The first in a series.
By Scott Hamilton
Dec. 6, 2021, © Leeham News: The US Air Force began the process this year to procure the KC-Y aerial refueling tanker.
Originally, this was to follow the KC-X (awarded to Boeing in the form of the KC-46A) to replace the McDonnell Douglas KC-10. This has been altered to be a bridge tanker between the KC-X and the KC-Z, an advanced tanker design that is in the conceptual stage.
The KC-Y promises to be a contest between Boeing, for more KC-46 orders, and a partnership between Lockheed Martin and Airbus based on the A330-200 MRTT. MRTT stands for Multi-Role Tanker Transport. The Lockheed Martin plane is called the LMXT, for now.
The KC-X competition was bitter and repetitive. A partnership between Northrop Grumman and Airbus initially won the contract. But Boeing protested how the USAF scored the bake-off. The General Accounting Office upheld the protest. A new competition saw the contract awarded to Boeing.
KC-Y is only in the Request for Information stage and neither Boeing nor Lockheed have submitted filings yet. But already, the surrogate Boeing campaign appears underway.
A state legislator from Kansas published an OpEd urging the Air Force to buy from the “American” Boeing rather than the “European” Airbus. Wichita (KS) has a long history with Boeing. Spirit Aerosystems, once a Boeing facility before being sold, builds 737 fuselages and nose sections for the 787, 777 and 767. The irony, of course, is that Airbus has a major engineering center in Wichita, for which it hired a number of ex-Boeing engineers laid off by some of Boeing’s periodic house-cleanings.
For its part, Lockheed Martin is already touting the LMXT as “Built in America, By Americans, for Americans.” The A330 is produced and assembled in Europe, but it has large percentages of American content. If the KC-X award had remained with Airbus, the company would have built a final assembly line in Mobile (AL) for the KC-45 tanker, as the Airbus version was christened. The location later was selected for the US-assembled A320 family and, later, the US FAL for the A220.
Lockheed hasn’t said yet where the LMXT will be assembled in the US.
Boeing’s partisan, Loren Thompson, returned this month to his long-running complaints about “illegal” subsidies Airbus received in developing the A330—a theme he, Boeing and others emphasized during the KC-X competition. Airbus long ago repaid the subsidies and, in any event, under World Trade Organization rules, military programs are exempt from subsidy challenges. Thompson’s think tank, the Lexington Institute, receives money from Boeing.
Nevertheless, these two columns portend one of the future themes that will almost certainly emerge in the KC-Y contest.
With this as backdrop, LNA interviewed Sean O’Keefe, the former CEO of EADS North America, as it was known during the Northrop Grumman-EADS KC-Y competition. EADS was later renamed Airbus Group. O’Keefe previously was the administrator of NASA. With a background in the industrial and government sectors and inside knowledge of the KC-Y contest,
LNA takes O’Keefe on a trip down memory lane in this first of a series of articles.
O’Keefe became CEO of EADS North America in the fall of 2009. Ralph Crosby, who was CEO from 2002, became chairman. He held various positions at Northrop Grumman from 1981 to 2002, when he joined EADS.
Boeing’s deal to lease 100 KC-767 tankers to the USAF, agreed after 9/11, was canceled due to a scandal during the procurement process and opposition from US Sen. John McCain.
In what became known as Round Two of the procurement effort, Northrop was awarded the contract for the A330-based KC-45 in February 2008. Boeing protested the award over Air Force failures in the process. The GAO upheld the protest and the Pentagon moved to re-run the competition in what became known as Round Three.
O’Keefe already was familiar with the competition. Before joining EADS, he was a vice president at GE Aviation. GE supplied the engines for the KC-45.
“When I walked into EADS in the fall of 2009, the task was to reset the entire profile and recompete the whole program and begin again under a new set of parameters that the defense department devised over that prior year after having overturned the previous award,” O’Keefe recalled. He would be at EADS through the Round Three competition and contract award.
The Air Force was instructed to do was to reset the requirements of the Round Three competition to be one that set a baseline standard of the range, refueling capability, offload capacity, using the existing KC-135 fleet as being the baseline.
“If anybody could meet that standard and exceed it, then good for you, but they weren’t going to pay for the excess,” O’Keefe said. “It was a fixed price contract arrangement for both the development as well as the production of aircraft. The Air Force determination was, ‘We’re not going to pay a dime more for more capacity than what we’re asking for in the requirement.’”
O’Keefe said that it was clear that when the USAF released made the cost decision, it essentially meant that EADS had a dilemma.
“What we were offering at the time was a modified A330 that was substantially bigger than the KC-135 and had not only a lot more capacity, it had more range, and more potential cargo capacity you could actually attach to it. That’s what attracted the Air Force.”
The Air Force said in awarding the contract to Northrop that these features were why the KC-45 was selected. In addition to the strategic air refueling capability, the KC-45 offered a strategic airlift capability that can be employed at all kinds of other times when it’s not consumed and otherwise occupied with doing aerial refueling.
But none of that would matter in Round Three.
