Coalition of Governors announce support for Boeing in tanker deal

Governors Chris Gregoire of Washington, Jodi Rell from Connecticut, Pat Quinn of Illinois, Mark Parkinson of Kansas, John Baldacci of Maine, Jay Nixon of Missouri, Ted Kulongoski of Oregon and Gary Herbert of Utah came together at the end of last week to announce their support for Boeing’s proposed NewGen tanker replacement for the military’s aging tanker fleet. In their statement, the coalition urged support for Boeing’s proposal over competing bids from Airbus and Antonov citing immediate production capability and 50,000 new US jobs that would be created through the deal. The statement echoes earlier lobbying efforts from the same coalition in February ahead of the company’s proposal.

Boeing submitted the NewGen as their solution to upgrade military’s 50 year old tanker fleet. According to the company, the NewGen Tanker will have a 40 year lifespan and save 15 to 20% in maintenance costs over the Airbus A330. Boeing also cites its US based production facilities as an advantage over Airbus’ largely European based operation. The coalition of Governors supporting Boeing’s proposal are largely from states where Boeing already has facilities or interests.

The NewGen is a derivative product based on the company’s 767 commercial airliner and would replace 179 of the 400 KC-135 aircraft currently in the Air Force fleet. Boeing contends that the tanker also satisfies all 372 mandatory Air Force requirements for multi-mission warfighter support.

As of the deadline, Boeing is competing against Airbus and Antonov of Ukraine. Airbus recently came under fire in a trade dispute brought before the World Trade Organization (WTO). The dispute contested subsidies Airbus received from the European Union. The WTO found that nearly $20 billion in subsidies given to the company to develop its product line constituted prohibited export subsidies under existing trade rules. Boeing is pressuring officials involved with reviewing the tanker deal to take these subsidies into account as a possible unfair advantage when looking at Airbus’ bid. Boeing contested the Airbus bid earlier, saying that they had more experience building tankers. The company has a strong campaign online as well with their US Tanker 2010 site which makes their case and highlights support from cities and states for Boeing’s proposal.

Antonov of Ukraine teamed with U.S. Aerospace Inc. of Santa Fe Springs to submit their long shot bid on the deadline as well. Antonov is a former Soviet aircraft manufacturer and will be working with the Santa Fe Springs company to offer 179 replacement tankers. Under the terms of the Antonov bid, parts will be built in Ukraine and assembled in the United States. Antonov currently makes some of the worlds largest aircraft – the AN-225 Mriya, AN-124 Condor strategic airlifter, AN-148 and AN-158 commercial airliners. U.S. Aerospace Inc. supplies defense contractors with equipment for a variety of defense projects.

The tanker deal represents one of the largest military contracts available with a total cost of just over $29 billion. Officials are expected to make their decision later this fall.

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