EADS to bid on tanker

Reuters just moved this story that EADS is preparing to bid the contract alone. L-3 Communications appears to be definitely out of partnering with EADS and “for now” EADS is prepared to go it alone, Reuters says.

Sen. Jeff Sessions (R-EADS/AL) blasted US Rep. Norm Dicks (D-Boeing/WA) for what Sessions termed attempts to intimidate potential EADS partners. Here is this report.

From strictly a taxpayers’ point of view, the EADS competition should result in better pricing for the Pentagon whoever wins. The past competition has already seen the price driven down compared with the original Boeing lease deal from 2002-2004 and an improved airplane offering from Boeing.

Boeing’s KC-767 NewGen appears to be a still-better offering compared with the KC-767 Advanced Tanker offered in the 2006-2008 competition. The 767NG has a 787-based cockpit (vs one based on the 767-400/777) and winglets, for additional fuel savings. Boeing is offering yet another version of the refueling boom compared with the 767AT. It’s not clear whether the 767NG incorporates a wing from the 767-300ERF as did the 767AT, but industry sources believe this to be the case but Boeing hasn’t commented one way or the other.

Richard Aboulafia issued his April newsletter (TealApr10AC) on the KC-X competition. In it, he raises a point we’ve been harping on for some time: when are the Boeing supporters going to actually talk about the attributes of the KC-767 and why Boeing should win rather than why Northrop/EADS/Airbus shouldn’t be allowed to compete? The absence of a pro-Boeing message in contrast to the anti-Airbus message is pretty stark, in our opinion, and raises a lot of questions.

117 Comments on “EADS to bid on tanker

    • “When will this saga bloody end?”

      Wrong word order.
      This saga will end … 😉

      My guess is every sleeping dog will
      be called to do duty now.

  1. Reuters is reporting that EADS is prepared to bid on the Tanker alone. They do not have an American Company to partner with yet.

    This is coming from an “unnamed source”.

    I think this is grasping at straws and perhaps pride is keeping them in the competition. Without a partner and with their plane, they do not stand a ghost of a chance.

    Maybe this is a favor to the DOD so that there will not be a single source competition. In return, their bidding on the KC 10 will be looked upon more favorably

    • What about paying $100m for the right to object at the end… the USAF will need to be at it’s best behavior.
      Or maybe they’ll trade the right to contest for keeping hte marine one.
      Looks like it’s all politics now.

      I don’t think the 330 stands a chance against the 777 for the KC-10 replacement.

  2. Talk about falling on your sword. EADS is just setting itself up for another excuse to call out the U.S. for being protectionist. At the same time, they will play spoiler to Boeing’s bid.

  3. This is coming from unnamed sources so who really knows the truth behind their decisionmaking. Maybe it is attempt to attract partners..maybe it is a face saving temporary move…maybe they will ultimately withdraw.

    Its the prolonged strum and drang that is so annoying and headline grabbing

  4. leehamnet,

    Like Yogi Berra’s observation, “its not over until it is over”

  5. So, this is transpiring pretty much along the lines that I predicted in the previous thread. 🙂

  6. IMO its mainly a national pride thing- and leaves the door open to protest again if BA wins

    It will force BA to keep a sharp pencil which is not all bad

    But – BUT – if BA does not win – there will be a major melt down in congress- and the administration-, funding will be cancelled, the jobs situation will anger the great american unwashed even more….

    borrow money from china – pay the intrest- send it to EADS/france to help their economy, and put the whole mess on the Obamacard to be paid off by the next two to three generations . . .

    The ensuing revolt might make the french and russian revolutions regarding economics look like a kiddies training grounds.

    Any congresscritter running as an incumbent will be political toast

    And the Airforce will have to wait another 5 to 10 years.

    Looks like a long hot summer . .

    • If EADS wins, funding will not likely be cancelled as the administration and the cooler heads in Congress know that the US has much more to lose in the long run if much of the EU would no longer be open to American arms manufacturers (worst case scenario).

      So, if EADS wins, expect a new campaign from the Boeing camp, but this time for a dual buy….. 😉

      • Don S has it right; there will be “war”. And the USAF will wait, and wait, and wait….

      • So?

        Again, in the event of an EADS win, the only battle the Boeing camp will win, is that for a dual buy.

      • it’s Norm Dick that controls the pentagon bucks now –
        I’ll bet an EADS win will not get the funding it needs. Just enough to keep going but little enough to force delays and thus cost overruns – burying EADS in their win.

    • “borrow money from china – pay the intrest- send it to EADS/france to help their economy, and put the whole mess on the Obamacard to be paid off by the next two to three generations . . .”

      To put some humor to this:
      On the Euroside we only want our money from fraudulent CDS and similar “products” back. ( as they say “your money is not lost, somebody else has it” )
      so the question is islandic ( and you would even get some tankers in return 😉

  7. when are the Boeing supporters going to actually talk about the attributes of the KC-767 and why Boeing should win rather than why Northrop/EADS/Airbus shouldn’t be allowed to compete?

    Great point you are making here!

    It is time that people put aside rivalries and start to define a great offering for the USAF and the American people.

    • Let’s see what aircraft Boeing proposes before we can seriously discuss attributes. Besides, this is much more than a competition for a logistics aircraft. Boeing is out of the tanker business if they lose. Do we really want to cede this vital force projection asset to an offshore company?

      That will be the crux of the political debate.

      • No, no and no.

        In the event of an EADS win, the crux of the political debate will be centred around a dual buy. Tricky Dicks will be marginalised.

      • A dual buy is wishful thinking. We can have these circular arguments all day, but you simply do not have a sense of the politics here. DOD should have learned their lesson on the last round. There is much working in the background that permitted the offer of a 60 day extension. Afghanistan and Iran come to mind as the two immediate considerations. Nonetheless, if EADS does manage to win this with a likely low ball bid, there will be protests, court challenges, and a battle royale over funding. This extension only guarantees war without end.

        In three years time, we will be debating Tanker Round 4. DOD has performed the unlikely feat of a self-inflicted double tap to forehead.

  8. Sure, I’ve no doubt that Tricky Dicks and his cohorts would have little, or no qualms in fighting a perpetual war. However, if EADS wins this round, Boeing’s top management knows that their company might have a lot to loose in the event the EU should unilaterally “punish” Boeing (and not LM, NG etc) in a quid pro quo first response. In addition, the company’s global reputation is at stake. The longer this plays out with Boeing not winning on merit, the longer their company’s brand will be exposed in an unfavourable way on the world stage; and all this in a context where current and prospective governmental and commercial customers certainly will take notice of a company which, among other things, is promoting “free trade abroad, and petty protectionism at home. I, for one, believe that Boeing is smarter than that, and would accept a dual buy to not only protect their brand, but also their long term commercial interests in Europe (Aviation, Defense, Space).

  9. Its obvious that the only reason EADS is bidding is because they think they can win!
    I made a point in an earlier thread that without an American partners costs and profit to cover, EADS price could be pretty keen.

    • Even without a good chance to win another round on the wheel
      of infinity:
      What about EADS’s making its investment up to now worth something
      in face of a fair competition chance receeding fast?

      The WTO litigation was/is expensive (and seemingly frivolous,
      the judgement a wet firecracker).
      The upcoming result of the followup litigation in conjunction with
      the driving force caught “red handed” _again_ could force quite
      a pyrrhic element on a Boeing win.
      My tentative guess is that now even EADS has stepped away from
      competing in a competition and working it as political maneuvering
      now.

  10. So how good are EADS chances of winning this?

    Can we expect an award(eventually) and then a protest by whoever loses?

    Can you get a GT200 on EBAY?
    Excellent points Scott!

  11. Well hat’s off to EADS if they want to push this bid through and best of luck. I really didn’t see them making a bid without a U.S. partner. It just doesn’t seem plausible that they could replace NG’s expertise in such a short time. A few days ago in a German Magazine called Focus (April 18, 2010) Tom Enders was quoted as saying, “We know, we have the better product, and white also the US Air Force “, said Enders. „However we begin even if we see a victory chance. “Airbus needs to it a competent US partner.” You’ll need to excuse the translation it’s from babelfish.

    So what is it? Is Reuter’s unamed source a valid source of information? I’m still of the mind that in order to make a competitive BID EADS needs as Ender’s puts it a “competent US partner”. I just don’t see how EADS N.A. Sercurity Solutions can be considered a competent organization to handle the communications and battle management aspects of the project. EADS Security Solutions lists their expertise as; IT Engineering, IT IA training, Compliance Assessment and Evaluation, Cyber Security, etc. They are the only division in EADS that can legally handle the communcations issues with regard to the tanker and their cup of tea is internet security.

    It could be that EADS wants to make a point that they can bid for large US government contracts and given that EADS and NG have already spent nearly $200 million on the previous bid they should have plenty of background material for the bid. But I still don’t think your internet security division can handle the communications and other battlemanagement functions the Air Force wants for the KC-X tanker. Hopefully this thing will be decided shortly one way or another, the DoD needs to get on with the contest.

    Link to EADS N.A. Security Solutions at http://www.eads-na-security.com/

  12. Since Scott and others are asking for Boeing supporters to speak to the “attributes” of why some of us feel the KC-767 is a better choice than the KC-330, here’s my points that need to be repeated – yes I have posted these previously.

    First let me say that I have 22+ years of tanker operational and employment experience for the USAF – and still doing it. While airlines may not value what the pilots want in an airplane, the USAF is not an airline. To get to the top in the USAF, it is nearly a requirement to have been a pilot with operational experience. I have no doubt that peers of mine (and those that preceded me) had their say into what the requirements are for the KC-135 replacement. What the acquisition folks do with those requirements may get twisted – hence the successful Boeing GAO challenge last time around. (I’m not suggesting the USAF wrote or writes requirements to give a bidder an edge – even though many of the EADS supports allege that.)

    Here are the attributes that make the KC-767 better than the KC-330 as a KC-135 replacement in my view:

    1. Smaller than the KC-330. Because when we take our aircraft to war, we are using loaned/leased ramp space. The more aircraft I can park in that given ramp, the more booms I can put in the air – supporting more war fighting. Size matters – I cannot take to war more tankers than I can park. There will be times when I have to have all my aircraft on the ground. Since I am on borrowed ramp space, I’m at the mercy of our host nation. I have to share that ramp amongst all my flying assets; the larger the length and wingspan, the larger the footprint, the larger the parking rows have to be spaced to allow taxiing, and the fewer planes per row due to longer wingspan. Fact is, I can fit fewer KC-767s in my tanker parking area than KC-135s. Where I could fit 40 KC-135’s, I may get 30 KC-767’s, or 26 KC-10’s, or just 20 KC-330’s. That’s a loss of booms in the air – but less of a loss with the KC-767. The USAF is 100% boom, sure we support the USN, USMC, and NATO customers with our drogues, but booms in the air is most important limiting factor to the USAF contribution of its air assets.

    2. Matches or slightly exceeds the fuel capacity of a KC-135 (at max gross TO weight). More is a little better, but since the replacement is air-refuelable itself, I don’t see much value in having much more fuel capacity. The problem is that the KC-330 is so much larger, such a larger footprint, I lose too many booms on my limited ramp space. Many compare the KC-330 to the KC-10, but if you compare the fuel capacity of them the KC-10 kills the KC-330 in max fuel capacity. I’d take the KC-10 over the larger KC-330 any day. (Yes, the 330 is larger than the 10.) The 330 may be a better airliner than the 10 or 767, but we don’t need/want an airliner.

    3. More capable with Pax, Air Evac, and Cargo. What is most important is the ability to change configurations quickly. More capability than the KC-135 is better, but watch out for the trade-offs in footprint and per-copy costs. An AMC Mission Capabilities Study was just released and guess what – the USAF has excess capacity in airlift (pax and cargo capability) and a shortage of tankers (for air refueling). The EADS supporters are putting much more weight into non-refueling missions than they should. I believe that the USAF is looking for a tanker first, the extra pax/cargo/air evac capabilities are icing on the cake. The DoD doesn’t need to pay for gold-plated weapon systems. I’ll concede that the 330 is better on non-refueling capabilities than the 767, but the USAF wants/needs tankers first and foremost. They should not pay for capabilities they don’t seek or need.

    Fact is today’s modern airliners can’t match the lift of the KC-135 for its size. The smaller one (767) is closer to the USAF requirements without having to pay for capabilities that are not needed. Many EADS supporters point to other air forces selection of the KC-30. Their choice/preference is based on vastly different needs than the USAF’s. Much smaller air forces, much smaller global role, and smaller tanker needs with more need for airlift.

    • Now, can you script this for Patty Murray, Norm Dicks, Todd Tiahrt, Sam Brownback and the host of other Boeing politicians who have their messaging all screwed up?

      • “Screwed up” or not, they all have something we don’t: a vote on appropriations.

    • 1) Size matters and “booms in the air” are important – but so is “available fuel” (The fewer KC30’s can carry aloft more fuel) and “fuel offloaded per fuel burned” (KC30 delivers fuel with higher efficiency at any range and from any strip – leaving more gas for the fighters)
      for every 6 kc-135’s you can get in both width and length 5×767’s and 4×330’s – so though it is true that for 6×6=36xkc-135 you get “only” 25×767 and 16×330 – but how often do you have the precise ramp space to fit 6 by 6 KC-135 (how would you taxi out the middle ones?) In the real world the reduction in a/c will be less than you indicate.
      The fuel offloaded on station for both 767 and 330 is larger than the kc135.
      So the question might be: would you rather have a few full booms or many half empty ones.

      2) The 767 in fact barely matches the minimum requirement in the RFP – but it does comply. It does this by adding fuel bladders thus reducing it’s flexibility. One possble value of more fuel is more time on station, more fighters refuelled per mission.
      The air force IFARA models showed you needed fewer 767/330 than 135 to complete a set of missions. Combining the IFARA assesment by the larger footprint still showed the 767 AND 330 provided more capacity at fixed airfields and fixed missions.
      The KC-10 is indeed a great tanker, better than the KC-135 (as shown by any usage statistics) – but the 330 is better still.