“The first decision we had to make was whether or not we would find some way to reduce the capacity and advantages of what an A330 configured as a refueler. That got to be an engineering challenge to say, ‘How do we make this thing less capable than what it already is?’”
Still, the 767 tanker Boeing would offer was only a paper concept. (The KC-767 ordered by Japan and Italy had so many technical problems, Boeing dumped the design for a new one. Airbus already was under contract and development for the MRTT with a few NATO countries.
The fixed price requirement, the decision to favor the lowest price over capability and other factors gave pause to Northrop and EADS. The determination from Northrop Grumman was, “That’s it. We’re throwing in the towel because this was just not going to work. We don’t have a chance. There’s no way to do this,” O’Keefe recalled.
Over at EADS, however, officials weren’t willing to throw in the towel.
“We knew it was a longer shot on this competition. But it was also viewed as prospectively an opportunity if you got to the right kind of combination of things we had going for us,” O’Keefe said. The first was an aircraft that was largely developed and tested. “Therefore, the development cost are related costs were going to be significantly less than what it would be for the competition. “The 767 had never been through a tanker development program, so it was going to be something more. In fact, that’s exactly the way the bids came out as the proposals were evaluated. It was significantly less for the development cost for the A330/KC-45 offering that we made relative to what Boeing proposed.”
The big difference was in the fixed price production that was involved. “We did a very aggressive scrub in order to figure out exactly how to reduce the price that we would offer for production aircraft at full rate and reduced it a little. It went down by 10% to 15% of the margin for the full-rate production levels.”
The Round Two competition also was a learning experience for EADS. But the decision also rested in part on the potential of the A320 program. This will be examined in Part 2.
Canada last week ruled out Boeing as a bidder for its new jet fighter procurement. Although the Defence department didn’t explicitly say so, media reports indicated Boeing was disqualified because of its 2017 trade complaint against the Bombardier C Series. After the complaint was filed, the financially struggling Bombardier sold 50.1% of the C Series program to Airbus for US$1. Even then, Bombardier couldn’t fulfill its remaining financial obligations. Airbus bought out BBD’s remaining shares and now owns 75% of the program. Canada inserted clauses into future procurements that disqualified companies that took actions detrimental to Canada’s aerospace interests. This was widely called the “Boeing amendment.” Boeing previously was disqualified from bidding on Canada’s aerial tanker replacement.
Why did Boeing file the trade complaint against the C Series? This is fully explained in my new book, Air Wars, The Global Combat Between Airbus and Boeing. It’s available at Amazon. This is just one of the scores of behind-the-scenes stories about the often bitter competition between Airbus and Boeing.
Rated 4.5 stars at Amazon and Good Reads, Air Wars has been called a worthy successor to 1982’s The Sporty Game, the definitive history at the time of the competition between Boeing, McDonnell Douglas, and Airbus.
Quoting from the article above:
“What we were offering at the time was a modified A330 that was substantially bigger than the KC-135 and had not only a lot more capacity, it had more range, and more potential cargo capacity you could actually attach to it. That’s what attracted the Air Force.”
The Air Force said in awarding the contract to Northrop that these features were why the KC-45 was selected. In addition to the strategic air refueling capability, the KC-45 offered a strategic airlift capability that can be employed at all kinds of other times when it’s not consumed and otherwise occupied with doing aerial refueling.”
Have these selection criteria changed in the meantime?
USAF answer: no
Lobby answer: “we need to optimize ramp space”.
USAF at time was far more about airlift capabilty than refueling:
“The two most recent Mobility Capability Studies found that future tankers,
with increased passenger and cargo capability, will enhance the benefits of our Joint Force. ”
As some General said why KC-45 was selected: “more!”
Defense contracts: Interesting article on how dirty tricks can come back to haunt you:
“Super Hornet Disqualification Was Payback For Boeing”
“Boeing’s 2017 attempt to effectively bar Bombardier’s CSeries airliner from the U.S. market played a part in the company being kicked out of the competition to supply the RCAF with 88 new fighter aircraft. The competition has been narrowed to two, the Lockheed Martin F-35 and the SAAB Gripen. Reuters is reporting that the federal government made good on its threat to consider the Bombardier trade dispute in its evaluation of the fighter contract proposals.”
BA’s board and Muilenburg didn’t heed warning. Let’s see if the U S. learns a thing or two from BA’s mistake.
CBC: Federal budget resurrects ‘economic harm’ warning as fighter jet contract nears
As a Canadian I am glad they did this. Canada cannot allow such predatory behavior to go unpunished. With Airbus now running the Cseries program. Boeing will suffer the pain of a thousand cuts as its single aisle market share evaporates due to its sheer lack of competence in design and management strategy. How long before Airbus starts calling the holders of those stalled 787 deliveries? Boeing is rotton to the core. All these massive failures are symptoms of a deep rot.
For KC-X, Congress overruled USAF, moving the goal posts so only Boeings KC46 could win. And then put on a big effort to deny & re-write history.
Everybody knows beforehand that when track-record, (Pacific) tanker capabilities, cargo / flexibility would rule, the “wrong”one wins. So they’ll find an alternative set of rules. And “they” isn’t the military.
