In a stunning decision, the U.S. Air Force awarded its biggest-ever military order to a foreign supplier at the end of February. The $40 billion deal, conferred to a partnership led by the European Aeronautic Defense and Space Co. (eads), was a blow to U.S.-based rival Boeing, which was the odds-on favorite to win. More importantly, this contract to supply the military with new airborne refueling tankers confirms what analysts have called a “major shift” in U.S. procurement policy.
The contract, currently one of the largest at the Pentagon, has the potential to ratchet up to a massive $100 billion. It breaks a multi-decade relationship with Boeing, the company that built the bulk of America’s existing fleet. The 179 planes on order will be based on the European Airbus 330 design, and although the final assembly of the craft will take place in Alabama, components will be engineered and manufactured around the globe.
“This isn’t an upset,” Loren Thompson, a military analyst at Washington’s Lexington Institute, said. “It’s an earthquake” (International Herald Tribune, March 1).
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