Europeans Call Pentagon Aircraft Contract ‘Protectionist’

Washington, D.C., United States (AHN) – European resentment over the loss of a military aircraft contract with the Pentagon is likely to play a role in a meeting this month between President Obama and French President Nicolas Sarkozy.

The French president and British Prime Minister Gordon Brown accused the United States last week of protectionism in a $40 billion contract to build aerial-refueling tankers for the U.S. Air Force.

They say the U.S. Defense Department set specifications in the contract that favored Boeing Co. but forced a consortium consisting of Northrop Grumman Corp. and European Aeronautic Defence & Space Co. (EADS) out of the deal. EADS is the parent company of aircraft manufacturer Airbus.

“Such methods by the United States are not good for its European allies, and such methods are not good for the United States, a great, leading nation with which we are on close and friendly terms,” Sarkozy said during a joint press conference with Brown. “If they want to be heard in the fight against protectionism, they should not set the example of protectionism.”

Brown said he was disappointed Northrop Grumman-EADS’s chances for the contract fell apart.

“We believe in free trade, we believe in open markets, we believe in open competition,” Brown said.

Boeing is now the only bidder on the contract.

French government officials said Sarkozy would discuss the contract with Obama during their next meeting scheduled for March 30 in Washington, D.C.

U.S. Defense Department officials denied protectionism was a factor in seeking bids for the tanker contract.

European aircraft manufacturers might still have a chance at the $40 billion contract.

Last week, EADS sent a letter to the Defense Department saying the company was considering submitting a new bid.

EADS’s director of the Airbus Military division, Domingo Urena, said the bid would be competitive but he would not disclose a price.

He also hinted the company was seeking a new American partner company for a consortium.

“It’s certain that in the American market, if we had an American partner, that effectively gives us a point of entry,” Urena reportedly told journalists in Paris.

Another bid by EADS with a different partner might sidestep the partisan politics that Washington analysts say appears to have influenced Boeing’s leading role in the contract.

Northrop Grumman has traditionally drawn support from Republicans for government contracts. Boeing has more often won support from Democrats.

The Air Force started it quest to replace its decades-old fleet of tankers during the administration of George W. Bush.

Northrop Grumman and EADS hired a consulting firm led by a friend of the Bush family. The consortium also chose the strongly Republican state of Alabama as its manufacturing site for the aircraft.

Since then, Republicans suffered a big defeat in the last election, bringing the Democratic Obama administration to power.

The Northrop Grumman-EADS consortium initially won the contract in 2008, but Boeing successfully protested it.

Terms of the contract being sought now were written during the Obama administration.

Shortly afterward, the Northrop Grumman-EADS consortium dropped out of the bidding.

The contract would provide EADS’s Airbus manufacturing unit with an important foothold in the United States.

Many of its customers are in the United States but its manufacturing is done in Europe.

The rising strength of the euro compared with the dollar has hurt Airbus’s ability to compete with Boeing and other U.S. competitors.

A U.S. manufacturing base would make Airbus more competitive in the United States.

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