KC-Y; Boeing overpromises, gets the contract. They need it badly, which might be a major factor.
@Keesje: Congress didn’t overrule USAF. Government Accounting Office (GAO) found the second round of procurement invalid. Many Congress members meddled in round two and round three, but Congress as an institution didn’t.
@scott “The GAO upheld the award” I think you mean protest here.
I’m of a mixed opinion here. I can understand why the government would want the military to buy and use US made equipment. It makes sense from a national perspective.
What sucks for the military is that, from what I am reading, the Air Force received a less capable aircraft then they could have had.
What really sucks for Boeing, is that (once again, I haven’t followed this as closely as other things) the contract was fixed price and BA hasn’t really made money on the program.
Funny, how the decisions the made (some in hubris) have been pyrrhic victories;
– Tanker program won, costs them money
– C-Series tariffs costs them fighter bid
– Not taking Bombardier up on offer to partner on C-Series pushes it into the waiting arms of Airbus, now they have nothing to compete in that space
– Rolling out 737 Max to grab half of the AA order from Airbus ends up costing them over $20 billion and unmasks their cozy relationship with the FAA , causing the 777X & 787 to face greater scrutiny
All of those decisions have cost them billions. Great job those guys from GE did…
How Boeing Was Set on the Path to Disaster by the Cult of Jack Welch
” Not taking Bombardier up on offer to partner on C-Series pushes it into the waiting arms of Airbus, now they have nothing to compete in that space”
To be fair, Airbus also has not managed to make this project profitable so far.
To be fair, BA also has not managed to make the 787 / MAX projects profitable so far — despite having 10 / 7 years in which to do so.
Let’s see how profitable the A220 is after a similar time period has passed — bearing in mind that the A220-500 is also on the cards.
One would have to access the latest corporate financials of Airbus to see where the price points are on the sales of the A220s. Yes, they probably are losing on the sales to Delta and Air Canada, but a lot of the planes going out the door now are going to JB, AF, etc.,… Those planes were probably sold at 5 to 12 million dollars higher. And if and when the -500/-700 are sold, they could do very well toward the bottom line.
We’ve reported, behind the paywall, Airbus is currently losing about $400m a year on the A220 (UK aerospace analyst information). Airbus says it’s on a path to be profitable by 2025.
According to AB Canada, they’ll become profitable around 2025 mostly thru’ production ramp up, similar to BBD’s strategy.
One can assume it is a massive job to reduce cost and increase reliability at the same time. Hence only a large and experienced organization can pull it off that has the money to survive while doing it. It shows that Canadair alone would never have made it past “The valley of death”.
I’m going to use a sport analogy here;
In the NFL they have a system called the waiver wire. When a player is released from a team, he must pass through this system called ‘waivers’ where every team (based on current win-loss record) gets a chance to claim the player (along with the contract he has) and if no one does, he becomes a free agent.
Every once in awhile, an unhappy player on a team will make himself unattractive (essentially becoming a cancer) so he can force his way off of his current team and get claimed by another – the place he wants to go.
But if a rival team (usually within the division) knows about this and wants to stop this player from going to the team, which would improve them and make them harder to beat (each division team plays the others twice a year – home and away) they will claim the player…even if the player doesn’t play for that team, by ‘squatting’ on his rights – keeping him from making the other team better.
Now, no one could have foreseen the Max grounding that BA went through, but by acquiring the C-Series program Airbus put itself to be in a position to be in a niche where Boeing had a weak offering (Max 7) and they kept the customers of the C-Series out of Boeing’s hands, if all went sideways on the program for Bombardier.
It’s also similar to Airbus launching the A330Neo to keep a presence in a market to keep BA honest on pricing.
In retrospect, a temporary loss of $400 million (which is less after taxes, considering it reduces the amount paid) to keep BA out of the space, put pressure on them, give them engineering talent in North America and potentially give them a future design to bring to market – is a small price to pay.
Is BA able to make the MAX project profitable so far?? 🙄
Proof that how difficult it is to turn the company around as long as the mentality is to maximize short term profits.
The issues here are towards emotional and failure to understand the contract process.
The start is USAF asks congress for funding for the Tanker in this case. The basis of that request was to replace the KC-135 (ironically its in like Mk 45 versions good through 2030-2040)
That resulted in a replacement not an enhancement. If the USAF wanted an enhancement, that is what they should have asked for.
No one makes a KC-135 type aircraft now. The closest to that is the 767 and A330.
By definition, the USAF was going to get some capacity increase.
O Keafe puts his spin on it, but the main deck cargo capability was included on the KC-46 and was not on the KC-45.
Also, the A330 was in process, it was not a tested or proven product You will note the side step by O Keafe ht the A330MRT was a plane (pun) conversion. It did not meet USAF specs for KC-X., .
There is an amendment to the KC-X RFP that is secret for some systems (jammers, comms, EMP, hardening) . We may see hints of it but only top security cleared personnel are allowed to see that (Airbus qualifies). The A330MRT never met the USAF secret specs.
