Close The Door On The Way Out, Northrop!
As has been expected, Northrop Grumman has decided withdraw from the KC-X tanker competition a little over a week after the RFP was made available.
By withdrawing from the competition, Northrop Grumman has forfeited its right to protest the decision making process - failure to participate gives it no legal standing to quip about the US Air Force’s RFP, much less get the RFP changed to ensure a level playing field, after feeling aggrieved that the A330 would not be rewarded for offering “more”.
Image courtesy of UnitedStatesTanker.com
While the USAF had decided to omit any direct links between the impending WTO ruling and A330, Northrop Grumman is acutely aware that the WTO presence undermined the A330’s presence in the competition.
The undisputable fact remains that the A330 was built using direct state aid whereas the 767 was not.
With Airbus still saddled with financial woes on the calamitous A400M and A380 programs, EADS has no choice but to fall into compliance with the WTO’s rulings and this would adversely affect its ability to price the A330 tanker competitively against the 767 to the USAF.
To that end, the untested partnership of Northrop Grumman/EADS also spells the virtual death of Airbus’ plans to shift A330 freighter production to the United States using taxpayer money.
If EADS submits a bid on its own, the whole proposition would take on a riskier turn for the US Air Force. The A330 tanker for the Royal Australian Air Force is late, vastly over budget and fuel offload rates through the boom have not shown the sort of consistency Airbus had hoped for. In contrast, the USAF would be hard pressed to ignore 767 tankers already in service with Japan’s ASDF, not to mention that EADS has no facility in the USA to produce and modify A330’s in the first place.
With Boeing the only participant in the competition, they’re able to go full steam ahead and perhaps finally deliver a tanker that the Air Force has sought so desperately for decades.
Although in light of Northrop Grumman’s posturing, whining and playing to the press in Alabama, you have to wonder why the Department of Defense didn’t sole-source the deal in the first place. Reverberations from the old lease deal were never pertinent to this RFP, just as it wasn’t in the last one.
For EADS, its American dream has turned into a major nightmare.
46 comments March 8th, 2010
