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Northrop, EADS to invest 600 mln dlrs in Alabama site

by Staff Writers
Washington (AFP) March 7, 2008
Northrop Grumman and its European partner EADS, the winners of a US Air Force tanker contract a week ago, will invest 600 million dollars in an Alabama plant where the planes will be assembled, the head of EADS's subsidiary Airbus said Friday.

"We will invest roughly 600 million dollars in all into these facilities here," said Tom Enders, chief executive of Airbus, in a conference call from Mobile, Alabama, where the plant will operate.

An Airbus spokesman told AFP the 600 million dollars will be jointly invested by the partners.

The US Air Force announced a week ago that it had picked the team led by Northrop Grumman Corporation and the European Aeronautic Defence and Space Company (EADS) for a 35-billion-dollar aerial refueling tanker contract.

The Boeing Company had been heavily favored to win the contest to provide 179 new KC-45A tankers, an initial phase in replacing the air force's aging Boeing-made fleet.

With its defeat, Boeing's arch-rival in commercial aircraft, the France-based Airbus will now assemble commercial 330s in Alabama. Separately, Northrop Grumman will convert the planes into tankers using sensitive military technology that is not to be shared.

Airbus's Enders confirmed that EADS would create 1,300 jobs in the southern state directly as a result of the contract, and that Northrop would deliver the first KC-45A to the air force in 2011.

Boeing, meanwhile, was debriefed by the air force on the reasons why it was not selected for the lucrative contract.

"The company must decide now whether they're going to make a formal complaint," a source close to the situation told AFP. "They have not made a final decision about the complaint."

Neither Boeing nor the Pentagon were immediately available for comment.

Boeing suggested Wednesday it may protest the air force decision, which has sparked a backlash in Congress over the spending of tax dollars on a major military project that will partly profit a foreign company.

"In our view, there's a disconnection between what they talked about during their press conference and the requirements we read in the documents," Jim Albaugh, president and chief executive of Boeing Integrated Defense Systems, said in a conference call with analysts.

The sensitive issue of job losses and gains on both sides of the Atlantic was highlighted in a testy panel hearing Tuesday in Congress.

The commercial battle took on protectionist hues as air force procurement chief Sue Payton faced heated questions at a hearing Wednesday of the House Appropriations Subcommittee on Defense.

"This is a crown jewel of American technology we are now giving away to the Europeans," said Norman Dicks, a representative of Washington state, where Boeing assembly operations are located.

Todd Tiahrt, a Kansas Republican, said: "It's outsourcing our national security."

"Choosing a French tanker over an American tanker doesn't make sense to the American people," he added.

Payton said the Northrop Grumman/EADS team "met and exceeded the requirements" of the bid criteria and jobs creation had not been considered in the evaluation, "according to the law."

Defense Secretary Robert Gates the same day told a news conference that he believed "it was a fair competition."

"If there is a desire to change the rules of the game, in terms of how these competitions are carried out, clearly the Congress can do that," he said.

House Leader Nancy Pelosi has called for a congressional investigation into the awarding of the contract.

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China air passenger traffic up 16.8 percent in 2007: state media
Beijing (AFP) March 7, 2008
China's air traffic continued to soar in 2007 hitting 387.6 million passenger trips, up 16.8 percent from the previous year, state media reported Friday.

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