The facts are, in Round 2, the USAF gave Airbus credit for more fuel and cargo when that WAS NOT in the RFP (public part).
No matter what anyone thinks of Boeing, when you have a bid and the bidee violates the terms, it can get overturned. The basis is does the violation bust the contract. GAO ruled it did (and that is rare).
What the EU types don’t understand is that the US has the GAO, which is an independent agency who among other aspects, assess the protest of a Government contract (in this case the KC-X)
They ruled as they should have. The RFP could have been written to give credit to Airbus for more fuel and cargo (granted the cargo is not convenient on the main deck and you can put it on the freight pans. Nor do you get a large loading door.
The USAF brass got big eyes. A cargo master could have told them the wondrous cargo capacity came at a cost of flexibility.
Equally the fuel off load may or may not have utility, in this case the RFP said not (and supported by USAF data at the time).
The USAF was in clear violation of giving credit on fuel and cargo and it was also in violation of the ramp space spec (wavered). The EU types can cry all they want, but those are hard facts.
What resulted was the RFP was not really changed, it was clarified so that Boeing and Airbus were aware there was no excess credit and the ramp requirement was validated.
Airbus could have put folding wings on the A330MRT, otherwise its size was a debit on the bid.
The USAF still wound up with more fuel offload and more cargo as it was simply a low cost bid and the KC-46 came with that by default.
We also will not ever know how Airbus would have done on a KC-X bid as they have never built and aircraft to that spec (they now nibble around the edges offering more “features”)
The cargo argument is totally spurious.
The US stations tankers all over the US and world. They are there for a reason. When they are needed, they need all of them in that location. And not all of them are available. Routine Maint (a lot on KC-135R) and repairs as needed cut those numbers.
So no, you are not going to say, oh, we have two weeks, lets run cargo! Not only does it not work, its also disruptive e ad you don’t know when that is available. The US has a different system that deal with that under the CRAF program (and its has its own freighters that exceed the entire world air forces in size).
You can tank or you can carry cargo, but you can’t do both.
Sometimes you can overlap a mission dragging fighters out to a location and carry squadron personal and parts, but that is not common day in day out.
Countries that have the A330MRT simply give up tanking in one area to carry cargo to another. If you look at where they operate, its not remotely like the US world wide ops.
In the end the A330MRT was a bigger more costly aircraft that Airbus could not dumb down. 767 is smaller, more fuel efficient, fits the ramp spacing and cost less. On a fixed bid contract its going to win.
Contract execution on the KC-46 is clearly a huge Boeing problem (failure).
None of it has to do with A330 air frame vs 7867 air-frame. Its all Boeing management failures. Neither aircrat is inherently more tankeree than the other.
I would love to see the A330MRT, aka KC-Y built in the US. That would be really cool and a benefit to the US. It would not be for the USAF.
That does not mean the RFP cold not call for a dumbed down tanker that had no KC-X features. Then you have the lack of ability to deploy as the USAF does (not other air forces) that the KC-46 currently has (its back filling in low threat and freeing up KC-135R for the overseas and stealth fueling missions)
But on a straight cost shootout Airbus can only win it if they take a big loss. Boeing can dumb down the KC-46 as well.
Boeing may someday recoup their losses. Airbus never would.
I think it’s fanciful immagination that the A330 couldn’t be fitted with the ‘secret’ communication facilities.
Boeing doesn’t make these items itself , it’s the usual ‘top secret’ contractors like Cobham (at the time a UK based company) who did much more than just the refueling equipment
Remember Northrop was the US lead on the tanker project and would have no trouble on ‘US eyes only’ components.
The point about CRAF is mute. CRAF is needed because USAF has no sufficient airlift capability with its KC-135. It will be very different even with just the KC-46.
KC-X was intended for in theater operations where CRAF would not go. So USAF flys in soldiers to another airport with CRAF. CRAF’s most capable aircraft can handle LD3 on the lower deck. Some can just handle LD2 but KC-46 can’t handle anything on the lower deck. For further fast transfer the LDs would have to be moved into a freight KC-46 and the troops inside a KC-46 with palletized seating. Therefor USAF would need two KC-46 instead of one KC-45. Same for a direct troop transport from the US to a destination: roughly two KC-46 instead of one KC-45.
Does the KC-46 meet USAF specification even today?
I think this is the wrong way to look at it. Airbus never thought they would send just $1 and the money would roll in. I think the Airbus thought process was something like this:
* Would we like a plane that size in our line up (do we believe in the market potential) – yes
* Is the CSeries a well designed aircraft that can be successful in that market – yes
* Can we get the costs down by improving the production process and re-negotiating contracts as they come up – yes.
* Does the CSeries have long term grow capability – yes both as a further stretch and as a longer range aircraft.
* Will us furthering the CSeries put Boeing in an awkward strategic spot – yes, Boing will need two aircraft to counter both A320 growth and the CSeries at the bottom end.
* What would it cost us to do it our selves – 10Billion+ development costs and 4 years of money loosing production, say 12Billion all told. Minimum.
