The Pentagon has announced it has picked Boeing Co. to begin building a fleet of 179 new aerial refueling tankers. The $3.5-billion contract to build 18 of the Air Force tankers is the first phase of a $35-billion project that will keep an estimated 50,000 aerospace employees busy for years to come.
Boeing was chosen over European archrival Airbus and its parent company European Aeronautic Defense & Space Co. (EADS) after a heated 10-year dispute that saw the lucrative contract awarded and challenged twice. The tanker deal became a political football that was debated in Congress, with Boeing’s backers claiming that it heavily subsidized European competitor would assign the tanker work to its overseas employees. EADS would have based the tanker on its A330 jets, which are built in Europe.
EADS enlisted the support of governors in Alabama, Mississippi and Louisiana who were told the project work would be based in Mobile, AL with thousands of jobs going to tier 1 and tier 2 suppliers in the surrounding region. One estimate concluded that the tanker project would generate an economic impact of $600-million for Mobile.
“Boeing was the clear winner,” said William J. Lynn, deputy secretary of Defense, in making the announcement. “We went through a process that evaluated war-fighting requirements, evaluated price, evaluated life-cycle costs. And the process yielded the result it did with Boeing winning.”
Much of Boeing’s assembly work for the tanker will be done in the company’s plants near Seattle, WA and Wichita, Kan. The deal also will keep Boeing’s suppliers in Southern California busy churning out parts for the fleet that will replace the Air Force’s aging aerial tankers, which were built in the 1950s.
The winning bid was based on a modified Boeing 767 passenger jet. Boeing has said the first phase of the project will create about 4,500 jobs in California, including at Raytheon in El Segundo, Alarin Aircraft Hinge Inc. in the City of Commerce and Lamsco West Inc. in Santa Clarita.
Ron Scott, executive director of the Economic Development Association of Alabama, told the local media that he hasn’t been as disappointed by a project decision since Volkswagon chose Tennessee over Alabama in 2008 as the location of its new U.S. assembly plant.