Posted on 01/12/2008 6:06:54 PM PST by Paleo Conservative
The European Aeronautic Defence and Space Co. has approved plans to shift production of commercial Airbus aircraft to Mobile, contingent on the company winning a military contract to build aerial refueling tankers for the U.S. Air Force, according to officials familiar with the project.
EADS, the parent company of Airbus, is set to announce Monday it will produce a cargo version of its popular A330-200 twin-engine jet in a new plant at Brookley Field Industrial Complex if its bid for the Air Force contract is successful.
Any move to the U.S. by Airbus, which currently assembles all of its commercial aircraft in Europe, could have a dramatic and far-reaching impact on the global aerospace industry. Large aircraft are currently assembled in only two places in the world -- Toulouse, France, where Airbus is based, and the Seattle area, the production home of archrival Boeing Co.
The European company has long sought a foothold in the lucrative North
American market. Those efforts have gained urgency with the dollar's decline against the euro, a development that Airbus officials have characterized as "life threatening" to the company.
EADS' brightest prospect for growth in the U.S. is the $40 billion Air Force tanker contract. The company is teamed with Northrop Grumman Corp. in a fierce battle against Boeing, which would build its tankers in Everett, Wash. The Air Force is expected to pick a winner by March.
Northrop and EADS have projected the tanker program will create up to 1,500 direct jobs in Mobile, plus about 5,000 more at spin-off businesses statewide. Adding the freighter would boost direct employment by at least 200 to 300 workers, according to local officials who were briefed on the company's plans.
State and local governments lured the Northrop-EADS project with $120 million in tax breaks and other incentives. Officials said that package was not expected to change.
EADS and Airbus have scheduled a news conference Monday at the Airbus engineering center in Mobile, where the company employs about 100 aircraft designers currently assigned to the A350 commercial jet.
The event is scheduled to include top company officials including Tom Enders, president and chief executive of Airbus, and Ralph Crosby, chairman and chief executive of EADS North America, as well as Gov. Bob Riley and U.S. Sen. Jeff Sessions, R-Mobile, among other state and local elected officials.
Industry experts said the timing of the announcement could boost Mobile's chances at landing a share of the tanker work. The Air Force wants the new planes to replace its aging fleet of more than 500 KC-135 tankers. It has said it will buy 12 to 15 planes annually under an initial, 179-plane order.
By raising its rate of production to include freighters, EADS could gain economies of scale, reducing its assembly costs and potentially saving the Air Force thousands of dollars on each plane, according to analysts.
"It could have a significant influence if they factored it into their proposal" to the Air Force, said analyst Scott Hamilton, president of the Leeham Co. near Seattle.
Final bids on the contract were submitted to the Air Force on Jan. 3.
EADS and Northrop together are offering a KC-30 tanker that is based on the commercial A330, currently assembled by Airbus in Toulouse.
Airbus last year introduced a cargo freighter, the A330-200F, designed to meet growing global demand among air couriers for a widebody, long-haul transport plane. Airbus has racked up 66 orders for the freighter so far and has said it will deliver the first planes to customers in late 2009. The plane's list price is $175 million, but industry publications have reported discounts of more than 50 percent for early buyers.
The freighter's initial production would likely take place in Toulouse while the Mobile plant is constructed, but Mobile would become Airbus' sole production site for the A330 freighter, according to officials familiar with the project.
It could also open a world of possibilities at Brookley.
"You start building commercial airplanes and anything's possible. But the first one is the hardest because of the expense and the politics involved in starting it up," said Hamilton.
Hamilton said the shift could be opposed by Airbus union employees in Europe.
Airbus has said it received a record number of new orders in 2007. But the company has struggled financially because it pays European wages to build its planes and earns its sales in dollars.
At EADS, which gets two-thirds of its income from Airbus, officials have complained that every 10-cent rise in the euro's value against the U.S. dollar costs the company $1.5 billion in lost revenue. Getting production into the "dollar zone" would help offset that disadvantage and improve the company's competitiveness, EADS chief executive Louis Gallois told reporters in Europe on Thursday.
"Now is the right time to strike in the U.S. because the dollar is very low," Gallois said at the company's annual press briefing in Germany.
He said U.S. production posed no threat to European jobs and that EADS was eyeing several acquisition targets in America.
"We won't move plants from Europe to the U.S., but some plants in Europe could shift their additional work," he said.
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With Patty Murry in the leadership of the Democratic Party, EADS is not going to get the contract. Those planes will be built in Everett.
Wish Boeing luck.
What a contrast in selling practices. When I bought the first 20,000 copiers for the American market from Japan, they demanded the top wholesale price with an attitude of, if you want the new great stuff you are going to pay for it. If the product worked you continued to pay top dollar. If there were glitches only then would they discount.
I believe that the Il-96 still in production. It's very close to the 330 in size.
Does anyone know when the 787 is going to take its first flight? Wasn’t it supposed to be in September and then it was pushed back? I can’t wait to see it in the air and in service.
It's not as efficient as the A330, and it doesn't have any option for US built engines. It has an option for Rolls Royce engines, but why buy a four engine plane in that size class? I really doubt the US would buy a Russian plane anyway considering the potential to have the supply of spare parts cut off.
I'm not suggesting that anyone not under Russian control would buy one, I'm just pointing out an inaccuracy in the article.
Unfortunately this is how contracts are won these days.
By the way, I wouldn't be surprised that the USAF actually splits the order between the 767 variant and the A330-200F variant.
Wouldn't a 777-200F make an even better tanker/freighter than the A330 according to Airbus' criteria for favoring the A330-200F over the 767-200LRF? The 777 would have a higher MTOW and could carry more cargo and fuel than the A330, plus it doesn't require a blister on the bottom of the fuselage to correct the design error in the original A330 landing gear.
The CAD designed A330 landing gear is too short causing the passenger deck to not be level. This isn't much of a problem for the passenger plane, but it's a serious problem for loading and unloading heavy cargo pallets and containers. The blister can't be beneficial to the aerodynamics of the A330-200F.
The A330 takes up more ramp space than the 767 or KC-135, so it would actually decrease the amount of fuel that could be offloaded from planes based at existing air bases especially in Europe. The KC-767 takes up the same amount of ramp space as the KC-135 while being able to lift a few thousand pounds more fuel than the KC-135R. The A330 has a much greater wing span than the 767 or KC-135 requiring new hangers to be built on air bases currently servicing KC-135's. The 767 can use the existing KC-135 hangers with just a few modifications to the doors.
Airbus suggests the USAF might want to split their order between the KC-30 and KC-767. If the USAF wanted to get a plane that could supplement or replace the KC-10, a tanker variant of the 777-200F, which is a derviative of the 777-200LR, would be superior to the KC-30. The 767 is superior to the A330 as a KC-135 replacement. So if the USAF were to split its orders for tankers, it should split them between the 767 and the 777.
But why not split its orders between a 767 variant and a 777-200F variant? The 777 would make a superior KC-10 supplement or replacment than the A330. Please read my comment #13.
Anyone know if the original bid calls for more than one type of plane?
How about the total number requested in the bid?
In the meantime I’ll see if I can find the answers.
http://www.defenseindustrydaily.com/the-usafs-kcx-aerial-tanker-rfp-03009/
The above link has all the info.
Here’s a novel concept. Why doesn’t the Air Force just pick the aircraft that does the best job for the best price and be done with it?
I believe one IL-96 variant comes with P&W engines.
What have you been smoking and where can I get some?
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