* What will it cost us to take it from Bombardier – $1 for 50% and control + $600 million for another 25% and 1.2 billion for 4 years of loss making production. So 1.8 billion for total control and 75% ownership of the program.
Not free but still a great deal.
Boeing never would have intended anything beyond trashing that project. $1 or not.
That said: what behaviour did they expect from airbus?
The GE mafia that took over Boeing has no interest in acquiring new programs, and very little interest in developing its own new programs.
It is only interested in building planes more cheaply. Any cost reduction provides an immediate boost in free cash flow, which gives them more money to spend on stock buy backs, and an immediate boost in the stock price.
McNerny, who drove the company down the ruinous path of the Max was rewarded for his “stewardship” by a total compensation of $239 million.
Top Boeing execs can make themselves fabulously wealthy by cutting costs by any means regardless of the long term consequences. They cannot do this by making decisions which are in the long term interest of the company and its stakeholders.
Too put some numbers to it, a five year CEO makes about $125 mil on salary alone. If he eliminates R&D and any investment in the future and uses the proceeds to buy back stock, he can make 2-3 times as much.
This is why Boeing commercial is ultimately doomed.
Airbus adds 3 other factors:
-A massive service and support network.
-Access to finance to bankroll investments and short term losses.
-Political backing beyond just Quebec and Ottawa.
-Production lines in the USA.
-Skillful and comfortable in running multinational projects with equal partner nations and companies. I’m pretty sure Canadians both Anglophone or Francophone from Mirabel and Americans from Airbus facilities in the US (say Mobile) are going to end up running things in Toulouse (or Hamburg or Broughton). CEO is always likely to be a Frenchman, German or Brit but who knows if a Canadian or American will turn up. Current COO Christian Scherrer was educated in Canada.
Airbus would be different place without the American Leahy.
It’s still early days for Airbus’s tenure of the C-Series / A220. Orders have continued to increase during the pandemic – quite an achievement – so there must be something in it.
It’s also part of Airbus’s apparent strategy of competing as hard as possible against Boeing at every level (even where Boeing don’t actually tread). The A220 is another thing that makes it harder for Boeing to sell its aircraft at profitable prices. Every A220 Airbus sells is an aircraft that Boeing didn’t sell. Market share really is everything; you can’t make profit if one’s market share is too small. They can do this because they make so much on their other aircraft.
So it’s worthwhile Airbus selling A220s now at a loss, because it secures customers who all seem to love it. If there’s one thing Airbus has learned it’s that happy customers buy more aircraft later, and on present form they’re very unlikely to buy a Boeing when they do.
“I can understand why the government would want the military to buy and use US made equipment. It makes sense from a national perspective.”
Sure, we all understand that point.
On the other hand, if other armament-producing countries all applied the same reasoning, then US arms exports would be badly hit.
Various countries in the EU purchased the F-35, in an attempt to standardize things within NATO, and despite the fact that the EU has three of its own fighter jet manufacturers. The argument of “yeah, but the F-35 is better” has become very stale since then, seeing as the plane is a litany of failures and disappointments. The UAE decided last week to go with the Rafale 4 rather than the F-35; applying the nationalistic reasoning above, other European countries might consider following suit.
It would be really interesting if Canada went for the Gripen instead of the F-35 — it might send a very pointed signal. Not that any in DC will sit up and take notice, of course.
“I can understand why the government would want the military to buy and use US made equipment. It makes sense from a national perspective.”
Then refrain from faking a fair competition.
I think the rules are there to provide for ‘fair’ competition for US contractors. Not sure that anyone expected LM to partner with Airbus and produce a better aircraft. Threw them a curve.
However; with wins like this, who needs losses?
By losing the competition Airbus has come out ahead because the tanker program has only cost BA money. Like Starliner. Like every current commercial aircraft – Boeing is resting on the laurels of the products and designs that came before current mgmt got in there.
On a side note:
I remember reading that when the 787 was launched, engineering at BA went to mgmt with the design and said “It’s going to cost X to make this aircraft”.
The bean counters turned around and said “No. You’re going to make it for Y” which was much less than X. Let the cost cutting begin…
The rest is history.
(You have to be smart enough in life to know, what you don’t know. Why pay professional engineers to do things, when you don’t listen to them. I don’t think that the crop of aircraft guys at BA was incompetent – so why ignore what they are telling you? The Boeing C-suite boys stuck it’s dick in the fan, then stepped all over it with spiked golf shoes, then threw it out the window for the dog to chew on. Egotistical idiots…)
Goodness, I’m surprised that Scott allowed your final analogy…but I’m sure glad he did 🥳
It must be Christmas time
Daily Beast link to how the GE disciples of Welsh operated is a good article to read.
Even though the book ” Flying Blind” is competitive with Scotts Book, I would suggest for the Seattle Locals to pick up the Seattle Times Sunday dec 12 edition if only for the local magazine insert known as PACIFICNW. It has an excellent extract of the book and from my own inside knowledge is quite accurate. Its about 8 pages with a few Photos.
