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High stakes for military contracts

Marketplace Staff Apr 25, 2008


Renita Jablonski: Airbus and Boeing have been locked in a long, bruising battle for military aircraft contracts around the world. Just a month ago here in the U.S., EADS, the parent company of Airbus, snatched away a nearly $40 billion tanker contract from Boeing. Today, both companies are in India vying for an $11 billion fighter jet contract. From New Delhi, Mehul Srivastava reports.

Mehul Srivastava: EADS brought out the big guns in New Delhi — the German ambassador, the CEO of its military systems and, of course, for the 24-hour news channels, a music video.

Unidentified announcer: …would like to introduce you to a state-of-the art aircraft, an aircraft that has been designed, manufactured, tested and integrated into NATO structures in Europe and is now ready to cruise the bright skies of India.

This is the biggest contract for military equipment open for bidding in the world right now. EADS executive Berhnard Gerwert told military officials that he was confident his company would beat Boeing once again.

Berhnard Gerwert: We won the tanker aircraft business in U.S., and that was a real breakthrough, as well, for our company.

India’s military plans to spend $100 billion in the next 10 years. But so far, American companies, like Boeing, have not been able to get a major piece of this pie. Bids are due Monday, but it could be months before a winner is named.

In New Delhi, I’m Mehul Srivastava for Marketplace.

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