      3) BS. If you (the AMC) wants to claim the overworked C-17 (2000+ h/y) is in less demand than the tarmac hugging KC-135 (350 h/y), go right ahead. I’ll reserve teh right to call BS when I see it. I’ve read the USAF spends something like 3BUSD a YEAR to fly their troops alone – how much do they pay omega air to augment their shortage?
      I’ve also heard the AMC general say clearly that what they needed was a multi mission capable airframe. Both 767 and 330 pay homage by being multi mission – but beware of the extra effort required to transform a kc-767 from tanker to transport.
      Remember last time around the NG/EADS bid came in at the same ball-park figure as the Boeing offer. that’s the same number of 330’s vs 767 for the same price!
      Being better in non-core missions adds value to the 330, apparently without adding cost.
      AND the 330 is the better tanker – just not the cheapest, which gets central stage in this round of the tanker saga.

      Last time around the USAF had an integrated approach to this competition evaluating the offerors on capability and operational usability. Boeing objected to some procedural points, nothing technical, and this time around the RFP is completely rewritten to look only at cost instead of value.
      I am suggesting the USAF writes their RFP’s with an eye on the political reality in order to get their programs through both houses smoothly.

      • Ikkeman, are you a pilot, or are you merely parroting the EADS public relations department?

    • Dear GasPasser,

      I’d like to question some of your attributes.

      “1. Smaller than the KC-330. Because when we take our aircraft to war, we are using loaned/leased ramp space.”

      You narrowed your view just on aerial refueling and you just count the booms on the ground. KC-135 is the smallest aircraft of all. With references to this aircraft Maximum On Ground (MOG) for KC-767 is 1.3 times bigger. For KC-10 and C-17 factor is 1.5 and for KC-30 the factor is 1.8.

      Air Force is going to use the KC-X also as a dedicated airlifter. Two KC-30 can replace 3 C-17 for carrying bulk cargo and 5 C-17 for carrying troops.

      Another question is how many times an airfield is crowded due to aerial refueling missions and how many times due to airlift? Is it possible to use airfields further away for tanker operations? Yes. Is it useful to land airlifters further away from the front line? No.

      “That’s a loss of booms in the air – but less of a loss with the KC-767. The USAF is 100% boom, sure we support the USN, USMC, and NATO customers with our drogues,”

      The KC-X is also the promised tanker for USN. The loss of booms is reduced by the fact no tanker needs a drogue adaptor attached to its boom. You may have 40 KC-135 somewhere but not all with booms. When was the last war without support by USN aircraft? So let’s concentrate on KC-767 vs KC-30.

      I’d like to ask you a question. Does Air Force need nowadays more KC-135 like aircraft or a more KC-10 like aircraft?

      “Matches or slightly exceeds the fuel capacity of a KC-135 (at max gross TO weight). “

      You are referring to the KC-767. KC-30 can provide 50 % more fuel at a distance of 1,000 nm. At 2,500 nm it’s nearly 3 times more.

      “More is a little better, but since the replacement is air-refuelable itself, I don’t see much value in having much more fuel capacity.”

      How do you get the fuel there?

      “I lose too many booms on my limited ramp space.”

      No. You just limited the way of how to use the KC-X to the way the KC-135 is used.

      “Many compare the KC-330 to the KC-10, but if you compare the fuel capacity of them the KC-10 kills the KC-330 in max fuel capacity.”

      At long distances KC-30 can provide more fuel than KC-10. You mix up fuel capacity with fuel offload capacity. What was your job, you said?

      “The 330 may be a better airliner than the 10 or 767, but we don’t need/want an airliner.”

      “We” is not the RFP of the USAF and AMC wanted KC-X to be an airlifter.

      “An AMC Mission Capabilities Study was just released and guess what – the USAF has excess capacity in airlift (pax and cargo capability) and a shortage of tankers (for air refueling).”
      http://www.afa.org/EdOp/PDFs/MCRS-2016_exec-summary.pdf
      “The demand ranges from 383 KC-10s/KC-135R-equivalents and 66 KC-130s to a high of 567 KC-10s/KC-135R-equivalents and 79 KC-130s. However, a modernized fleet would require fewer aircraft to meet the same demand (lower depot/greater capability)”
      Air Force calculated that one KC-767AT could replace 1.79 KC-135 and one KC-30 can replace 1.90 KC-135. For peak demand you’ll need about 317 KC-767 and 299 KC-30.

      “I believe that the USAF is looking for a tanker first, the extra pax/cargo/air evac capabilities are icing on the cake.”

      USAF wants to avoid rust on the cake. Therefore the extra capabilities are needed.

      “The DoD doesn’t need to pay for gold-plated weapon systems.”

      Like the KC-767AT? Smaller less capable aircraft but per unit more expensive?

      “I’ll concede that the 330 is better on non-refueling capabilities than the 767, but the USAF wants/needs tankers first and foremost.”

      What makes you think the A330 is a worse tanker than B767? Due to the fly-by-wire system the A330 is a much more stable platform for refueling slow flying aircraft.

      You just reduce the problem to MOG. But you missed something. With a more capable tanker you can use less “loaned/leased ramp space” and use own tanker bases. Can the USAF order faster more tankers or faster build more ramp space?

      “Many EADS supporters point to other air forces selection of the KC-30. Their choice/preference is based on vastly different needs than the USAF’s. Much smaller air forces, much smaller global role, and smaller tanker needs with more need for airlift.”

      I like that spin very much. Smaller countries with smaller armies got a bigger need for airlift than the US and the less capable tanker is better due to MOG.

      I think the KC-30 can also replace the KC-10. So USAF may order a KC-737 or KC-20 for KC-Y or KC-Z. The real tanker size according to the offload figures some people like to post.

  13. @ikkeman: “I am suggesting the USAF writes their RFP’s with an eye on the political reality in order to get their programs through both houses smoothly.”

    I wish I could agree with you, but I don’t think they are that smart.

    • Im an aeronautical engineer with experiance on NG, Boeing and Airbus programs. I’ve seen Seattle and Toulouse and have been an air- and tech head since the womb (according to my mother)

      I have no operational experiance other that during my holidays – And I instinctively distrust pilots because they always seem to be near when an airliner has a problem 🙂 <– SMILEY!!!
      What are your credentials?

    • To answer your previous insinuation:

      I’m an aeronautical engineer with experience on NG, Boeing and Airbus programs. I’ve seen Seattle and Toulouse and have been an air- and tech head since the womb (according to my mother)

      I have no operational experience other that during my holidays – And I instinctively distrust pilots because they always seem to be near when an airliner has a problem 🙂 <– SMILEY!!!

      What are your credentials?

  14. Ikkeman,

    “I am suggesting the USAF writes their RFP’s with an eye on the political reality in order to get their programs through both houses smoothly”

    There is a political reality and there always will be one. Politics influences and intrudes into the acquisition process. At one stage in this contest it helped Northrop assert a measurement scale that favored its larger plane.

    But as this ten year process lurched and proceeded, the Client carefully redefined the measurement and scope of its request which brings us to the present time.

    Only the USAF could answer your three points. They are too technical for most to determine and only the USAF has the ability to look at its entire fleet and decide what serves its overall mission.

    These questions were subsumed in the decision making process and resulted in a carefully crafted RFP.

    You and others are basically insisting that the USAF has been “forced” to define its needs in ways that avoids the better plane. You are alleging that regardless of the myriad of criteria and considerations, it favors one plane over the other and insist that this approach is “discriminatory”.

    It is this insistence that they got things wrong or “politics” has cast a dark shadow that is the crux the argument because they certainly have the right and need to define their own requirements without being informed by others what their TRUE requirements should be. They too live in a political world and have to take that into considerations when submitting their budgets or placing priorities on certain programs over the other.

    I think there is a larger picture here than most want to accept and it serves the debate by looking at the micro view rather than the macro and micro perspective.

    • I do not disagree with you on any specific point. The AF has the absolute right to request anything they feel they should, for whatever reason. Neither am I saying that keeping in mind teh political reality is a bad thing.

      You do leave one question unanswered: what has changed since the last RFP that the winner of that contest stands no chance this time around? (hint: the white house population?)
      and since both RFP’s are so dissimilar, which was wrong, why and who is to blame for the wrong one.

  15. GasPasser, the Air Force will not lend much credence to the current roster of KC-135 pilots’ likes and dislikes regarding the A330MRTT, and the KC-767 for that matter, if those views are not based on a sound technical insight.

    “I have no doubt that peers of mine (and those that preceded me) had their say into what the requirements are for the KC-135 replacement.”

    Of course they’ve “had their say” and inputs into the System Requirements Document (SRD). It’s just that the Air Force doesn’t value the likes and dislikes of their pilots when not all the facts have been available to them.

    You make the mistake in assuming that ramp space is the most important metric when the KC-X will be operated on foreign lands. One can always pay for added concrete and asphalt for larger ramps, but increasing the length of runways is, in most cases, an outright impossible undertaking due to local resistance from local residents, politicians, environmental activists (etc).

    The A330MRTT’s excellent takeoff performance and its significant fuel offload capability provide significantly better performance than that of the KC-767 in two important parameters; global airfield availability and fuel load carried from facilities with 7,000 ft. runways. Although the 7000 ft. requirements has been taken out of the latest RFP, it doesn’t change anything in regard to the real capabilities of the two contenders.

    The aerodynamic performance is an extremely important parameter. A big wing with a large span results in better aerodynamics and the best reduction in fuel burn. Of course, there is a point at which, for a target range increasing weight becomes counterproductive, but that is not a problem for the A330-200, which incidentally has a lower thrust-to-weight (t/w) ratio than the 767-200. The optimization point for a wing is influenced by effects such as aircraft weight at cruise altitude, and other parameters such as low speed performance and single-engine ceiling, which must be factored into the decision-making process when the design is frozen.

    It’s a fact that the KC-767 cannot operate from shorter runways safely, because it can’t stop as quickly as the A330, and so it needs a longer Balanced Field Length (BFL).

    There are many existing real world tanker bases where the runways are too short for a fully laden KC-767 tanker to use, but where a KC-30 has no trouble. Higher temperature, higher altitude means that you need more runway, lower temperature means less.

    Do note that the much longer wing on the KC-30 improves not only take-off performance, but improves the braking performance during rejected take-offs (bigger spoilers, high-lift devices etc). Also, the longer moment arm on the KC-30 tailplane and rudder, makes a difference to BFL requirements, as well as braking, thrust reverse performance, etc.

    Therefore, the KC-30 is a better tanker than the KC-767 not because it’s bigger, nor because it’s a better airliner (it is, as it happens) but because it can do the military tanker role better.

    That means that the KC-30 can take off with more fuel from a real world tanker base. From Mildenhall or Brize, for example, a KC-30 can take off with 111 tonnes of fuel. A KC-767AT would have to unload some 12-15 tonnes of its smaller load (92 tonnes would be reduced to 77-80 tonnes).

  16. OV-099: “GasPasser, the Air Force will not lend much credence to the current roster of KC-135 pilots’ likes and dislikes regarding the A330MRTT, and the KC-767 for that matter, if those views are not based on a sound technical insight. ”

    And how do you know this? This is an astonishingly arrogant statement to make unless you happen to be in DOD acquisition. Are you?

    • I take it that you haven’t read the System Requirements Document (SRD).

  17. My understanding of the circumstances was that in the discussions between DOD or the USAF and the manufactiurers which lead up to the actual bid and selection process, unequal information of the qualities to be valued was given. That is, somehow or other an unfair discourse made the process unbalanced or “unfair”. Boeing claimed in a protest that was upheld, that they were not informed of the merits or need for a larger multiuse plane and this lack of information inhibited their submission and was an expression of favoritism towards Northrop.

    Other rumors or truths was the influence that Sen John McCain exercised in his antagonism towards Boeing and his new alliance with Northrop. During McCain’s Presidential Campaign there was a strong presence of former Northrop people on his staff. It was also surmised that they were helpful in organizing and fund raising for his Presidential bid. Airbus would be more present in Republican States if they received the Tanker contest and that had definite attraction during the Campaign bid.

    I am sure a book could be written on this phase. Most of it sounds like good old American Political /Corporate alignments and seems plausible. I am not so intimately informed but it could account for success of Northrop and the changes that have been made to the current RFP. It does not sound implausible.

    Now the world has changed. Secretary Gates took a major role in seeing this contest through. Boeing may have been awakened in its complacency or belief that it had the only plane, Northrop became more aggressive, The world suffered an economic turndown, the WTO found Airbus wrong in accepting certain types of loans and the population of elected Washington changes, etc.

    What may of been thought as a perfunctory Bidding process turned into a closely scrutinized European American Contest with an enormous amount of Lobbying and Congressional and Military infighting.

    So, What went wrong? and why and who is to blame for the wrong one? That is not very easy to put simply, but the result of this military acquisition program has resulted in scandals, protests, two awards, fines, resignations, criminal charges and the Pentagon and the Secretary of Defense stepping in to get some control and order over this matter. It has gone through several administrations and has landed in the present time still unresolved.

    Put simply the Military Industrial Political Complex is still alive and well and has even expanded internationally.

    I hope this is somewhat of a good stab at some answers.

  18. The past response was in response to Ikkeman’s question which is now several posts away.

    It strikes me that OV-099 is a professional to this matter and I would not be surprised that he is part of a public relations effort on behalf of Airbus. His ostensible knowledge and responses are just too well crafted to come from an amateur.

    Since Aurora has the nerve to ask Gaspasser if he is in DOD Acquisition.it may be very enlightening to find out the involvements of several of the people responding .

  19. Aurora…misread…the arrogance comes from OV 099…

    I am more convinced that he is a professional associated with EADS, Northrop or Airbus or an allied firm.

  20. OV-099, you have not qualified your statements that USAF does not listen to its pilots. How do you know this? Are you a member of DOD/USAF? What makes you qualified to make such an astonishingly arrogant, and utterly misinformed, statement?

