Pentagon: WTO Decision against Airbus Should Not Be a Factor in Tanker CompetitionDecember 04, 2009
 The refueling aerial tanker saga continues as the Pentagon's chief weapons buyer said he opposed factoring a recent World Trade Organization (WTO) ruling against Airbus into the U.S. Air Force tanker replacement competition. Ashton Carter, the undersecretary of defense acquisition, tried to diffuse the pressure from Boeing and its supporters and lobbyists who want the preliminary WTO ruling — that Airbus received illegal government subsidies in Europe — to be considered when awarding the tanker contract. Airbus, part of the European Aeronautic Defense and Space Co, will partner with Northrop Grumman to help build a new fleet of tankers. The Northrup Grumman team plans to assemble its tankers — based on the A330 design — in Mobile, Alabama. Boeing and Northrop Grumman-Airbus alliance have been competing fiercely for a contract to build a new fleet of in-air refueling tankers that would replace the refueling tankers now in use for more than 50 years. Two rounds of competition have stalled amid corporate scandal and lawsuits. The deal is worth at least $35 billion, with subsequent procurement phases making the deal worth a whopping $100 billion. Boeing and its allies noted that the subsidies amount to giving Airbus an unfair advantage since they can offer lower prices. According to regional news site Alabama Live, U.S. Rep Norm Dicks, D-Wash., has suggested that the Pentagon add $5 million penalty to the price of each Airbus-Northrup Grumman tanker to balance out the competition. The tankers would be built in Washington state if Boeing were to win the contract. Carter, however, said that the WTO interim ruling is just that, interim and can be appealed with a final finding that is different. The WTO is now also reviewing a counter-suit, according to the article, which was filed in the U.S. by the European Union. The counter-suit claims that Boeing received illegal tax breaks and other financial support. A preliminary ruling is expected early next year. But Pentagon officials acknowledge that it maybe take several years to resolve the suit and counter-suit. Carter also noted that the Pentagon "may or may not" meet its original target of putting out the final tanker bidding rules by the end of November. The Department of Defense has been taking feedback on its guidelines for the contract from contractors. "We've had obviously criticism from both parties," Carter said Monday of the draft bidding rules. "I suppose that was destined to be." (U.S. Air Force photo/Tech. Sgt. Phyllis Hanson (RELEASED)) |
|
