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Boeing appeals for review of lost deal

Stephen Beard Mar 11, 2008


Doug Krizner: Boeing is hot under the collar about losing a bid to build mid-air refueling tankers for the Air Force. This $35 billion contract was given to a group that includes it’s European rival, Airbus. Well today, Boeing is filing an appeal with the Government Accountability Office. Stephen Beard has more.

Stephen Beard: EADS and its Airbus subsidiary have been bracing themselves for this since they and their partners won the Air Force contract. The deal is to supply aerial refuelling tankers.

Boeing is now appealing to the Government Accountability Office to overturn that deal. Boeing says the bidding was unfair. The Air Force changed its requirements in the middle of the process.

But analysts say the real argument is about jobs. The Boeing deal would have sustained 44,000 jobs in the U.S. — twice as many as EADS will create.

Howard Wheeldon of BGC brokers says EADS now has a major political fight on its hands:

Howard Wheeldon: It’s happening in an election year, which doesn’t make it any easier for Airbus and its EADS parent. This will be one of the largest battles we will ever have seen in the defense industry involving international players.

The GAO could take up three months to review the deal. It could send the contract back for rebidding.

In London, this is Stephen Beard for Marketplace.

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