  21. Aurora, I’d suggest that you spend less time at places such as dodbuzz.com*** if you haven’t got the time to fully read through and comprehend what is written. I never said that “USAF does not listen to its pilots”, but rather that the Air Force will listen to their pilots views when those are based on sound technical insights, while they won’t listen to their pilots views if, or when, those views are based on silly perceptions such as how “rugged” the tankers may be (etc). Furthermore, I stated that the pilots have “had their say” and inputs into the System Requirements Document (SRD), but since you apparently don’t know what the SRD is, I’m not surprised that this point eluded you.

    *** http://www.dodbuzz.com/2010/04/20/eads-goes-alone-on-kc-x/#axzz0lgARGztw

    • OV-099, the Air Force ALWAYS listens to its pilots, for better or worse. You simply have no idea what your are talking about if you claim otherwise, or insist on qualifying your remarks. Shrillness and stridency can’t conceal an arrogance and naivete that is simply astonishing.

      BA Investor, I agree with your conjecture. I suspect EADS has “seeded” certain sites with mouth pieces to continually cast aspersions on honest opinion.

      • Aurora, what are you talking about? Of course the Air Force listens to its pilots, it’s just that they don’t let them have the final say in multi billion dollar procurement decisions.

        As I wrote in the previous thread in a response to Joanne; pilots tend to be a conservative bunch which, of course, is a healthy quality in aviation. However, since Airbus’ FBW technology (starting with the A320) represented a significant step change in design philosophy, pilots have sometimes taken quite a cynical view of the new concepts involved, especially when not all the facts have been available to them.

        If the views presented here by GasPasser and Joanne’s husband represent the opinions of most KC-135 pilots, and if the views of these pilots would’ve been the deciding factor in the decision making process, then the Pentagon’s top brass would never even have considered the EADS offering.

        “BA Investor, I agree with your conjecture. I suspect EADS has “seeded” certain sites with mouth pieces to continually cast aspersions on honest opinion.”

        LOL

        It’s interesting how you resort to silly conspiratorial “explanations” and subtle ad hominem attacks, while talking about “honest opinion” at the same time.

      • Aurora, Boeing Investor, OV-099, et al….

        FWIW, we don’t really care if someone is employed by Boeing, Northrop, EADS, Airbus, a supplier or is an investor in these companies or is a stakeholder in some other fashion. We largely view this as irrelevant, as long as everyone is respectful on our forum. Any stakeholder, whatever the description, is entitled to his/her view. So we don’t see the particular value in shifting to a debate over who is connected with what. While some may suspect EADS has “seeded” certain sites, don’t be so naive as to think Boeing doesn’t do the same thing. So while this line of discussion may be (perhaps) entertaining, we don’t think it really accomplishes much to the topic at hand.

        FWIW.

  22. “There are many existing real world tanker bases where the runways are too short for a fully laden KC-767 tanker to use, but where a KC-30 has no trouble. Higher temperature, higher altitude means that you need more runway, lower temperature means less.”

    Well why not use a KC-767 that is not taking off at MTOW. I think it’s a good idea that Scott said we need to fully debate the techical merits of each plane, but it needs to be done in the context of the current RfP. Nowhere in the current RfP is a 7,000 ft runway takeoff specified. The current RfP uses actual runway lengths for the IFARA model from 6,000ft to 10,000ft. For this RfP in some cases the 767 will get major points because you can squeeze more into a smaller oversees tarmac. In addition you can operate a 767 below MTOW at more runways than you can an A330.

    There were many little tweaks to the previous RfP such as the 7,000 ft runway performance measurement that favored the KC-30 but simply are not included in the current RfP. The 767 for performance in ferry missions will be measured at MTOW offload for at 10,000 ft runway, not a 7,000 ft. For tatical missions the current RfP will look at Runways as short as 6,000 ft and it allow the 767 to have 10 booms vs. say 6 booms for the KC-30 if that is what can fit in the airport, and it won’t create tarmac space where non exists to accomodate the KC-30 like the previous round.

    There are advantages and disadvantages both aircraft have with regards to this current RfP for the KC-30 the advantages would likely be:

    1) Greater fuel off-load capacity utilizing a single tanker (one on one comparision) in the IFARA model.
    2) Lower development costs

    For the KC-767 major advantages will be.
    1) Lower fuel costs.
    2) Lower MILCON costs.
    3) More booms in the air for tactial scenarios in the IFARA model (5 KC-767s will beat 3 KC-30s any day of the year).
    4) An existing production factility and infrastructure so lower production related infrastructure costs.

    The big question then is can EADS submit a bid to overcome the 767’s significant advantage in lifecycle costs? Talking about cargo capicity or performance from a 7,000 ft runway is just not that relevant. Talking about performance from Midlehall could be, however, you need consider that the me be 40 percent more KC-767s operating from Mildenhall which could easily erase any advantage the KC-30 might have, with regards to the current RfP.

    • I’m still not convinced on the fuel costs.
      Most missions to be flown by the KC-X are fixed on payload – total mass to be transported or offloaded. Since you need fewer 330’s for those, the fuel burn of an appropriate sized KC45 fleet will be lower than you’d expect from looking at the diferences in fuel consumtion per hour for the 330vs767.
      Looking at the commercial world, I’d even expect an A330 to be more economic – ie have more capacity per fuel burn – than the 767. That’s why the 330 line is airbus’ cashcow and the 767 line is hardly idling along…

      Milcon costs are easily matched by the development cost of a new boom and mating the 787 digital flight deck to the 767 analog systems.

      The more booms in the air will be carrying less fuel. (it’s more like 5×767 vs 4×330)

      The production infrastructure is a toss-up. I’ve no idea how to estimate that.

      Fact remains – last time around the NG/EADS offer came in at roughly the same adjusted price as the Boeing offer… This time around Boeing is shooting for the floor in costs and it will be difficult for Airbus to match.
      I’ve read a prime can add up to 15% to a program in “management costs”. What if EADS alone can lower the price by 10% – will that be enough?

  23. Is it possible that EADS would be willing to take this ontract at NO profit.

    That is, its equally important objective is to get an operating plant in the US and I wonder how much it would be willing to pay for that objective.

    I do not understand the terms of the proposed “fixed cost” contract but , as usual, that may open the future door to more revenues.

    It seems rather risky and aggressive for EADS to use this approach especially with the finances of EADS under alot of pressure, but I just raise this as a possibilty and wonder if it is a probability

    • BA Investor, I rate the odds of a low ball bid from EADS as a virtual certainty. Profit is not their primary objective–regardless of the pious mouthings from the Enders, and his North American underlings. They are willing to pay any price to knock Boeing out of the tanker business. Do not under estimate their inclination and ability to “discount”.

      • Indeed, Airbus does not view profit as it’s main goal – it’s market share. This has been stated by Airbus officials on several occasions and is to my mind a valid approach. Maybe it’s time to change gear now they’ve gained a 50% market share and thus an American monopoly is effectively impossible, butI’m happy to leave that to the poeple with the enormous paychecks.

        Boeing knows this…

        So why did Boeing’s last bid for 767-200 derivative a/p (list price 762 176MUSD)
        As I understand, the price of the KC-X contract is about 200MUSD each. So Airbus added about 25MUSD for the extra systems, but Boeing charged a whopping 60MUSD, an 45% increase.
        It becomes even more suspect when this time around, apparently, Boeing can offer a much cheaper option.
        The requirements didn’t change, so why did Boeing charge 60MUSD a plane last time around.

        is it A) because that’s the real cost of the adaptation and Airbus was lowballing 35MUSD a plane (a total of 6BUSD for the program)
        or B) Boeing knew the costs of an 332, knew the costs to modify said a/c and matched that price, adding a cool 35MUSD (17.5%) On top of whatever profit margin was on the EADS/NG offer…

        occam’s razor

  24. “I’m still not convinced on the fuel costs.
    Most missions to be flown by the KC-X are fixed on payload – total mass to be transported or offloaded. Since you need fewer 330’s for those, the fuel burn of an appropriate sized KC45 fleet will be lower than you’d expect from looking at the diferences in fuel consumtion per hour for the 330vs767.”

    But Ikkeman, the fuel burn adjustment doesn’t consider greater offload capability. It simply consider’s four operating scenarios to develop an average fuel burn and then mulitplies the number by 489 flying hours per year, as opposed to the 750 hours used in the previous RLI. In other words the Pentagon has already said the fuel adjustment will be based on each aircraft flying the same number of hours each year as each other. I do know the curent RFI is limited to a certain amount of credit for the fuel adjustment, I just don’t know what it is.

    Anyway, this is by far the easiest number for Boeing or EADS to calculate in regards to the RFI, I would really take Boeing’s word for it that they have at least a $10 billion cost advantage here. Using Boeing’s old number’s of a 24 percent fuel burn the cost advantage was greater than $20 billion, so this will be a huge advantage for Boeing. It will likely be the single biggest adjustment made to the entire score for either contractor.

    • Yes, I know it does, and IMHO it shouldn’t. It should adjust for how many a/c are required to achieve a requirement in offload or payload-range.

      it is a big advantage in the RFP, but it is purely theoretical advantage

  25. I just wonder if EADS has the financial strength to undercut the bidding process so as to get its production foot on to American non union soil. These are very big stakes and the question is how much financial support will/can come from its European partner governments.

    This is not measured by standard cost acounting but by industrial competition. Losses can be absorbed in the short to intermediate term if the long range goal is valuable enough.

    Internally, EADS is being badly hurt and their are rumors that their A350 will have to report delays soon. The entry of China into the single aisle model is also a real threat to the aging A320 and major money maker perhaps forcing it to redesign or reengine…a costly endeavor.

    But countires and governements can be crazy too and maybe this is where they try to gain a new balance. Can they afford this ??

  26. Whether or not EADS will undercut Boeing’s bid is uncertain. The only certaintity is that given Boeing’s lifecycle cost advantage in Fuel Burn and MILCON, EADS must undercut Boeing’s offering price in order to have a shot at winning the RfP as it is currently structured. Ender’s said he wouldn’t submitt a bid just for the sake of bidding and I usually take him at his word unlike a previous chief of Airbus. I think Ender’s is just expressing the same thing most analyst and EADS itself has said which is the current RfP favors the smaller airplane. In order to make up for what the current RfP defines as an advantage the only real option EADS has is a very aggressive bid.

  27. **IMO **
    1) EADS will lowball
    2) IF they win, it will be about 2 years, during which time BA will close down 767 line. Then comes elections in U.S
    3)Then EADS will ” discover” they have some ” unanticipated problems/ costs. schedules
    4) The EU consortium will ‘ not fund the cost overruns or ante up for schedule problems
    5) they will then put into play a few escape clauses or more likely ‘ blackmail” U.S into reschedule or extra payments- OR simply say ‘ sorry’ you either take what we will provide, and our schedule or EADS will pay a minimum breach of contract $$, put the rest into courts for the next decade.

    6) U.S Airforce gets hosed again or still – and the EADS supporters will be chuckling

    7) In the U;S, those whom might say ” I told you so ‘ will probably be in office – and the ” new’ administration will be handed the whole bag of meede to figure out how to fix.

    8) The rest of the ‘ responsible ” boeing types who should have been thrown out 5 years ago will be retired with honors

    Anbd headlines will finally be talking about the ‘largest trade/ commercial screw up of the 20 and 21 st centuries.

    meanwhile, back at the rancj, EADS/Airbuss will have a faqctory established in the U.S with stimulus monies borrowed from China and to be paid back by 2nd and 3rd generations of U.S citizens.

    And the DOD will be trying to figure out who arranged the circular firing squad ..

  28. Don S,

    Thanks for the nightmere scenario…I hope it is just a bad dream

  29. For those who would like to believe my summary is a bit overly cynical, perhaps a little of my background is in order. I wish I could feel more comfortable with my nightmare version being just that- and that I’m wrong. But the pragmatic side of me has this feeling I may be right. I retired from Boeing (BA) in 1995, and for a variety of reasons kept involved in certain issues of pension and union support. To that end, I worked with an excellent mentor with a unique background. he was at the 1992 GATT round regarding aerospace subsidies, had been a civilian- engineering – representative to the several secretaries of Defense starting with Dave Packard and remained in that position thru the Regan administration. He was retired Airforce- and had flown and delivered many of the Kc135 tankers . . . or as he told Rudy de leon in early 2002 art a meeting in whcih I was present . Rudy, I was delivering tankers when you were in knee pants, and I’ve probably been in more high level briefings with your Previous bosses than you have !. [ rudy had hired into boeing in July 2001 after previously serving a assist/deputy sec defense . .]

    With that a a partial background – regarding WTO and Tanker issues, the following copy of an old email might help to set the scene.
    NOTE the DATE !

    I had asked Allan whyy Boeing had stifled SPEEA ( union ) from filing a Countervailing Duties petition (CVD ) early in 2002 . . .

    Subject: Fwd: RE: RE: Question for Aug 23 Town Hall Meeting
    From: “Piasecki, Nicole W” <nicole.w.piase—-ng.com
    To: "'Donald Shuper'" —
    Cc: "Mulally, Alan" <alan.mula–om
    Subject: RE: RE: Question for Aug 23 Town Hall Meeting
    Date: Thu, 7 Nov 2002 18:53:17 -0800

    Don,

    Our strategy is to help the ailing airline industry become healthy and
    profitable again so that we can stimulate demand for new Boeing aircraft.
    Because most of the US airlines operate a mixed fleet of Boeing and Airbus
    products, a Countervailing Duty (CVD) or Antidumping tariff would result in
    further negative impact to our own customers who fly Boeing aircraft as well
    as Airbus. We believe this puts Boeing at higher risk for additional
    cancellation of Boeing aircraft deliveries than we already experiencing from
    a very fragile marketplace. And unprofitable airlines do not order
    aircraft. To that end we advised SPEEA that filing a case at that time was
    not in the best interest of the Boeing Company nor the aviation industry.

    Having said that, it is our obligation to ensure Boeing's overall
    competitiveness. We are committed to achieving a rules-based trade system
    with the Europeans that does not advantage them and are taking necessary
    actions to achieve this. It is unacceptable that Airbus, who will likely be
    the industry leader in deliveries next year, is receiving government support
    of up to 33% to develop a new aircraft that is not otherwise commercially
    viable.

