Northrop Unveils Team For $40 Billion Air Force Tanker Contract

Wednesday, March 28th 2007, 5:42 pm

By: News On 6

WASHINGTON (AP) _ Northrop Grumman Corp. and its European partner EADS Co. named a team of U.S. subcontractors Wednesday in their bid to win a $40 billion Air Force contract for a midair refueling tanker.

Battling criticism that they're proposing a largely European product, Northrop officials said they had completed agreements with major suppliers including GE Aviation, Honeywell Inc. and General Dynamics. At least 52 percent of the plane would be made in the United States, Northrop said, including final assembly in Mobile, Ala.

The company said its proposal, to be submitted April 12, would generate some 25,000 new U.S. jobs. That's far below the 44,000 that its chief rival, Chicago-based Boeing Co., has said it would create.

But Northrop officials insisted they're offering an American-made plane that would outperform the competition.

``If it's built in Alabama, it's built in America,'' Northrop President and COO Wes Bush said at an afternoon news conference in Washington.

Northrop and Boeing are the only two companies vying for the contract to replace 179 of the military's Eisenhower-era KC-135 refueling planes. The $40 billion job is the first installment of an expected three-phase deal to replace more than 500 planes that could be worth an estimated $100 billion.

Northrop is proposing the KC-30 aircraft, a modified version of the European-made Airbus A330. Airbus' parent, European Aeronautic Defense and Space Co., is Boeing's arch rival.

The plane's frame would be manufactured in Europe, and critics in Congress and elsewhere have argued that the military should use an American plane.

EADS and Northrop have countered that their plane is bigger and better, with more fuel capacity, for example, and larger cargo space.

Boeing announced last month that it would offer a version of its KC-767, slightly modifying its long-range 767 freighter. Boeing, which would use some of the same subcontractors, said it would primarily build the tanker in Everett, Wash., with additional work in Wichita, Kan.

Bill Barksdale, a Boeing spokesman, said 85 percent of its plane would be made in the United States and that its team, which built the initial tanker, has been ``together for years, not hours.''

But, he said, ``Our competitor has put together a solid team that we do not underestimate.''

Boeing's 767 is, on paper at least, more affordable than Northrop's aircraft, with a listed retail price of roughly $130 million. But industry insiders expect Northrop Grumman and EADS to heavily discount the KC-30; the current retail listing of the A330 is roughly $160 million.

The Air Force expects to make a decision by the end of the year.