other foreign country," it said, while it will support more than 25,000 jobs in the United States. In addition, the program's US supplier base will include 230 companies in 49 US states.
earlier related report Sparks flew between the companies as a House of Representatives panel peppered a top air force procurement officer with outraged protests over the decision to reject Boeing's bid for the 35-billion-dollar aerial refueling tanker contract. To widespread surprise, the air force announced late Friday it had picked a team led by Northrop Grumman Corporation and the European Aeronautic Defense and Space Company (EADS). The Boeing Company had been heavily favored to win the bidding to provide 179 new KC-45A aerial refueling tankers, an initial phase in replacing the air force's aging fleet of Boeing tankers. With its defeat, Boeing's arch-rival in commercial aircraft, EADS subsidiary Airbus, based in Toulouse, France, will now assemble commercial 330s in Alabama. Separately, Northrop Grumman will convert them into tankers using sensitive military technology that will not be shared. Boeing suggested it may protest the air force decision, which has sparked a backlash among some lawmakers over the spending of tax dollars on a military project that will partly profit a foreign company. "In our view, there's a disconnection between what they talked about during their press conference and the requirements we read in the documents," Jim Albaugh, president and chief executive of Boeing Integrated Defense Systems said in a conference call with analysts. "We expect a debrief on Friday," he added. "We need to have this debrief so that we can understand" the reasons for the decision. Albaugh criticized the potential effectiveness of a Northrop Grumman/EADS tie-up on the military project, describing it as "two companies that'll be working for the first time together, two different cultures, two different notions." He spoke before dueling statements by Northrop Grumman and its European partner. Responding to criticism that the contract will cost US jobs, Northrop Grumman said the contract would result in the transfer of 2,000 jobs from Europe to the United States. "Assembly and militarization of the KC-45A tanker will take place in Mobile, Alabama, resulting in the in-sourcing of approximately 2,000 jobs from Europe to the United States," the Los Angeles-based defense company said in a statement. EADS denied that jobs would be moved to the US. "There is no relocation of jobs," a spokesman for the European group told AFP, adding that jobs will be created in the United States, but not moved from Europe. Northrop Grumman hours later pulled back from its jobs statement. The communique "was not clear," Northrop spokesman Randy Belote told AFP. Belote, queried about the shifting of jobs across the Atlantic by the partnership, said, "No, we're not." "It's insourcing the capability" but not transferring jobs from Airbus, he said. Northrop's statement said the commercial Airbus 330 will be assembled by American workers and sought to make "clear" its position, citing "numerous erroneous comments have been repeated in the media and in Congress." The tanker program "does not transfer any jobs from the United States to France or any other foreign country," it said. The commercial battle took on protectionist hues in Congress as air force procurement chief Sue Payton faced heated questions at a hearing of the House Appropriations Subcommittee on Defense. "This is a crown jewel of American technology we are now giving away to the Europeans," said Norman Dicks, a representative of Washington state, where Boeing's assembly operations are located. Todd Tiahrt, a Kansas Republican, said: "It's outsourcing our national security." "Choosing a French tanker over an American tanker doesn't make sense to the American people," he said. Payton said the Northrop Grumman/EADS team "met and exceeded the requirements" of the bid. "Job creations, location of assembly and manufacturing were not part of this evaluation's criteria, according to the law." Defense Secretary Robert Gates told a news conference that he believed "it was a fair competition." "If there is a desire to change the rules of the game, in terms of how these competitions are carried out, clearly the Congress can do that," he said. Community Email This Article Comment On This Article Related Links The Military Industrial Complex at SpaceWar.com Learn about the Superpowers of the 21st Century at SpaceWar.com
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