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Tanker Bid Debate Roils Boeing

Although Boeing has said publicly it will bid on the tanker -- which it seemed virtually certain to win without competing last month -- there is clearly debate within the company about whether it should follow the lead of Northrop Grumman and just pull out.

Loren Thompson, defense analyst and consultant, said Boeing's top defense executive Dennis Muilenburg discussed pulling the plug last week. Muilenberg, in what sounds like a classic case of mirror imaging, apparently thinks "the Air Force is making changes to the solicitation terms that seem to help EADS," Thompson wrote in his blog.

While Thompson thinks Boeing will bid -- after all, many analysts say it's got EADS beat on price -- he does offer a solid rationale for the company to pull out. "Oddly enough, investors aren't impressed by multi-billion-dollar contracts that look like they might tie up capital without producing profits," he writes

Reuters' colleague Andrea Shala-Esa reported that Boeing spokesman Dan Beck told her "the company regretted that its concerns about subsidies to EADS, the parent of Airbus, would not be reflected in the Pentagon's evaluation of competing bids."

I spoke with source familiar with the tanker program about whether Boeing was blufing and trying to boost the chances of its WTO punishment legislation passing Congress and this is what he said: "It seems very unlikely that Boeing would seriously mean to withdraw. Not to criticize our colleagues from Defense News, but they tend (and not only them) to go out for any possible scoop. Unless you confirm Boieng really meant it. Then they would be losing their temper, not gambling. Did you ever see a poker player [just] leave the table?"

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