    For your information, Mr Rudy de Leon will visit Seattle on November 18th to
    discuss this topic further with SPEEA.

    Nicole

    Nicole Piasecki
    Boeing Commercial Airplane
    +++++++
    Now about my candidate for
    DOD initiator of the circular firing squad – I nominate — Mr Rudy De leon !

    More later if people are interested . .

  30. RE and earlier post by Ov-099 ” That means that the KC-30 can take off with more fuel from a real world tanker base. From Mildenhall or Brize, for example, a KC-30 can take off with 111 tonnes of fuel. A KC-767AT would have to unload some 12-15 tonnes of its smaller load (92 tonnes would be reduced to 77-80 tonnes).”

    +++

    Seems to me a more realistic evaluation would be related to the ratio between MTOW and Max landing weight. Or in other words, using the max takeoff weight as a major criteria,- how much ” gas” MUST BE OFFLOADED before the tanker can land. I seem to recall somewhere that the current Kc-135s used in gulf one and perhaps in Iraq had to dump a lot of fuel before landing if they did not offload thru refueling enough. And that this was a significant amount of fuel overall.

    IF that is a most probable scenario re number of booms and drouges in the air for the required redundancy, it would seem to me that ‘ fill it up to the brim ‘ for each mission might NEGATE THE SO CALLED ADVANTAGE of the EADS tanker ??

    Anyone got some better details ? I suspect that somewhere in the non- public portions of the RFP, there may be some sort of related adjustments ?

    flying a 18 wheeler tanker to the refueling store and having to drain a half tank of gas to land would seem to be a negative ??

    Any facts from the so called experts ??

    Source ??

    • source: airport planning document publicly available from both manufs
      Depending on the precise type, 332 needs to dump between 24 and 125klbs
      Depending on the precise type, 762er needs to dump between 57 and 102klbs

      Ofcourse this point is mute since both models will be able accept refueling in-flight. So when you send the replacement, but the one on station still has much fuel left, you can send the replacement with room accept the extra fuel.

  31. In response to comments (and others) on my “size matters” advantage to the KC-767 post, let me first state that my view is not an engineers view of the various attributes of both aircraft competing in this RFP. Rather my view is as a USAF employer of air refueling assets to the requirements of the war fighters. (I have no say in the selection – I’m just giving my $0.02). There are some important points that many of you posting on this board don’t understand about the air refueling business, and may not understand the way the USAF chooses to do business. Some of you think the USAF could change their ways to take advantage of your chosen aircraft “superior capabilities”, but I don’t think that is likely in practice.
    For example:
    – Surely the KC-30 can carry more fuel per aircraft than the KC-767. But If I have limited ramp space – as I always will when deployed overseas for contingency operations, I can fit more 767’s than 330’s. The more airframes I have on my ramp, the more booms I can put in the air, the more airspace we can cover with; AWACS, Joint-Stars, B-1’s, RC-135s, and all the small pointy aircraft. (no offense to aircraft I didn’t mention) Because a tanker can’t be in more than one place at a time, and the receiver aircraft can’t use much of their precious fuel to get in line for gas by coming half way across the AOR to the tanker, booms in the air is VERY IMPORTANT. I can make up for the smaller fuel capacity of the 767 (vs 330) by using another tanker (preferable a larger one like a KC-10) to keep the smaller ones on station by their own air-refueling capability – required by the RFP. (Note: someone suggested a KC-737, but the USAF has previously dismissed that idea of a small, medium, and large tanker fleets in favor of just two fleets with fuel capabilities in the range of what they current have).
    – The idea of just making the ramp bigger is not practical on borrowed airfields. One, the host nation may not allow it, they may make it cost prohibitive, and it just takes too long. Also, the USAF likes economy of scale when it comes to basing. Fewer big air bases are better than many small ones just because of the logistics and security needs involved with an overseas base during wartime. To the doubters of how many tankers will the USAF put on a single ramp overseas for a contingency operation, you are wrong….that’s all I’m willing to say.
    – Parking is a real issue and a limiting factor in operations. As I said before, their will be times when you have to have all your aircraft on the ground so you need parking for all of them. The USAF wants/needs aircraft to be able to get into and out of parking under their own power to maintain operational flexibility and responsiveness. So that means a taxi row in front of and behind each parking row. How wide does the ramp taxit row need to be between parking rows? A: at least as wide as the wingspan of the aircraft with the widest wingspan in that row. Because the aircraft taxi under their own power, the parking space has a 25 foot buffer on each side, in front, and behind it. So on a ramp with 3 rows of parking, you will have 4 taxi rows, 6 will have 7, 7 will have 8 and so on. A row of 767’s and just one taxi row will be 135% of a row of the same number of 135’s. A row of the same number of 330’s will be 204% of a row of 135’s. That is how I view for a given ramp, I will be lucky if I can get half the number of 330’s as 135’s. The advantage goes to the KC-767 – which can do all a 135 can plus some more due to its lower fuel burn and ability to be refueled in air and do both boom and drogue on the same mission. (Yes, the 330 can do all a 767 can and more, but I’ll have many fewer of them available to me – remember it is booms in the air that is most important – and a tanker can’t be in more than one place at a time.) BTW, a row of KC-10’s is 156% of a row of KC-135s (same number of aircraft). I fail to see how the 330 is better than the 10 as someone asserted.
    – Many airliners are compared by evaluating “seat miles”. That is a meaningless measure to a tanker in my opinion, and why I said the USAF doesn’t need an airliner. I think a more appropriate but just as simple metric could be pounds of fuel per square foot of parking. The engineers on this site have to overlook fuel burn, and that is a factor, but it is interesting to compare the #’s/sqft. Using just a 25 foot buffer around the aircraft (ignoring space needed to taxi in/out) and max fuel capacity at MTOW here’s the numbers for the 135/767/330/10 6.89/5.49/4.62/8.08 (using open source data) Clearly there are compromises using modern airliners to do tanker work. The efficiency airlines seek in an aircraft, hurt its abilities in my opinion as a tanker in war time. Those efficiencies can be helpful when ferrying troops or fighters across the pond, but those missions (in terms of frequency) pale in comparison to the classic wartime refueling missions where all you are carrying is fuel.

    The rabid 330 proponents on this site will likely not agree with my perspective, but I believe that they just won’t conceded to the operational aspects of the air refueling business which cannot take advantage of the advantages they see in the 330 over the 767 as a basic aircraft (both designed primarily as passenger airliners). Maybe EADS would have been better suited bringing back the A-300 – size wise it would have been a better fit in my opinion to replace the KC-135 as opposed to the A-330.

    • Where’d you get your numbers?
      type – W [ft] – L [ft] – A [ft2 + 50ft] – max fuel [klbs] – lb/ft2
      kc10A – 165’4.5″ – 181’7″ – 49877 – 356 – 7.14
      kc135R – 130’10” – 136’3″ – 33680 – 200 – 5.94
      762er – 158’1″ – 159’2″ – 43524 – 200 – 4.60
      330mrtt – 192.91′ – 197.83′ – 60202′ – 245 – 4.07

      So yes, the 767 is better in this metric. However, what happens when the USAF does intend to change some of it’s SOP’s.
      One large advantage both the 767 and 330 have over the -10 and -135 is fuel efficiency in the air.
      looking at Sect L, Atch 4 – Requirements Prioritization 24 Feb 10.pdf of the fRFP, any platform fulfilling the maximum offload requested (330) can offload tha same amount of fuel as the a/c meeting the minimum mandatory requirement (767) at about a 1000 extra nautical miles…

      That is, the 330 can be based 1000 nm farther away from the refuel point than the 767. How much more ramp space can you find in a 1000nm. What benefit could you reap from freeing up ramp space near theatre?
      how many more booms in the air from a 1000nm farther.

      Don’t forget that any current procedures are constrained by the limitations of an 50y/o design… There’s been some progress. It is true that the 767 is a much better fit for a one-on-one replacement of -135. It seems designed specifically for it, and the current RFP seems to request specifically that – a replacement.
      However, it is called a fleet modernisation program.
      I think the 330 would better serve to modernise the fleet where the 767 is a better fit for replacement.

  32. Ikkeman,

    The above exchange with Gaspasser is quite intriguing. Maybe your last paragraph where you say “I think the 330 would better serve to modernize the fleet where the 767 is a better fit for replacement” is key to the changes in the RFP and is the outcome of a major decision…influenced by choice, budget, politics, etc.

    Was there a determination made within DOD, USAF and the Secretary of Defense that the Tanker contest was intended to be for a replacement model only and not part of a fleet modernization program. That is, there may be a continuous need to modernize the fleet but there are priorities and the modernization aspect with its budget requirements did not extend into this RFP.

    That is where the central decision making occurred. The choice between planes became a choice beyond the requirements. It was an approach to a larger picture and that choice has been made purposely limited by specifying a replacement model only

    • I agree – it may be a conscious choice of the AF, and it ofcourse has the absolute right to determine it’s requirements however it may want to – but it does beg some questions when you make a decision not to modernize but to replace a 50y/o platform…

  33. I am not sure this is relevant but there has been no mention of the Joint Strike Force model and the impact of such a huge modernization of the Air Force coordination with the other branches.

    In the politics of the DOD, was this enough to fill ones plate and additional “modernization” would be too demanding. That is, priorities and preferences have played a role in this choice. That is certainly something that would be understandable and plausible.

    There are always forces pushing to “modernize” but it is does not always come at a propitious time.

  34. Ikkeman,

    Why does the Air Force have to explain how and why it comes to a conclusion that is expressed by the Secretary of Defense and resulted from internal study, evaluation and much discussion. Somehow or other, it concluded, as clearly spelled out in the RFP, what it needed and what requirements were to be met.

    The issue of modernization was part of that discussion. I imagine the Air Force is always trying to modernize.

    The choice does not beg any questions. It answers the questions that were implicit in the approach to begin with…especially after ten years of debate!

    You describe the present platform as a 50 year old system and if the A330 will bring things to a higher efficiency. I am sure all the attributes and efficiencies were evaluated and weighed. The last RFP was the considered response. I would imagine they knew what they were doing

    • “Why does the Air Force have to explain how and why it comes to a conclusion that is expressed by the Secretary of Defense and resulted from internal study, evaluation and much discussion.”

      They don’t. But:
      Second guessing god has high intellectual esteem
      Second guessing lesser gods can’t be worthless then 😉
      That said, the evolution of the requested product over time is certainly interesting, to put it midly.

      Some of todays posting in the active topics certainly
      brought some real (tasty, mhh) beef into the discussion. thank you very much.

    • Because they propose spending 35BUSD now and up to 100BUSD including the follow-on contracts. excluding MRO costs.
      Because less than 2 years ago it seems their priorities were diametrically opposed to those expressed in the current RFP.
      Because the current RFP so thoroughly favours the offering of the losing party for the last two attempts at filling this requirement.
      Because last time I checked the US was a democracy and in such a system thoose spending public money are required to explain their actions to those paying taxes.
      Because teh USAF has failed to correctly and fairly run this competition two times now, why should the third time be the one out?

  35. **IMO** One thing the Airforce/Military needs is near absolute reliability. Both the A330 and the 767 Commercial versions have been flying for decades, with the 767 having about one decade more than the A330 in commerical service. Both airframes have met the ETOPS requirements, and one could argue there have been more ETOPS flights with a 767 than with a 330. Thus the airframe/engine packages both have a well proven design and known fatigue and overhaul records.

    As far as flight controls, I’ve previously mentioned the philosophical differences between BA and Airbus – and IMO – military pilots probably prefer the BA approach wherin the computer is an assistant rather than an ovderarcing authority- and the pilot in a BA ALWAYS- REPEAT ALWAYS has the ‘ last word ”

    Given my above comments, I fail to understand why the ‘ bitch’ about ‘ modern design’, newer design, etc of the A330 versus the 767 variations.

    Both would start out with newly manufactured airframes, advantages of years of service regarding corrosion and changes in material etc developed over the years with literally millions of flight and service hours.

    Given the 400 to 700 hours of service per year range specified, and a currently known 20,000 to 40,000 hour airframe life/cycle time, a 40 year military service life with few or at least known maintenance issues can be expected for either plane. I have heard of unverified reports of comparitive ( to 767 ) higher/costlier maintainance issues on the A330 .

    Thus – **IMO** despite all the arguments and BS and PR, it still comes down to the lowest long term costs as a function of gas milage, MILCON, flexibility in dispersal, cost of x booms in the air in a given theater(s) of operations, etc.

    even so MY question remains … why should the U.S taxpayer pay to establish a airbus factory in the U.S, which would also allow airbus to escape a lot of VAT issues in addition to government subsidies to compete with a private industry by allowing or falling for the expected lowball bid by EADS ?

    • VAT issues? Please explain.

      It is also interesting to note that it is now ‘expected’ that EADS will lowball the bid. Expected by who, other than partial observers not bent towards a liking of EADS? 😉

      As to why US taxpayers should consider this, because it would bring in jobs and tax revenues that would otherwise not go to the US. The A330F has no competing product currrently produced (or indeed planned to be produced) in the US. It is designed as a replacement for an out-of-production airframe. So there is little to no net loss for the US taxpayer to have this plane produced in the US on this side. Granted, Boeing would presumably have to close the 767 line, but if they keep it open it’ll be reduced to churning out tankers with the odd freighter. So on balance for the US economy an A330F factory churning out tankers AND considerable numbers of civilian freighters appears to be more profitable to me.

      • To give the idea:

        B767-300F – 85 orders in 17 years, 29 undelivered
        A330-200F – 66 orders in 3 years, 66 undelivered

        I know which product I’d rather have produced on my doorstep.

        Data from Boeing/Airbus websites.

    • Because the only way to stay ahead in the world is to accept the best from others and make it your own. You do it in school, where you accept the wisdom from others, make it your own and then profit by it. Compare aerospace (imported from the germans and english after WWII), The Computer business (how many expats work at Microsoft/Google) to Car manufactoring (high import duties and “buy american” mentality).