FWIW – both before and after I retired in 1995 from the 777 program, I had good- great dealings with Alan M- and a few others.
I would call Flying Blind complementary with Air Wars, not competitive.
Agree- my choice of words could have been better. Interesting that it took about 20 years and a lot of investigation to flesh out many details and some of the reasons Boeing faltered. And of course I fit into the ‘ they were winning when I left ‘ 😉
Agreed- should have used better comparison. Noted that when finding book(s) on kindle, several ‘ airplane’ books have the same or similar titles.
Even so- well done- obviously lots of time and effort in digging up facts and data over the last twenty years or so. Of course, having retired while working on the first 777 I fit the meme ” Boeing was a great company overall before I left … :))
And for non-Seattle-locals, there’s internet:
-> “How did a company that had prided itself on its engineering prowess, that had perfectionism in its DNA, go so wildly off course?”
Link to the Seattle Times report
The US Air Force was not looking for a tanker that could be use for transport. Airbus was the one saying it could be use for transport. They did not have the platform for replacing KC 135. Many people forget how small KC135 is compared to A330-200. The General who awarded the 2nd contract to Airbus went on to work for EADS after he was fired.
“The KC-Y competition was bitter and repetitive.” (beginning of seventh sentence);
“KC-Y: Northrop Wins, GAO voids the award” (headline of fourth part);
Both should be KC-X.
Finland has selected the F-35A for its next combat aircraft
On the subject of underhand tactics to try to manipulate the market, the Bridge Tanker circus is only a prelude to another show.
The first of 3 flight-test A321XLRs is about to roll of the production line, with certification flights to start next year. In will be amusing to see to what extent BA tries to thwart the certification process by continuing to voice its “concerns” over conformal fuel storage 😏
I won’t be surprised if the A321XLR enters service ahead of the derivative jet under development by BA. I feel sorry for TC’s mission impossible – looking for a clear answer from BA – to pin fog on a wall.
A bit of history going back to 1992 re Boeing, McDonnell Douglas (MCD ),Taiwan, and Gatt92( WTO ), Tankers 2001-2011 and including the 2004 Navy 737-P8-Poseidon program.
This in an attempt to flesh out a few facts – foulups on the Tanker mess. Dates and times are approximate.
Around 1992- MCD was considering selling about 40 percent of commercial business to Taiwan. Part of the reason was that Douglas had been unable to figure out what the DC-9 was really costing which led to the 1967 merger and the same problems continued with DC-10/11. THE MCDONNELL DOUGLAS-TAIWAN AEROSPACE DEAL (Senate – March 11, 1992)
Around 1994-1998 the 767 EWACS came on the scene, with wiring which met the EMP military standards. Also important was that the 767 retained minimum cable controls in the event of total electrical outages ( Read about the Gimli Glider for an example ) Also the basic airframe met both Military and Commercial standards at that time.
Around late 1998-2000, the sales of 767 had dropped off to the point where serious consideration of closing the line was in the wind. Then the Italian 767 tanker program came into being early 2001. At the same time, Airbus was beginning to get a bigger share of Global sales, but still Boeing did not want to start a WTO issue.
However SPEEA did start such an effort which would eventually lead to approving the filing by SPEEA a CVD ( Countervailing Duties) Petition to be hand delivered the second week in September 2001. Which turned out to be 911 !
By that time, the MDC whiz bangs had determined that ( supposedly) due to ( military ) security issues, the 767 tankers and EWACS needed to be built in Everett, delivered to ‘ Military’ side at Everett, flown to Wichita, disassembled, rewired, extra goodies installed, reassembled and delivered to ‘ buyers’ .
But as of 2001, no U.S orders for 767 tankers had been made.
Boeing had moved corporate HQ to Chicago. Dennis Hastert was Speaker of the House. Chicago boy had made good.
Rudy Deleon (Assist Sec Defense 2000-2001 ) had retired and was hired by Boeing mid 2001 probably to help push a US 767 tanker.
So after 911- the game of ‘lease” 767 tankers started with the eventual result of the Dryun-Sears cluster. ( Major back story here not included )
Boeing stepped in and stifled the SPEEA CVD petition -only to play the game several years later.
But by 2004- Boeing ” figured out ” how to build a 737-P8 plane locally with all the EMP wiring, mil spec stuff, and at a reasonable price.
So it would seem to make sense that such local knowledge re Mil specs, EMP wiring, etc would easily transfer to the KC46 tanker program being built in Everett.
The KC tanker programs IMHO have always been done on the Gillette razor mode. Sell the razor at ‘ cost ‘ and make the real money on blades for the next 50 years.
But 40 miles and a different county in distance and location resulted in a pricing model more like ” get the big bucks NOW ” to support certain golden parachutes. Put all the lower priced newbies on the spec, assembly, and wiring and testing on the program- to save even more money up front.
Wash- rinse- repeat
Nuff for now
Dennis Hastert made more than good.
I think it is important that LM-Airbus compete in the KC-Y to keep up the pressure on Boeing and also to give US taxpayers value for money. History has shown Boeing to be dishonest and many of their victories are a result of corrupt practices. May the best tanker for the USAF win in a clean fight this time!
