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EADS Fires Across Boeing's Bow

Demonstrably proud of their bid on the KC-X tanker, EADS NA officials turned it in one day early and the company's chairman slammed Boeing for "wasting a lot of time trying to derail" the competition "because someone thinks their plane is inferior." Boeing's attacks amounted, said company chairman Ralph Crosby, to a lot of "crap."

EADS flew five paper (and one CD) copies of its 8.800-page bid to Wright-Patterson Air Force Base on a chartered prop plane, expecting them to arrive at 2:40 p.m. The company filmed the copies being loaded aboard and the takeoff for employees to watch later. One copy traveled by land just in case.

Crosby opened this afternoon's press conference with a none-too subtle dig at Boeing. As a video played of the Australian tanker built by parent EADS executing a refueling, Crosby said: "I'm transfixed by the video. I love watching real tankers doing real tanking."

Crosby offered a staunch defense of the company's bid, which many observers feel faces an uphill struggle given that the Air Force's RFP basically calls for a replacement of KC-135s, a much smaller plane than the modified Airbus 330 which EADS will offer. "I feel good about the intersection of value and price," in the KC-X bid, Crosby told reporters. He dismissed the idea that EADS may not have a good shot, saying they bid "for one single reason -- to win."

Crosby cast the competition as the last great defense procurement of the twenty-first century, placing the value of the first tranche of 179 planes at roughly $40 billion, and estimating the total value of the tanker program over time at some $120 billion.

The governor of Alabama will open the EADS facility in Mobile on Monday, and company officials went to some lengths to praise the state's business climate. CEO Sean O'Keefe said building the planes in Mobile would help lower costs. The company touted the jobs impact of the program, which will employ an estimated 48,000 Americans and help sustain a supplier base of more than 200 U.S. companies.

Crosby noted that, should EADS win the tanker deal, it will also build A330 freighter aircraft in Mobile

Once the bids are in, the Air Force and the Defense Contract Management Agency will send people to Mobile and to Europe (where the first set of planes will largely be built) for a pre-award review. The government folk will tour facilities and interview some of the 200 core members of the EADS tanker team to assess the company's ability to design and produce the aircraft in line with its bid.

On top of their usual rejection of claims that the World Trade Organization has ruled that the A330 received illegal trade subsidies during development, one EADS official went so far as to accuse the WTO of shenanigans for deciding to postpone release until September of its preliminary ruling on a European Union complaint that the U.S. provided illegal public subsidies to Boeing. The European Union's commission said today that the delay between the WTO ruling on Airbus and the one on Boeing "creates the wrong impression that Airbus has received some WTO-incompatible support, whereas Boeing has not."

Allan McArtor, chairman of Airbue Americas, told reporters the decision to delay was "unprecedented." Coming just 10 days before the opening of the Farnborough Air Show and when the KC-X bid was due, he hinted darkly that something was afoot, saying it "smells like a fish."

Boeing will hold a celebration of its tanker bid tomorrow morning in Everett, Wash. with Sen. Patty Murray, Reps. Norm Dicks, Rick Larsen, Jim McDermott, Jay Inslee and a host of Boeing workers attending.

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