      Because opening your borders is the only way to get ahead and closing your borders is a sure way to self destruction.

      Because Boeing is so busy exporting all their workshare it’s a good plan to try and get some aerospace work back from abroad

  36. re VAT – suggest you look up subject in wikipedia and then consider the following :

    European industries can get VAT
    tax back on goods they sell outside the EU. This provision for VAT was grand-fathered
    into WTO agreements in the 1980’s.

    IOW , EADS gets at least a twofer on certain tax issues, and perehaps even a three fer

    1) They get/got subsidies in excess of the GATT92/94/WTO figure of 33 percent allowed- se WTO ruling- its just that at the moment we do not know how much

    2) All parts and assemblies/subassemblies made in EU ( wings in britian for example ) acquire little VAT taxes at every step. But if ‘ sold’ outside the EU for example, they get those internally refunded. However they become a real cost to the U.S taxpayer

    3) Normally, Aibus airplanes delivered in the u.S
    come in duty free, unless a case of dumping or countervailing duties can be established – sort of like the WTO issues- but not exactly.

    So after we borrow money from China, to pay to EU/EADS consortium for military airplanes ( which are NOT subject to WTO rules ), Airbus gets to establish a commercial production line, train employees, etc for FUTURE versions of an A330 or if you prefer an a3xxx to compete with BA.

    its sort of like ford paying out extra monies to help fund a new – updated “” government motors”” to compete with them in their home market.

    • Your reasoning in no 2 reads quite strange.

      VAT is a consumer tax. It is a bookkeeping duty for the government
      every company has to do. In every step the “value added” is accounted for.
      Inside Europe the VAT from a plane sale is the differential VAT on
      private PAX tickets payments versus all cost of an airline.

      MY first impression is that you have not understood VAT.
      It is not a sales tax.
      “However they become a real cost to the U.S taxpayer”

      If you can explain that in a factual way I would .be quite surprised.

      Some time ago I read about how Boeing handles taxes:
      http://seattletimes.nwsource.com/cgi-bin/PrintStory.pl?document_id=2010867188&zsection_id=2003907475&slug=sundaybuzz24&date=20100123

    • Sorry, if the VAT is zero-rated at export, what is the advantage of going to a non-VAT production location? How (presuming there is no pricing power, e.g. a monopoly), does reimbursed VAT become a ‘real cost’ to the customer purchasing the product outside the EU? If competition works, the producer will not include the VAT in the price charged, since they’ll already get it back from the tax man.

      A quick read here should be helpful:

      http://ec.europa.eu/taxation_customs/taxation/vat/how_vat_works/index_en.htm

      So I can not see how there is a VAT issue. Yes, Boeing has to pay import taxes on planes sold in the EU (or rather, its customers have to, since Boeing is not likely to suck up the cost), but Airbus customers in the EU, being end users, have to pay VAT to Airbus. So no competitive advantage there. When Airbus exports to the US they get all the VAT back, putting them in the same position as Boeing.

      What am I not getting?

      In conclusion, to me it seems your points 2) and 3) are rather irrelevant to your argument.

      Your point 1) is unproven.

      And let me ask again, what is so bad about Airbus using US tax money to train US citizens how to build great planes, in the process providing tax revenue for the US government, employment, and economic growth? It doesn’t sound terrible to me. I can see why Boeing doesn’t like it, but last I checked what’s good for Boeing was not automatically good for the US (the 787 production system comes to mind 😉 )

  37. The USAF RFP’s for a plane with specific qualities and competitors and their advocates complain that the request is not modern enough, will not produce enough jobs in the US and is protectionist against non USA competition.

    It sounds like the USAF has to consult with foreign manufacturers before it should draft its RFP’s.

    There is something wrong here. The cart is in front of the horse

    • I think the USAF should do what is best for the soldiers, and that means best for its operations. I have no idea whether the KC767 or the KC-30 is the better answer to this question. What I do suspect however is that Congress is not the place to go to in order to find this answer.

      I also think it is wholly unfair to single out ‘foreign manufacturers’ when complaining about the lobbying BS going on. Boeing has proven itself quite adept at this game, better in fact than it is at building tankers, and the same applies to Airbus.

      Reading some of the stuff here, it sounds like the USAF has to consult with domestic manufacturers before it should draft its RFP’s.

      There is something wrong here. The cart is in front of the horse.

  38. Groooannn …..

    http://www.worldtradelaw.net/uragreements/civilaircraft.pdf

    Article 2
    Customs Duties and Other Charges
    2.1 Signatories agree:
    2.1.1 to eliminate by 1 January 1980, or by the date of entry into force of this
    Agreement, all customs duties and other charges1 of any kind levied on, or in
    connection with, the importation of products, classified for customs purposes
    under their respective tariff headings listed in the Annex, if such products are
    for use in a civil aircraft and incorporation therein, in the course of its
    manufacture, repair, maintenance, rebuilding, modification or conversion;

    ++ THE ABOVE IS FROM THE 1980’S VERSION GATT URUQAY ROUND +++

    NOW FROM

    http://www.defense-aerospace.com/article-view/verbatim/46622/eu,-us-make-their-wto-cases-on-subsidies.html

    Since 1985, the United States has been involved in several major rounds of negotiations with the Airbus partner governments and the Commission with the objective of achieving greater disciplines over the subsidies provided to Airbus. In 1989 and 1991 the United States brought two cases at the GATT challenging Airbus subsidies. The first case challenged a German program that offset adverse exchange rate fluctuations on sales of Airbus aircraft, and the second, broader case challenged overall subsidies to the Airbus consortium. The first case ended in a victory for the United States after a GATT panel determined that the exchange rate scheme constituted a prohibited export subsidy. The EC blocked adoption of the panel report, which was permitted before the creation of the WTO, but Germany subsequently withdrew the scheme.

    The United States withdrew the second case in July 1992 after the two sides negotiated a bilateral agreement limiting government support for large civil aircraft programs. The agreement included a prohibition of future production support and a limitation on the share of government support for the development of new aircraft programs to 33 percent of the project’s total development costs.

    ++++

    In 1997, the EC conditioned approval of the merger of Boeing and McDonnell Douglas on a commitment by Boeing to license to Airbus any “government-funded patent” that could be used in the manufacture or sale of large civil aircraft. Airbus has no similar commitment to share the fruits of government-funded technology with Boeing. The United States has sought to include a mutual commitment of this kind in a new bilateral agreement.

    +++ EXAMPLE NACA/NASA WINGLETS _ used by airbus. NOT the same as the aeropartners version now being tested by airbus . .

    +++

    the closest I can get to the actual agreement is
    http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:31992D0496:EN:NOT

    ++

    Now lets take a simple example. IF i go to an EU country and buy a EU made – “dishwasher “- to take home – I can file for a refund of the EU VAT that I paid as part of the sales price. But, depending on item time out of U.S ,etc I will pay a U.S duty ( unless its art )

    And if I buy that same dishwasher in the U.S, while the EU VAT and possibly a duty is included in the price, I do not get a refund, but I will also pay some sort of sales tax… be it federal or state or both ( currently a state tax )

    So I get hit double !

    BTW _ I never said VAT was a sales tax

    On LCA – the price in the U.S does not include duty , etc

    Does this help ?

  39. I honestly think that the present situation can only be good two both interested parties, ie Boeing and EADS. Before certain crowd jumps on me, I will say that Boeing will win this round.

    What will Boeing get?
    1. The contract to supply the tankers, which will secure the 767 line for many years to come.
    2. They ill keep out EADS/Airbus out of their home turf.

    What will EADS get?
    1. They make USAF look good. Look how many times the AF came out to say, ‘we value the EADS participation’, ‘we want all eligible bidders to bid’… This will show that the AF values other companies’ bids, hence increase EADS standing within Pentagon.
    2. EADS will also ensure that although they will lose, they will be able to squeeze Boeing on margins big time. So although the line will be open, revenue will not be significant, at least not as significant if EADS stayed away.

    What will the AF get?
    1. A plane, for a start!
    2. They will ensure that politically it is the most acceptable solution, the last thing they want is a ‘war’, as Aurora said.
    3. They will get a good price for the tax payer.

    So from my point of view, it is a win/win situation for all. Of course between now and the eventual outcome stand by for anti EU, EADS rhetoric, Dicks in the newspapers at every opportunity and ‘freedom’ fries on the menu for at least a year.

  40. No, you are still not getting the concept of zero-rating and the effects of competition.

    If the manufacturer can reclaim the VAT from the tax man (thereby lowering his price and making his product more competitive), why would he, in a competitive market, include it in the price to the end consumer (increasing purely his profit margin and thereby making the product less competitive)? The double hit would only occur if the manufacturer has pricing power in the market. We know this will not be the case for this competition. It maybe the case for A330F competitions, but we don’t know that yet.

    In the US, you pay a sales tax depending on the state you are in. If the item is imported, you also pay import duty. But you do not pay the European manufacturer’s VAT as a matter of course because he can reclaim it from his tax authorities. In Europe, you either pay VAT at the rate of the country you purchase in, or you pay import duty at the VAT rate of the country you are in. For Airbus, making a sale to a US customer, the only thing that the US customer has to pay is US import duty (no US state sales tax should apply, since the sale was either in France or Germany, depending on the model). If the sale is made from Alabama, only Alabama sales tax will apply, unless excempted. No French or German VAT will be charged (since the components have been zero-rated on export from Europe to Alabama), and no US import duty, at least on the final product (maybe on the components, but I doubt that). Seems like state sales tax is 4%. For Boeing, making a sale to a US customer, presumably Washington state sales tax of 6.5% applies. No idea if city/county taxes would apply. A Boeing sale to an EU customer is subject to import duty at the rate of the country of the customer when the customer flies the plane into Europe for the first time. The same would apply to an A330F sale if it were produced in Mobile. Although Airbus could of course choose to deliver from their centres in Hamburg or Toulouse, and then VAT of Germany or France would apply.

    Let me know where I am wrong.

    In the meantime, I’ll wait for proof of 33% subsidies to Airbus, and of EADS lowballing its bid.

    As for the agreement, you mean this:

    http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:21992A1017%2801%29:EN:HTML

    As for the merger decision, you mean this:

    http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:31997D0816:EN:HTML

    There are solid reasons for this decision, relating to the expected dominance of a merged Boeing/MDD corporation, and the document outlines them. So, how often has Airbus licensed Boeing technology then? In other words, how much of an issue is this, in reality?

  41. Uhhhh . .. “For Airbus, making a sale to a US customer, the only thing that the US customer has to pay is US import duty ”

    ++++++

    CURRENTLY THERE IS AND HAS BEEN NO IMPORT DUTY ASSIGNED BY THE U.S TO AIRBUS OR ANY OTHER LARGE CIVIL AIRCRAFT ( => 100 PASSENGERS )

    However, an import certificate for each aircraft must be filed with with U.S customs. It generally includes so called sales price and appropriate /related tax documents and waivers, point of origin, etc, etc.

    Had you bothered to read the gatt agreement – or even the extract I first made, that would be obvious.

    Try this form a fuller explanation
    http://www.trade.gov/static/aero_rpt_jet_transport.pdf

    go to page 88
    1992 U.S.–EU Agreement on Trade in Large Civil Aircraft
    After the United States successfully challenged a German exchange rate subsidy scheme at the
    GATT and then filed a broader case against EU subsidies to Airbus, the United States and the
    EU entered into the 1992 bilateral U.S.–EU Agreement on Trade in Large Civil Aircraft (1992
    Agreement).138 Among other things, this agreement attempted to give greater clarity to
    obligations in the ATCA regarding “unreasonable pressure”. Key provisions of the bilateral
    agreement included:
    • Prohibition on support for the manufacturing, marketing and/or sales of aircraft (i.e.
    production support).
    • Strict terms and conditions set on new “direct” development supports, including a “cap”
    of 33 percent of total development costs and specific repayment terms, with a
    requirement that a “critical project appraisal” be completed to demonstrate the
    commercial viability of the resulting aircraft under development.
    • Discipline on “indirect support,” including a “cap” on identifiable benefits to commercial
    aircraft programs of government research and development funding.139
    • Explicit terms and disciplines on existing financial supports, allowing no modifications in
    existing programs.
    • Clarification of disciplines on government intervention in aircraft marketing or
    procurement decisions.

    +++++

    granted some of the comments in this doc may be biased, but I doubt ANY reader of this board would want to argue with the numbers . .

    +++++
    page 89

    The 1994 WTO Agreement on Subsidies and Countervailing Measures (ASCM), while not
    specific to aerospace, applies in full to civil aircraft subsidies. All members of the WTO are
    bound by the ASCM. Among the key provisions of the ASCM relevant to civil aircraft subsidies
    are:
    • Definition of a subsidy–defines “subsidy” as a financial contribution that confers a
    benefit on the recipient.
    • Prohibited subsidies–prohibits subsidies that are contingent upon exporting the final
    product or upon the use of domestic over imported goods. It is not necessary for a
    complainant challenging a prohibited subsidy to demonstrate that the subsidy has adverse
    trade effects.
    • Actionable subsidies–subsidies that do not fall within a prohibited category are
    nevertheless actionable if they cause adverse effects (e.g. material injury or “serious
    prejudice”) to the interests of another WTO member.

    ++++

    Now about countervailing duties CVD

    For the better part of two years – 2000-2001-early 2002 , I did many hours of research on the issue in preparation for filing a CVD petition- which is SIMILAR TO but NOT the same as dumping . . .
    and that included a chat via phone with several members of the DOC including the General counsel – as to the requirements for filing, the data needed, and what was or was not available via FOIA . .

    The above does NOT make me an expert on the issues- but definitely more attuned than most . .