A350. EASA has offered up a few more clues. It’s a process problem confined to limited patches. You can see in one of the photos that there is a clear line the failed area and the good bits. A wild guess would be that the gelcoat /copper mesh was laid up the wrong side down. Whatever it is it’s proof that quality control is not just a Boeing problem.
Is there a reference link available, please?
Reuters yesterday, recycled by everyone else
Link to photos??
Reuters 29 /11/21
Boeing fully supported the 2nd tanker selection process, transparency and USAF professionalism, Google shows. Until they lost. Gloves off.
I don’t understand why some people think GAO is independent.
“GAO’s mission is to serve the Congress and the American people by collecting, analyzing, and reporting on information about federal programs and services.”
Congress majority didn’t want an Airbus tanker, simple and clear. They put their GAO on track with a very specific goal & GAO served them.
Then the Hill moved the goalposts, tanker requirements. NG saw the writing on the wall & bailed out.
I can link some very surprising GAO reports. Surprising if you think they are independent. For me GAO is as indepedent as congress.
Congress didn’t move the goalposts that was the military. The bidding process is very tightly controlled, and you have to be specific in your requirements and award the contract based on what you asked for. If you issue an RFP asking for a “4 door sedan that Carries passengers and some cargo” you can’t issue more points towards an S class than a Camry because one is more powerful because that wasn’t your criteria.
There’s no doubt the US Air Force is getting the inferior plane.
But, and that’s important, that was a phyrric win for Boeing. Actually the KC46 brought them a step further to bankcruptcy.
With the writeoffs and issues Boeing has, at the price it offered the KC46, it’s hard to imagine Boeing making any profits from that deal.
Sources say Boeing has put at least 3 bn. into development (2018 number), several write downs, over 2 years delay, and really nobody, not even the Air Force itself wants more of these.
Boeing has done a great job of showing the world, to lease but the A330mttr.
You buy cheap you buy twice, it’s also true for tankers.
I think Boeing is essential for the US Civil Aerospace industry. Hundreds of suppliers, hundreds of thousands of jobs are supported by Boeing. Boeing could potentially become America’s #1 exporter again.
The company has build up a huge debt by prioritizing short shareholder / bonuses value for decade. Now the company’s biggest programs have all run into trouble.
Winning the KC-Y competition would give Boeing a badly needed shot in the arm. Boeing getting the contract seems almost seems inevitable, regardless of what specific USAF requirements.
If everyone could be honest about this, this “competition” could be closed. Boeing could supply the USAF with a better long range tanker transport. E.g. a KC46/ 767-300F/400ER based, GENX powered 210t MTOW one, with the fuel off load & cargo capability that comes with that.
Everybody happy. Except LM & Airbus, but they’ll understand the situation & can do without KC-Y easily.
A turnaround of Boeing strategy, bringing in long term value for the US industry and society, transparent financials and a executive salary structure pushing iso frustrating this, would be required. This dramatic change, that can’t be left up to Boeing itself.
If it is to be national policy to support Boeing via defence contracts then a competition is the wrong way to do it.
If it is a competion Airbus can price aggressively which means Boeing will need to price aggressively defeating the goal of supporting Boeing with a generous defence contract.
If the goal is to support Boeing find some reason why Boeing should get this military contract, say cockpit commonality with the KC46 and price it so Boeing makes good money.
The tricky bit is ensuring Boeing reinvests the profits and does not just use them for dividends and share buy-backs.
Indeed it must be frustrating for politicians supporting Boeing communities, to see Boeing partying out free cash flow. Unless they get some too. Change starts at the top..
Do not look for this “turnaround in Boeing strategy” from the people currently in control. It is still run by the same GE cost obsessed clique that caused all the disasters of the last 20 years. They will not change.
The bloviators should realize that with all the warts and wounds, Boeing was/is one of the major by $$$$ exporters of commercial ” machines ” ( aircraft ) in the U.S.
As such Boeing does meet the ‘ too big to fail category.
How many realize that from the 40’s thru the early 80’s ( approx ) there was an informal agreement between aerospace- ( commercial and military ) companies a NO poaching of engineering employees agreement. For example, in early 60’s, Boeing would NOT advertise for Engineering jobs in So Cal area. And vice versa re So cal in Seattle area. Thus the Douglas, Northrup, North American companies simply traded employees as contracts came and went. For example, I worked at Firestone GMD ( Guided Missile Division ), and when contracts were ending, the only way one could find out about Boeing was via Firestone management inviting Boeing into the factory office area to conduct interviews and make job offers. The other choices at that time were North American, Lockheed, Douglas.
Since re commercial, Boeing is now the ONLY U.S company building ” large” commercial aircraft for export-despite the now well established incompetence. Sort of the same game happened with the Northrup Flying Wing in the 50’s-they were given the option of merging with ( Convair ) Fort worth for military or else. Northrup picked the or else = Thus the Flying wings all ceased to be, and were cut up for scrap.- lesson- dont screw with the Military Industrial Complex. The basic design of the F-18 was that of Northrups’ YF-17 and demonstrated at 1973 paris airshow almost two decades later- but somehow major contract went to Douglas.. Military was still peeved re Northrup.
