US reopens EADS $35bn tanker deal
Pan-European manufacturer EADS yesterday said it intends to rebid for the $35bn (£17bn) contract it thought it had won to supply the US Air Force with refuelling tankers after the American government reopened the process.
US defence secretary Robert Gates has said the contest for 179 new aerial refuelling tankers would begin again after the selection process that picked Northrop Grumman and EADS over Boeing in February made mistakes in evaluating the rival bids.
The initial evaluation had suggested that the Northrop Grumman bid would probably work out cheaper over the life of the deal. But when re-examined, Boeing looked to be the cheapest, the US Government Accountability Office said.
Gates said a decision will be made by December. Boeing and Northrop Grumman and EADS, which owns Airbus, will rebid for the contract.
EADS head Louis Gallois said: “We welcome the announcement by the secretary of defence and are prepared to fully support our partner Northrop Grumman in rapidly addressing our customer’s requirements.”
He added: “We are ready and anxious to get back to work and begin delivering the world’s most capable tankers to our partner and the U.S. Air Force.”
Boeing had been expected to win the contest in February with its tanker based on the 767 airliner, but the Air Force opted for the larger Northrop design based on the A330 airliner built by EADS.
Boeing also welcomed the decision to reopen the bidding. Observers said it could prove difficult for EADS to win the contract and some fear it could lead to job losses. An Airbus plant in Flintshire, north east Wales , which employs 7,400 people, was expected to build the wings and the deal had been expected to safeguard these jobs.
EADS shares ended the day down 0.7 per cent at 12.01 euros, after falling as much as 4 per cent at one point.