    For example – this extract may help to show some of my then sources

    This extract is intended to show some of the background information used for the
    Countervailing Duties petition in more detail than is necessary for filing.
    All prices and average cost data by model are based on publicly available information from
    Boeing and Airbus.
    Comparisons of productivity and labor rates are those done by AECMA, the EU equivalent of
    the AIA ( Aircraft Industries Association ) for example :
    http://www.aecma.org/
    http://www.aecma.org/meta_stats.htm
    http://www.aecma.org/Stats/Stat1999.pdf
    http://www.aecma.org/Stats/Stat1998.pdf
    http://www.aecma.org/Stats/Stat1997.pdf
    OTHER INFORMATION SOURCES INCLUDE :
    http://www.finance.eads.net/erappo.html
    http://www.speednews.com/
    http://www2.airbus.com/home.asp
    http://www.boeing.com/commercial/prices/index.html
    Yearly and Total averages are weighted by delivered quantities of equivalent models
    Equivalent model comparisons between Boeing and Airbus are based on a Boeing News
    article published June 14 -21 -2001.
    Models 747 and 757 deliveries were excluded from all comparisons, since there are no ‘
    equivalent’ Airbus models. In some cases, certain models have also been excluded for the
    same reasons.
    ” 40 Percent of Airbus made in U.S.”
    http://www2.airbus.com/media/media.asp July 2001
    “ . . . . Today Airbus spends more than $5 billion annually with American suppliers to its wide
    range of aircraft models. Up to 40 percent of an Airbus aircraft is made of components
    produced by several hundred American companies, McArtor said.“ [ Allan McArtor is Chairman
    of Airbus North America.]

    ++++

    more later

    • Hi Don,
      don’t sidetrack. you still have to make a coherent argument for
      your VAT allegation.

      US duty or not: Howevver it is handled it remains a US controlled issue.

      Additionally you are arguing from a position that demands that
      US views on trade have to be universally accepted by every other
      nation.
      In contrast most other nations put up high barriers against being
      ripped off ( and destroyed ) as a working society.
      The growing rift in the US society and the resulting loss of capability is
      imho due to the unmoderated (pseudo) capitalism at work there.

      Your latest post:
      If my guess is correct there should be quite a lot of behind the curtains
      exchange in patents (or condoned usage) between Boeing and Airbus.
      Unfortunately no data available.
      Now winglets have an interesting history. The concept is
      old enough that basic patents all have run out.( think Henschel Ears )

      Who actually holds the patents (if any) on the Airbus wingtip fences (a310-300)
      and the non aftermarket wingtip devices on recent Airbus craft ?

      Even Boeing advertising design details as world first does not mean much:
      Ultra innovative cabin altitude on the 787 : 6000′ ( a380 : 5000′ 😉

    • So there is no duty. So, we come back to what the VAT issue is you keep going on about. What is Airbus advantage of producing the A330F in the US, regarding to VAT? I think we can agree that CVD have nothing to do with VAT, right?

      As for the 33%, I’ll leave it at my previous view that there is no proof that Airbus received a 33% subsidy to produce a commercially otherwise not viable plane. As an aside: snicker, the A330 not commercially viable, dear Nicole should try stand-up comedy.

      • lets try again re VAT

        Currently in the U.S – today- we have no VAT. we do have local and federal tax equivalents. Most EU countries involved have a VAT instead of certain sales taxes and fed taxes. ( US may wind up having both- but thats a different story ) Just as EU gets a rebate on VAT, so does – sometimes- BA get reduced ‘ sales’ or B&O business and Occupation taxes-

        But it is really not a push when it comes to how the ( EU feds and the US feds ) ‘ ” tax” rebates are handled and how they affect the economy .

        As to CVD – yes it does apply – it is a U.S method for ‘ leveling the field’ so to speak, and works similary- but for different reasons than a dumping issue.-

        Go to go now – back later

  42. A bit more on the duties issues

    Here is an old- but excellent summary of what countervailing duties are

    Ill follow this with some co0mments regarding airbus/eads use of a boeing deveveloped manufacturing process with which I am VERY familiar

    +++
    ountervailing Duties What Are They?

    In today’s global marketplace, the lack of a level playing field can make it difficult for American businesses to compete. Unfair foreign pricing and government subsidies distort the free flow of goods and adversely affect American business. Import Administration, within the International Trade Administration of the Department of Commerce, enforces laws and international agreements to protect U.S. businesses from unfair competition within the U.S. resulting from unfair pricing by foreign companies and trade distorting subsidies to foreign companies by their governments.
    This article provides a brief overview of how Import Administration provides a way for firms to seek relief from unfairly traded imports by filing a petition seeking the imposition of countervailing duties on imports of the unfairly traded merchandise. Countervailing duties offset the effect of unfair subsidies. Countervailing duty trade remedies have been successfully pursued by a variety of domestic industries, including producers of steel, industrial equipment, computer chips, agricultural products, textiles, chemicals, and consumer products.

    What is a Countervailable Subsidy?
    Foreign governments subsidize industries when they provide financial assistance to benefit the production, manufacture or exportation of goods. Subsidies can take many forms, such as direct cash payments, credits against taxes, and loans at terms that do not reflect market conditions. The amount of subsidies the foreign producer receives from the government is the basis for the rate by which the subsidy is offset, or “countervailed,” through higher import duties. While governments can take many actions which could be said to confer benefits on their producers, not all of these actions are viewed as countervailable subsidies. Generally, the benefit must be limited to a specific group of firms or industries or to a firm’s export activities in order to be a countervailable subsidy. The U.S. statute and regulations establish standards for determining when an unfair subsidy has been conferred.

    How is Subsidization Remedied?
    If a U.S. industry believes that it is being injured by unfair competition through subsidization of a foreign product, it may request the imposition of countervailing duties by filing a petition with both Import Administration and the United States International Trade Commission (ITC). While Import Administration determines whether and to what extent unfair subsidization is occurring, the ITC determines whether the domestic industry is suffering material injury as a result of the imports of the subsidized products. The ITC considers all relevant economic factors, including the domestic industry’s output, sales, market share, employment, and profits. Both the ITC and Commerce must make affirmative preliminary determinations for an investigation to go forward.

    How Long Does it Take for Countervailing Duty Orders to be Issued?

    The investigation begun by a petition proceeds as follows. Import Administration will review the petition and determine within 20 days of the date of filing whether the petition meets the statutory requirements for initiating an investigation. If the petition is accepted, within 45 days of the date the petition was filed the ITC will make a preliminary determination of whether there is a reasonable indication that the domestic industry is injured or threatened with injury by reason of unfairly traded imports. If the ITC believes there is no indication of injury, the investigation is terminated. If the ITC’s preliminary determination is affirmative, Import Administration will make its preliminary determination of whether unfair subsidization is occurring by analyzing sales information provided by foreign producers and exporters in response to detailed questionnaires that Import Administration sends to them.

    If both the ITC and IA make affirmative preliminary determinations (within 190 days of an initiation of the antidumping investigation, or 130 days for a countervailing duty investigation) importers are required to post a bond or cash deposit with the U.S. Customs Service to cover an estimated amount of duties which will be collected if a countervailing duty order is issued upon the completion of the investigation.
    After the preliminary determination, the investigation proceeds with on-site verification of the data submitted by the foreign party doing the subsidizing. A final determination is announced within 75 days of the preliminary ruling. If the finding is negative the investigation is terminated. If it is affirmative, the investigation continues. The ITC typically makes its final determination on injury within 45 days of Import Administration’s final ruling. Typically, the final phases of the investigations by Import Administration and the International Trade Commission are completed within 12 to 18 months of initiation.

    What Relief is the End Result of a Countervailing Duty Investigation?
    If both Import Administration and the ITC make affirmative findings of injury, Import Administration instructs the U.S. Customs Service to assess duties against imports of that product into the United States. The duties are assessed as a percentage of the value of the imports and are equivalent to the subsidy margins, described above. For example, if Commerce finds a subsidy margin of 25%, the U.S. Customs Service will collect a 25% duty on the product at the time of importation into the United States in order to offset the amount of subsidization.

    How Are Subsidy Rates Calculated?
    Subsidy margins are calculated using information collected from the foreign producers and exporters of the subject merchandise. Subsidy rates are calculated by determining the value of the benefit provided by subsidies for the manufacture or export of the subject merchandise. Import Administration calculates the value of the benefits on a company-specific basis using the information obtained from the companies and the government in response to Import Administration’s questionnaires and from other sources. Subsidy rates may also be revised in an annual review process.

    What are the Requirements for Filing a Countervailing Duty Petition?
    Petitions may be filed by a domestic interested party, including a manufacturer or a union within the domestic industry producing the product which competes with the imports to be investigated. To ensure there is sufficient support by domestic industry for the investigation, the law requires that the petitioners must represent at least 25% of the domestic production of the product that competes with the imports to be investigated. The statute requires the petition to contain certain information, including data about conditions of the U.S. market and the domestic industry, as well as evidence of dumping or unfair subsidization.
    ========
    The Import Administration Can Seek Relief for U.S. Firms from Unfairly Traded Imports
    (First Published in Business America, August 1998)By Andrew Stephens, Office of Policy Import Administration and Lauren Baker Office of Public Affairs, International Trade Administration Additional information can also be found at the Import Administration web site: http://www.ita.doc.gov/import_admin/records/

    +++ end this post

    • >ou are describing the process that forex led to the near complete demise
      of the US steel industry. The more modern “unfair” competition from abroad
      was reigned in by tarifs applied to their products.
      the local industry saw no reason to upgrade their outdated equipment.
      At some point even tarifs could not divert the competitive pressure.

      I don’t mind people trying to argue on a “us first” basis.
      But using the Bush Admin technique of tainting the fact finding
      process by heavy selection to harvest the “objective facts” for the
      “right decission” makes a good discussion at least difficult.

  43. re . . . “So, how often has Airbus licensed Boeing technology then? In other words, how much of an issue is this, in reality””

    Whether or not Airbus licensed “Boeing” technolgy is not so much of an issue- since many safety related issues may be involved.

    regarding Boeing developed – but not Boeing patented or licensed items- at least two arfe known to myself on a very personal basis

    1) One current firm selling a boeing developed manufacturing process is Fatigue Technology- and what is known worldwide as ‘ coldworking’ or sleeve coldworking” of fastener holes … first developed by an office mate of mine named Lou Champoux around 1968 to 1970 as part of the SST program, and later used in large quantities on 767, 747, 757, and 737 within boeing.

    In early 1980, I developed a tool to allow such process to take place without removing the drill plate(s) and first used on 767. A major patent battle eventually resulted in fatigue technology NOT being able to claimm patent rights, since I was able to prove first use on the very first 767 in significant quantities.

    I’m sure you will find Airbus and just about everybody using this process in production

    2) Airbus and Boeing use an electromagnetic riveting process on major -large assemblies – now marketed as Electro-impact or some similar name. That process does have a few related patents owned by Boeing. The original process was known as EMR ElectroMagnetic Riveting- a name coined by … myself … in 1967-68 when I designed and prototyped the very first use of that concept for titanium rivets on the SST program.

    and yes Airbus has used that system also

    Thats a bit out of topic for this thread, but since you seemed to be so insistent – I thought I’d name just a few items for which I have personal experience and knowledge

    And it does sort of relate to the issue of technology sharing –

    Yes – Boeing also used Dassault (sp ? ) CATIA computer design software, etc

    • You brought up the matter of the licensing. I find it hard to understand why you now accuse me of going off-topic.

      • Re andreas at 12:28 am 23 april regarding licensing

        I’ll refer you to YOUR post of 22 april 1:34 pm . “..There are solid reasons for this decision, relating to the expected dominance of a merged Boeing/MDD corporation, and the document outlines them. So, how often has Airbus licensed Boeing technology then? In other words, how much of an issue is this, in reality?”

        IOW it was YOU who first mentioned licensing – probably due to my copy and paste of earlier GATT agreements or links to US trade documents regarding sharing of tecdhnolgy by the U.S to (EADS/Airbus/EU ) with NO quid pro quo…

        But that is NOT the issue here

        later . . .

  44. Don

    I am aware of the differences of taxation, both in the US and the EU. Trust me on that.

    So let’s go back to square one:

    You said:

    “which would also allow airbus to escape a lot of VAT issues ”

    What are the issues (the lot of them)?

    Why would Airbus want to escape them?

    How would it escape them by moving production of the A330-200F to the US?

    Look forward to an explanation focussing on these questions, instead of obfuscation with CVD and information on vaguely related things such as sales taxes in the US.

    It has already been demonstrated to you that your understanding of how EU VAT operates in an export situation is flawed. Does this correction change your appreciation of the ‘issues’?

    Many thanks.

    Andreas

    • Add to that, what would the effect of the supposed VAT issues be when production of the A330-200F occurs in the US, but the sale is to, say, India, compared to production in the EU and sale to India?

  45. To: don on April 23, 2010 at 6:33 am

    Your grasp of VAT is still tenuous.

    VAT is a national _consumer_ tax levied on citizens.
    It only materialises as cost in private ( final ) consumption.
    as a commercial entity it is a pass through
    bookkeeping position.

    Lets look at my business:
    Every item I sell has the basic price + 19%VAT
    on the invoice ( I don’t trade in foodstuff or books : those go at 7% in Germany )
    When I get paid, the base price is my own, VAT is passed to the “Finanzamt”.
    On the other side every item I buy has the same 19% VAT attached. I pay the base price + VAT and reclaim the Vorsteuer ( -VAT ) from the “Finanzamt”.
    I produce revenue for the state to the tune of the added value I produce.
    Airbus buys and sells the same way I do.
    The same goes for an airline.
    They buy a plane for base +VAT and reclaim the VAT.
    When Herr Durchschnitt buys transport from this airline for his holiday travels he gets billed for basic price + VAT.
    BUT:
    As he is the final consumer he has no recourse to reclaim VAT. There goes his available income ;-?

    If an item is exported there will be no final consumer inside the country. No VAT on the invoice
    in the sale or it can be reclaimed at the border.

    The same in reverse on import.
    Everybody and his grandmother having a “nip” on pathtrough of goods used to be quite hampering
    for commerce in times gone by.
    For Germany this is fixed since the Zollunion introduced by Bismarck.

