EADS/Northrop trumps Boeing in Air Force tanker competition

Boeing has lost the long-awaited and lucrative Air Force refueling tanker contract to a competing bid based on an Airbus airplane, Air Force officials said Friday.

The newly named KC-45A plane will be produced by a partnership between Europe's EADS and Northrop Grumman, Air Force Secretary Michael Wynne said.

The outcome is a shocking upset, kept secret until just before the formal announcement today.

The Boeing loss means that the 767 assembly line in Everett will wind to a close around 2012 when the current commercial orders run out.

No layoffs are likely as workers will transfer to other programs. But Washington State has lost out on the chance to add as many as 9,000 jobs.

Until now, Boeing has had a monopoly on the supply of large air tankers to the U.S. military. But Northrop Grumman, in partnership with Airbus parent EADS, will build the next generation tankers using a modified Airbus A330 instead of the Everett-built 767 Boeing had put forward.

The deal, worth about $40 billion over two decades, is for the supply and maintenance of 179 tankers replacing old Boeing-built KC-135 airplanes.

Air tankers — which connect via flexible hoses and rigid booms to fighter jets and bombers in flight, enabling them to refill their gas tanks on long-range missions — are central to the projection of U.S. air power across the globe.

So the Air Force selection of an airplane designed and largely built in Europe breaks new ground in the world of defense contracts and is a mighty blow to Boeing's prestige.

The competition has loomed large in the Boeing psyche.

It had hoped to finally exorcise the hit to its reputation connected with the scandalous collapse of the original 2001 tanker deal and the threat of letting its main foreign competitor enter the U.S. defense market on a big contract.

Yet perhaps the most important aspect of the loss for Boeing is the new competitive threat from EADS: its European rival will now go ahead with its plan to build a widebody jet factory in Mobile, Ala., that will churn out commercial A330 freighters as well as the military tanker airplanes.

Dominic Gates: 206-464-2963 or dgates@seattletimes.com