Bottom line – Boeing will survive- whats left in YOUR wallet ?
“The bloviators should realize….”
Question: so who exactly on this site qualifies as a “bloviator”?
As far as Boeing and it’s future, I think everyone knows it has historically been our largest exporter, and that it is too big to fail. (Sadly, it has recently also become too big to design a safe plane, too big to be honest with regulators and the public, and too big to invest in R&D and the future its own product line.)
Yes, Boeing is too big to fail. Defense and space have captive customers in the Pentagon and NASA.
But commercial aviation is a competitive business, and for the past 20 years Boeing has been slowly bleeding market share to Airbus. Boeing had about 60% at the time of the merger, and now only 35-40%. Executive compensation is largely stock options, driven by short term share prices. Any CEO who launches a $15 billion clean sheet program is depressing the stock for the next 6-7 years. The new program will not generate positive cash flow for the first 8 years, but Boeing CEO’s do not stay for more than 8 years. They don’t care what happens to the stock 10 or 15 years from now, they care what the stock does NOW.
Therefore, these CEO’s who starve the company of investment and never launch a clean sheet program are behaving entirely rationally according to how their compensation is arranged. They have huge incentives to let Boeing commercial slowly die, just as they did decades earlier with Douglas.
This applies only to the commercial part of Boeing. Defense and Space are completely different animals and seem safe from this slow death scenario.
“Boeing is too big to fail”
Depends on how you define “fail”.
– As you have pointed out, one could posit that Boeing has already failed abysmally as an engineering company, in that it seems to have lost the ability to design/certify/deliver safe and reliable products.
– As a commercial enterprise, one could similarly argue that it has already failed, in that it’s up to its teeth in debt and isn’t generating enough revenue to substantially improve its situation anytime soon.
– But any zombie entity can be kept “alive” indefinitely if it’s given enough life support; so, in that regard, it doesn’t have to “fail” — i.e. go out of existence — as long as Uncle Sam maintains enough patience to foster it.
This gives some interesting perspective on the KC-46. Some of those secret systems clearly include the situation display.
The DC-10 was not an easy aircraft to fly.
KC-46 has been released for more aircraft. Biggest gap is the F-35A
and F-22. Vision system would be at the heart of that.
Ironic the Navy/USMC avoids those problems with the Drogue system.
Would be difficult to sell to other countries if all those ‘secret systems’ had to be removed.
Or maybe they are just ‘confidential’
Umcle Sugar is coming…
“U.S. Congress boosts funding for Boeing jet fighters, ships in defense bill”
“Jet maker Boeing saw the bill increase F-15EX fighter jet funding to allow for the purchase of 17 planes. The Pentagon had requested 12 in May. Congress put funding for 12 Boeing-made F/A-18E/F Super Hornets into the bill, after the Pentagon requested zero.
Breaking a trend, the bill did not increase funding for the number of F-35 fighter jets made by Lockheed Martin.”
Surprise, surprise. Airbus for KLM?
-> “Airbus is closing towards a possible breakthrough at Dutch airline KLM, while Boeing remains in contention to keep its spot as supplier to the group’s low-cost carrier Transavia,, sources say”
Airbus: You are fired!?!
Customers want Airbus to more vigorously protect the A350 brand.
Strong words indeed!
Dealing with AAB can be “challenging” at the best of times, but he now seems to have crossed a red line in Airbus’ view.
He probably won’t accept the referenced legal opinion, either.
Maybe it’s time for a divorce.
While some posters tried to point finger at others, BA would be better to fight its own house fires.
-> “Airbus said it wants to clarify that EASA’s recent proposal for corrective steps prompted by the discovery of areas of missing expanded copper foil (ECF) on the wings of 13 A350s as a result of a production process *does not relate to the surface degradation issue.*
-> AIRBUS: “The attempt by this customer to misrepresent this specific topic as an airworthiness issue represents a threat to the international protocols on safety matters.”
It seems, in the eyes of Airbus, Qatar / Akbar crossed a line..
There was a day when Boeing excelled at engineering.
The new Boeing excels at lobbying.
Interesting story on how the GAO decisions are not to be treated as binding 
‘The White House instructed federal agencies they are under no obligation to comply with the legal decisions issued by the government’s top watchdog, saying in recent guidance the auditor’s rulings come from the legislative branch and are therefore not binding on the executive branch’
I understand that it come after more recent Supreme Court decisions over the executive branches powers
The tangled web has become more tangled.
-> “F-35 ‘Green Glow’ Can Impact Night Ops, USAF Investigation Shows”
I always knew the KC-46 would be late and over budget. The KC-767 just showed that Boeing couldn’t build a tanker that worked as advertised. Of course this is just adding to the long list of Boeing failures which I won’t list but we all know what they are. This is what you get when a company gets obsessed with their share price and profit margins