  46. yo andreas . . . “f the manufacturer can reclaim the VAT from the tax man (thereby lowering his price and making his product more competitive), why would he, in a competitive market, include it in the price to the end consumer (increasing purely his profit margin and thereby making the product less competitive)? The double hit would only occur if the manufacturer has pricing power in the market. We know this will not be the case for this competition. ”

    What you seem to be saying is that EADS/Airbus has the option of NOT including VAT tax on Airplanes ! But supposedly, it is a transfer tax- piece by piece on each subassembly made in most of the EU countries and eventually rolled up into the sale price. Therefore, IF airbus does NOT charge/include the VAT on a plane it sells, it would probably be a hidden subsidy, since the government(s) would never receive the taxes.

    Which brings up an interesting conundrum .

    Lets assume that I as DSA ( airline) buys an airbus for my airline in the US. I buy it at the Airbus storefront in paris , and take delivery at Tooolooose . . . ;-PPP

    Do I also get a refund of the VAT ? Or do I pay the VAT since it is included in the sales price ??

    I do not pay duty/import tax when it comes into the U.S per GATT agreements. Nor does Airbus pay any duty charges of significance. Probably a few hundred $$ for special processing, etc. – but no sales price related duty or fees. The import documents are NOT public info in the U.S as regards the sales price. ( which is where countervailing duties or dumping issues intersect )

    Since you and others claim that AIRBUS can/or does zero out the VAT, and I do not pay ( hidden in the sales price the VAT ) – then who does pay it (VAT) ??

    The result would be that Airbus would be selling me an airplane at a lower price than in their ” home’ market – which is the exact definition of ‘ dumping ” !

    OTOH – by not including the VAT in the sale price, or somehow zeroing it out- it would probably be considered A SUBSIDY by the EU countries involved. That would be in addition to the ALLOWED 33% launch aid allowed in GATT, to which BA agreed to about 20 years ago ( see my previous posts ) . . .”The United States withdrew the second case in July 1992 after the two sides negotiated a bilateral agreement limiting government support for large civil aircraft programs. The agreement included a prohibition of future production support and a limitation on the share of government support for the development of new aircraft programs to 33 percent of the project’s total development costs.”

    (copied from a paper with link listed ) . . .

    And I’ll add another twist- In dec 2001, Airbus claimed they could supply a tanker at 40 percent less than Boeing. ! That ***may *** have been possible for several reasons.

    1) a smaller plane than the 330
    2) subsidy > than the normal 25 percent discount typical of commercial airliners- which supposedly included the launch aid …
    3) Boeing mis-management by jacking up the real ” costs” of the 767 above reasonable values.

    And Ill explain the above 3 comments later- cuz I have some interesting data to back them up..

    Even so, I hope this suitably explains most of my views or opinions on the whole subsidy-WTO-lowball games used by Airbus for well over a decade.

    BTW- If you have a problem with Nicoles statement about 33 percent – why not tell her ?

    It should be obvious that she was referring to the 33 percent ALLOWABLE launch aid under GATT – And keep in mind that the 8 year later determination by WTO IS that Airbus did get/use subsidies GREATER than allowed.. which obviously includes launch aid…

    Don

    • VAT, buying and taking ownership in Tolouse:

      You pay VAT and reclaim it during border crossing ( in simplistic theory,
      in reality that is fixed by Airbus with proper paperwork ( a sale to outside
      of the EU )
      Plane buying being an expediture for making profits elsewhere Lufthansa
      would reclaim any VAT as well.
      Only if forex some European monarch would buy an A330 as his personel
      transport ( a private and final consumer purchase ) would the VAT actually stick.

      Imho you haven’t quite grasped VAT yet.

      40% cheaper than Boeings initial bid ( the leasing offer ):
      Afaiu this the Boeing pricing in the initial offer was rather
      fantastic. ( as in taking in fantastic riches, you don’t have
      to bribe the customer if your offer is a bargain, do you ?)

      Thus EADS participation already looks be very expensive for
      Boeing, independent of outcome ( loss of ~40% margin if
      we assume todays offers to be head to head).

  47. re UWE . . . “You pay VAT and reclaim it during border crossing ( in simplistic theory,
    in reality that is fixed by Airbus with proper paperwork ( a sale to outside
    of the EU )”

    +++
    Does that mean that ” my” U S airline (DSA) that I used for an example will be able to reclaim the Airbus VAT ?

    BTW- of course not all sub assemblies, etc will be subject to VAT depending on country of origin, etc, so I am avoiding that issue and just describing the ” Airbus” total airplane VAT ( however combined/accrued )

    IF I can get the VAT tax via reclaim- that then becomes some sort of discount or subsidy, or as I previously described a possible dumping/CVD issue.

    IF i cannot get it back – then it becomes a COST to me, for which I must eventually recover thru profits, as I cannot add it as a ” tax” paid.

    Thus we come full circle to my initial comment about VAT taxes being a COST to the taxpayer- simply substitute Uncle Sam for DSA airlines, and U.S taxpayer for the ‘ stockholders ” or financing or the bank. Those dollars of course are borrowed from China . . .

    OTOH, IF ( I (commercial airline ) or Uncle Sam ( military ) ) do not recover the VAT, and are not charged the VAT as part of the sales price because Airbus writes it off, then it becomes a subsidy by EU/EADS involved governments, which – depending on issues well out of the range of discussion or data available to this forum- **MAY** well be in the realm of improper- illegal, violation of GATT- or even dumping.

    I’ll next post a 2001 summary of a petition which was to be filed in sept 2001- was delayed until early 2002 and then sandbagged by Boeing – and rudy de leon who had been working the issue since July 2001 regarding Airbus improper subsidies…

  48. here is a summary of a CVD petition in which I was involved in researching and doing most of the numerical evaluations and comparisons with the help of a few others. The petition was to be submitted a few weeks later, specifically as it turned out the week of 911. It was delayed of course until early Feb 2002. By that time, the tanker lease issue was in full swing . . .

    What was not known in Feb was the screw-up by boeing regarding the lease program which eventually led to a few prison terms- and a few escapees . . .
    ++++

    keep in mind it is a summary- not intended to explain all the comparisons of equivalent aircraft, etc that were made. AECMA statistical data was used for labor costs and productivity, etc
    +++
    Airbus Countervailing Duty Position Paper [ AUG 2001 ]

    For the past year, the SPEEA Legislative and Public Affairs Committee (L&PA) has been conducting an intensive investigation into the practices of Airbus Industries; namely, the subsidies being provided by EU governments, and the below fair market prices at which they sell their commercial airplanes. SPEEA is concerned because these practices have had a severe impact on the jobs of commercial aerospace workers and the people we represent.

    The L&PA Committee has concluded filling out a very detailed petition requesting relief under U.S. countervailing duty law. The SPEEA Council authorized this investigation, with the goal being to determine whether such a filing could be reasonably supported by examination of publicly-available information from both Boeing and Airbus. Once this petition is filed, the International Trade Administration (ITA) within the Department of Commerce and United States International Trade Commission (USITC) will be able to consider the initiation of a countervailing duty proceeding. Such a proceeding is administrative in nature, and may result in the imposition of special countervailing duties on specific imports.
    In order to fill out the petition, the Committee gathered data from various sources, including: Boeing Annual Reports; the first European Aeronautic Defence and Space Company (EADS) (formerly France’s Aerospatiale Mantra, Germany’s DASA, Spain’s CASA, and Britain’s BAE Systems) Annual Report for 1999/2000; statistical surveys conducted by the European Aerospace Industry (EAI) for 1997 – 1999; information from both Boeing’s and Airbus’ websites; numerous press accounts; and informal discussions with industry representatives. The Boeing Company has neither helped nor hindered us, nor have we had access to any Boeing proprietary data. As SPEEA represents workers within the industry, and not the industry itself, actual sales prices, contract information, profit margins, discounts, and lease information are closely held by the respective companies and were not available to us; however, these can be requested by the ITA and ITC.
    The L&PA Committee has made the following observations which lead to our belief that Airbus, through a variety of methods, is effectively selling their products below cost. Raw material, engines, avionics, landing gear, and similar parts cost the same for Boeing and Airbus. Assembly techniques, automation, certification, process controls, and computer-aided design techniques are essentially the same, and have no inherent cost differences. Additionally, labor costs are higher for EU countries, with differences from 15% higher in 1995 to about 5% in 1998. Finally, the EADS annual report shows that for the year 2000, Airbus’ share of EADS net consolidated profit was zero.
    We then compared the published selling prices of Boeing and Airbus commercial airplanes from 1998 – 2000, omitting figures for the Boeing 747. For 1999, the average cost of all airplanes sold by Boeing was $59 million per plane, whereas the average cost for Airbus was $46.4 million per plane. We then compared two comparable models of aircraft, the A320 and the 737-800. Figures reflected an average 737-800 costing (conservatively) about 10% more than the A320.
    Therefore, how can Airbus, with equal material and subassembly costs, higher labor costs and arguably lower productivity, and admittedly zero profits, still undercut Boeing prices by at least 10 percent? Our determination is that Airbus is selling most, if not all aircraft models into the U.S. at 10 25% below cost. Note: this does not include special lease, financial, or maintenance agreements, which even further harm our workers.
    In conclusion, the overall affect of the governmental subsidization of Airbus has caused distortions in international trade that support United States governmental action. Therefore, the SPEEA L&PA Committee is recommending the SPEEA Council and Executive Board take action to file the petition for countervailing duty relief with the United States Department of Commerce and International Trade Commission.

    +++++

    The rest of course is history

  49. Don

    Which part of ‘zero-rating’ do you not get? Which part of the EU regulations I conveniently linked for you is unclear?

    On export from the EU, the manufacturer zero-rates VAT. I.e. no VAT is charged on ANY part of the exported whatever. End of story. What’s so difficult to understand?

    But at least we have now moved away from the idea that the manufacturer is getting both, the zero-rating rebate, and charging the client. Small comforts…

    As for your dubious assertion that this somehow is a subsidy, err, no. Try again. VAT is a consumption tax that only applies inside the EU, based on the relevant directives. It is not a subsidy but a matter of taxation principle that it does not apply to sales outside the EU, and the mechanism by which this is achieved is zero-rating. This applies to any type of sale, service or good. The analogy would be US State/city sales tax, which also only applies within the jurisdiction in which the sale is happening, regardless of where the good was produced. Once can say that Delaware is providing a subsidy to its merchants compared to those across the state border in Maryland by not charging sales tax. But I don’t think that is a particularly convincing argument. Taxation occurs within boundaries – once these are crossed levels change.

    I am not even going to bother reading your cut and paste until you even try to answer my very simple questions from the previous post. You asserted there is a VAT issue that Airbus wants to escape. Days later we are still left to wonder what it might be.

    As for licensing: you copied it into your post, I responded to it. What’s unclear about that?

    What any of this has got to do with the tanker is beyond me.

  50. Y know andreas- its hard to discern what kind of answer you would like or accept . yet you seem to be focused on my assertion that Airbus can ‘ escape” or somehow get an advantage re VAT issues.

    “…..VAT is a consumption tax that only applies inside the EU, based on the relevant directives. It is not a subsidy but a matter of taxation principle that it does not apply to sales outside the EU, and the mechanism by which this is achieved is zero-rating. This applies to any type of sale, service or good. >>

    Why dont YOU try to answer the following

    1) Does the sales price of an Airbus plane sold/delivered in an EU participating country include the VAT tax of XX% ??

    2) Does the sales price of an Airbus plane sold/delivered in the U.S include the $$ equivalent of the VAT tax ??

    3) Or for identical planes, one sold/delivered in EU and one sold/delivered in the U.S, are the sales prices identical ? ( excluding delivery charges, etc )- I’m talking base price for identical planes.

    Or to put it differently – would the customs declaration form for the U.S purchased Airbus show the same price as that sold in the EU. ?

    My put-assertion is that IF the prices described above are different – and as I suspect-expect lower in the U.S, then the difference becomes some sort of EU subsidy, however identified or calculated.

    Now in a few simple words, eg YES, NO, dont know, or if necessary YES BUT or NO BUT – – – can YOU answer the questions in light of YOUR assertions?

    • Don, I think it best you back off now and at least reread
      the explanations given ( Andreas, me). And maybe do
      some research on the topic on the web ?
      You don’t get it _and_ you are not willing to get it ( because
      your carefully erected house of cards would colapse? )
      You argue like a laywer and not like a scientist which imho
      indicates that your sole purpose is winning an argument
      and not actually gaining factual knowledge.

      All that lamentation on various forms of alledged subsidy
      you present does not detract from the fact that a nation
      that has retooled with laywers has difficulty competing
      with other actually (more) productive nations after the
      impetus created in times gone by has been used up..

  51. Thanks for explaining what your assertion is. So, the fact that the US taxes employees less, and therefore enables companies to pay them less, then is also a subsidy in your thinking? Because the only way we can seem to be able to escape such ‘subsidies’ as you define them is to have a global taxation system. Because, turning your argument around the subsidy to Boeing (if the EU did not zero-rate VAT for exports) would be that the US is not charging VAT on a sale in its jurisdiction, right? So what would have to change to ensure there is no subsidy is that the US introduces VAT?

    Now, coming to the basic point, the answer is yes, the price is different, because of differential taxation in the jurisdictions. In the same way as the price for the same e.g. Apple computer is different if it is bought in a store in Delaware, as opposed to one in Maryland. Does this mean that Apple subsidises consumers in Delaware? If not, why not?

    However, in all this obfuscation, you still have not explained (even accepting your assertion) why Airbus would want to ‘escape’ such a favourable regime?

    By now I presume you are just following the tried and tested lobbyists (because that’s what I think you are) approach of throwing mud (or a less pleasant substance), in the expectation that some of it will stick. Facts or reality be damned.

  52. andreas … “By now I presume you are just following the tried and tested lobbyists (because that’s what I think you are) approach of throwing mud (or a less pleasant substance), in the expectation that some of it will stick. Facts or reality be damned.”

    ++++

    ROTFLMAO !!! lobbyist ??? more ROTFLMAO !!!

    ++++

    Suggest you put the words shuper SPEEA Bofferding into any search engine for example google.

    ++++

    AFIK Apple computers were not a subject of GATT92/94. And state sales taxes go to states, not to the feds.

    And in some states, no sales tax. Besides which, I was talking about BASE PRICE not any additional ” tax ” fee , or duty. That is because there is currently NO duty on aircraft. However, there are hidden taxes in the base price due to subassemblies, place of origin( state, provence, country, etc ) VAT is a pass thru tax on ‘ value added ” by definition

    lets take an overly simplified example of a COMMERCIAL Airbus ASSEMBLED in the U.S

    Wings are built in UK from various subassemblies and parts most of which incur some form/amount of VAT …

    And IF final assembly was in France, the VAT on the assembly process would be significant

    But IF/when final assembly is done in U.S there will be NO VAT on the assembly process. And the VAT tax/passthru on the Wings will be zeroed according to your statements.

    Since those EU countries that use or have VAT to help pay for Government, when they are zeroed, and NOT paid, what else can they be? A ‘ gift ‘ ??

    Out of whose pocket ?

    And then if said Airbus is sold in the U.S, if it has more than ” 50″ percent U.S content- however calculated via cooked books and loopholes, it also escapes and residual taxes/duties. And it can escape a state sales tax simply by being ‘delivered’ either in a state with no sales tax- or out over the ocean > 20 or 120 miles offrshore. Which by the way is pretty much standard procedure . . . maybe even escaping certain federal taxes by showing a non profitm in U.S operations

    So Airbus would not only gain in certain tax loophole issues, but be a EU govt subsidized firm located in the U.S competing against a private firm AKA Boeing.

    The EU system /EADS not only has a poor track record re military planes ( A400M ) (Agusta helicopters ) Toronado, etc but has two priority issues – JOBS, JOBS, JOBS, and National Pride.

    While our system may be flawed, until recently, our unemployment rates were lower, and productivity higher than any or all countries using the VAT system.

    In any case, this thread seems to have somewhat diverted from the basic subject – as to how or why EADS believes they can make a bid using a larger airplane with higher lifetime fuel consumption as figured by the RFP formula- and come in with a price equal to or more than 1 percent lower than Boeing.

    I offered my opinion and the reasons and/or documentation in support

    AS for the accusation as to my being a shill for BA, SPEEA (union), or lobbyist – perhaps I should feel honored as to your view of my capabilities, which I can assure you are NOT shared by Boeing BOD, Boeing sales, SPEEA, or any lobbyist firm- that is AFTER I QUIT LAUGHING, as will others who know me.

    I might suggest some further off this topic links as to my ‘ chops ‘ and ” lobbying” efforts

    Enter the following three words Shuper Speea talk

  53. As to VAT and realted issues

    I suggest a reading of aero report jet transport pdf which can be found at
    http://trade.gov/mas/manufacturing/OAAI/index.asp in link shown as

    Flight Plan – An assessment of the U.S. Aerospace Industry (PDF)

    and go to page 154 and on first mention of VAT is page 155 of 175

    and on page 106 we find this interesting bit of info

    . . .”Information on European “direct funding” has been even less forthcoming. The EU did not
    notify the United States until July 1997 of funding commitments made in 1996 by EU member
    states to develop the Airbus A330-200, even though the information was to be provided “at the
    time of government commitment.” Also contrary to the 1992 Agreement, the EU declined to
    provide information regarding the CPA completed for the Airbus A330-200 and the A340-
    500/600. The European Union claimed that the United States’s request was not “duly
    motivated” and therefore was declined. Most recently, the European Union declined to provide
    full CPA information on the A380 unless the United States agreed to new conditions, not
    specified in the 1992 Agreement, concerning the handling of that information, even though there
    was no reason to question the integrity of U.S. government data-protection practices.
    The U.S. government has provided to the EU extensive background on its transparency reports
    and methodologies, and offered proposals to improve data exchanges, but to no avail. EU
    reports continued to be vague and opaque. Most recently, the United States unilaterally provided
    to the European Union various reports for the first time that detailed the type and funding level
    of U.S. Department of Defense contracts awarded to Boeing.”

    +++

    regardless of what you may think of the report by a U.S government agency- this report being dated in 2005, they must have gotten some of it right re subsidies to Airbus … :-PP

    The proof is left to the student

    BTW- my analysis in 2001-2002 estimated a range between 10 to 20 percent below cost, eg unfair- improper subsidies outside/excess to GATT92/94/WTO

    In a few months, we may seem just how close I was/am

  54. Back to capabilities of EADS/Airbus vs 767

    I’ve found a great explanation of a FEW of the issues that were mentioned in the GAO report, but which most on this board seem to have missed

    http://www.humanevents.com/article.php?id=27688

    starts . . Sir Isaac and the Airbus
    by Jed Babbin
    07/25/2008

    Newtonian physics – which a professor of fond memory tried to teach me in freshman year of college – prescribes laws that are immutable. Dr. Fred Furst used to say, “The laws of physics are the same wherever you go, and bad things happen when you try to break them.” For that reason alone, I’m confident neither Sir Isaac nor Prof. Furst would choose the Airbus 330 tanker for the US Air Force.

    I never promised you there would be no math, but trust me: this won’t be too bad. We’ve got to do a little math and a little physics.

    Newton’s Second Law of Motion defines the relationship between mass (roughly what something weighs), acceleration (not the speed of an object, but the rate at which an object gains speed) and the force required to move a mass at a rate of acceleration: Force equals mass multiplied by acceleration. As Freddie Furst said over and over again, “F=mα.” About which more in a moment. . . . goes on with a great analysis based on a few FACTS . . . .

    basically Airbus power to weight ratio re refueling/airspeed/ acceleration will/did not meet AF requirements the last time AND then there is the ‘ turnaround” on airfield issue

    ++++ The above article was found as a link from

    http://biggovernment.com/jbabbin/2010/04/23/wsj-picks-wrong-issue-in-air-force-tanker-debate/

    Which starts . .
    WSJ Picks Wrong Issue in Air Force Tanker Debate
    by Jed Babbin

    It’s highly unusual for The Wall Street Journal to be gulled into ignoring the most important part of an issue in favor of chasing a rabbit down a random trail. But it has apparently fallen prey to what is at stake in the Air Force’s acquisition of a tanker aircraft to replace the Eisenhower-era KC-135s, which have flown far past their useful life. The Journal, like too many others, apparently believes it’s a question of protectionism versus open competition. . . .

    and includes . .”The Air Force’s decision between the Boeing and Airbus aircraft hinges on one important question, and it has nothing to do with protectionism, subsidies or any financial issue. It’s a matter of which aircraft best meets the Air Force’s – the warfighters’ – needs. In this, the Airbus categorically fails.

    As I’ve written many times before, there are mission-critical maneuvers – called “breakaways” and “overruns” – which any tanker has to perform in order to safely refuel all the aircraft in the Air Force’s inventory, including some – such as F-15 and F-16 fighters – that have to be refueled at higher speeds than slower-moving aircraft such as the C-17 and C-130.

    The primary reason that the Government Accountability office overturned the Air Force award of the contract to EADS in the last go round had nothing to do with protectionism. The GAO found, correctly, that the A-330 lacks the ability to accelerate quickly enough – and to achieve a sufficiently high top speed – to perform these maneuvers safely and in accordance with Air Force standards which it has developed in over a half-century of airborn refueling.

    Since the GAO decision, more information has come out showing that the “laws” – the internal computer programming – that govern the Airbus’ flight controls make it unsuitable and probably dangerous to fly in a combat environment.”

    Please read the whole article(s) BEFORE resuming the trash talk.

    Of course if one has some FACTS . . . please post them ( with links to credible sources )

    • A truly endearing story, Don.

      unfortunately ( and like your previous tidbits ) it
      uses interesting arguments in a “not quite right” way.

      Acceleration available at any point is available thrust minus drag
      at the current speed. Thus the base thrust/weight ratio is
      of more interest for the start roll. Didn’t someone here mention
      that the a330 has better take off performance than the 767?

      Going back to accelerating at refueling speeds for the brake away
      maneuver: your computation would have to weight in the better
      drag numbers for the a330. With both types seemingly having the
      same “max speed” of mach .86, a330 crusing at mach .82 and 767
      cruising at mach .80 I would find it prudent that you expand your
      math a bit to have it portrait reality in a believable way.

      As it is you are prooving the lesson your prof gave in amusing fashion
      by seemingly falling for the same trap he wanted to highlight.

  55. UWE- suggest you READ the GAO report regarding breakaway issues and related structural issues

    they claimed KC-30 DID NOT MEET SPECS AS REQUIRED AND THAT RELATED CLAIMS THAT THEY COULD WERE UNSUPPORTABLE.

    Please be sure to contact the GAO and tell them of their error so they can correct their report – and take back whatever payments they may have made to their experts who obviously were incompetent .

    After all, a correct and level playing field IS the issue, is it not?

    When the facts are on your side – argue the facts

    When the rules are on your side, argue the rules

    And in your case, when neither is on your side
    Holler and scream unfair !

    • You are too kind, Sir.
      Thank you for the good advice.

      My understanding up to now was
      that the GAO had essentially
      chided the Airforce (or EADS?) on
      a lacking paper trail.

      And I still think that the “technical”
      explanation you gave is your
      personal project.

      G!
      uwe

  56. as to ” MY” technical personbal project – what part of the article I quoted do you NOT understand.

    You said . . .Acceleration available at any point is available thrust minus drag
    at the current speed. Thus the base thrust/weight ratio is
    of more interest for the start roll…

    ++
    The ” thrust minus drag” comment is basically wrong – unless one includes somehow the MASS to be accelerated.

    Whether on them ground, or in the air, horizontal or vertical , in our universe F = Ma

    therefore a equals F/M F while airborne may well include at a constant speed the difference between thrust and drag – however drag is a function of speed, so a speed increase changes the available F or thrust for acceleration.

    As to M normally in simple terms M = Weight divided by G gravity. weight in this case is airplane plus residual fuel on board at any instant.

    My point being that one cannot simply calculate acceleration by ignoring the Mass ( weight ) of the object involved ( airplane plus fuel )

    I make no claim re aerodynamics – but refer you instead to gaspasser and/or GAO/airforce/and similar consultants who have much more facts and data, and knowledge than either of us.

    • Don, earlier you had indicated an engineering background.
      Did i missunderstand you?

      Einstein:
      Make your model as simple as possible.
      Do not make it simpler.

      I never said the mass drops out.
      I said _you do not have full thrust available_ for breakaway
      due to aerodynamic drag.
      thus arguing solely with t/w ratios is too simple.

      The A330 cruising at higher speeds with better sfc would
      imho hint that at the same speed it has more excess thrust
      ( in units of t/w to make you happy ) available than the 767.

      On another item:
      The FBW ruleset for the A330MRTT seems to be not identical to
      the civil A330.( as any engineer worth his money would expect )

  57. Groooan- why not try to READ the GAO report and take your argument up with them ??

    http://www.gao.gov/decisions/bidpro/311344.htmAf
    AFTER discussing the breakaway issue ….

    extract . . .. With regard to the overrun issue, the record shows that Northrop Grumman was twice informed by the Air Force during discussions that the firm’s initially identified maximum operational airspeed of [Deleted] Knots Indicated Air Speed (KIAS) would not be sufficient under current Air Force overrun procedures to achieve required overrun speeds of [Deleted] KIAS for various fighter aircraft, including the [Deleted], or [Deleted] KIAS for the [Deleted].[56] See AR, Tab 184, EN NPG-MC1-003, at 2; EN NPG-MC1-003a, at 1-2. Ultimately, Northrop Grumman informed the Air Force that a [Deleted] limited the aircraft’s operational speed, but that Northrop Grumman proposed to include a [Deleted] to achieve the necessary overrun speed.[57] See id., Northrop Grumman Response to EN NPG‑MC1‑003a, at 2-7. The Air Force accepted Northrop Grumman’s proposed solution as satisfying this KPP threshold. HT at 628. . . .

    They then said . . .

    From this record, we cannot conclude that the Air Force reasonably evaluated the capability of Northrop Grumman’s proposed aircraft to satisfy the KPP threshold requirement to refuel all current Air Force fixed-wing tanker-compatible aircraft using current Air Force procedures. The contemporaneous record, as explained by the hearing testimony, does not establish that the Air Force understood Northrop Grumman’s response in discussions concerning its ability to satisfy the solicitation requirements, nor does it demonstrate that the agency had a reasonable basis upon which to accept Northrop Grumman’s promises of compliance.

    +++

    Also run down

    http://www.govexec.com/dailyfed/0608/0608cdtanker.htm

    or

    http://blog.al.com/live/2008/06/gao_releases_full_tanker_repor.html

    ++

    BTW according to NASA – thrust generally decreases with altitude as I recall, thus the thrust to weight/mass ratio also decreases

    Which is why your argument re takeoff thrust etc also fails

    generally lower altitude- Not too many airfields at 30K feet

    have a good day – AFTER reading a few facts or EXPERT opinions in the GAO report . . .

    And dont forget the airfield turnaround issues previously mentioned

    • Such a nice morning, Don.

      Let me start to enumerate the errors and biases:

      * “Prepared for the Boeing Companny” ( that says all imho,
      if it would not have painted the picture in Boeing pink it
      would not have been published.

      * Translating difference in MTOW directly into fuel consumption.

      * (while) assuming that the bigger plane will transfer the same amount of fuel
      though ladden with a lot more ( taking off at MTOW or do they have to take stones and politicians as balast ;-? ).

      * That the same number of planes needs to be used to create the same amount
      of fuel flow into the transfer area.

      I haven’t read any further, Don. should I continue ?

      G!
      uwe

  58. NO need to continue- since yu havent read the rfp and dont understand the GAO report.

    And you havent come up with any facts re the comparison of fuel burn, or to refute the overspeed and breakaway issues somewhat explained by the GAO report

    Nor the runway turnaround issue previously mentioned

    However, I’m sure EADS will be able to come up with even more arguments as to the ‘ advantages” of buying an 24 foot SUV to get my groceries instead of an 16 foot van which does fit in my garage, and give me sa suitable discount to rebuild my garage and pay for the extra fuel needed to be able to make the same trip.

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