Jan. 10, 2022, © Leeham News: Sean O’Keefe retired from EADS/Airbus in 2014. Boeing won the re-bid contract for the US Air Force aerial refueling tanker in 2011. The third round of the tanker competitions was every bit as bitter as the second round, which Northrop Grumman/EADS won.
Boeing is in the process of producing 179 KC-46A tankers, with about half delivered. Beset by delays, technical issues, and cost overruns, Boeing nevertheless has the presumed advantage of being the incumbent supplier.
Lockheed Martin/Airbus will offer the A330-200-based MRTT tanker. Most have Rolls-Royce engines. The remainder has GE Aviation power plants. The LMXT, as the new tanker version is currently called, will be assembled in the US. If RR engines are chosen, these, too, will be assembled in the US, Lockheed says.
Although O’Keefe is no longer associated with Airbus and he is not a consultant to or otherwise advising Lockheed and Airbus, LNA asked him what he would advise if asked after benefitting from the Round 3 competition.
“Well, I guess two things. One would be an internal [Airbus] recommendation of a partnering arrangement, a collaboration, that I think would be different than what we had with Northrop Grumman,” he said. He called the Northrop relationship “a very good one. It worked out fine in many respects, and that was a beneficial opportunity here to capitalize on that. But with Lockheed Martin, it’s a whole different opportunity, frankly, that I think, is really worth plumbing. It’s going to take some very serious discussions between Airbus and Lockheed Martin to figure out how they would want to manage this.
“Northrop Grumman was a systems integrator. It was their greatest contribution to the whole effort. There’s little argument on that point, that was one of the strong suits of what we could put together in this case. Airbus envisioned at the time was to essentially have the role of being the metal bender on the airframe, and, ‘We’ll deliver a green aircraft, and you guys do all the configuration control necessary in order to respond to the customer, the Air Force in this case, that you know so well.’”
Airbus wasn’t going to try to replicate that. Rather, O’Keefe said, the plan was for the two companies to divide responsibilities.
“That was the original idea,” O’Keefe said. But after the GAO upheld the Boeing protest that the USAF improperly added criteria to the competition without informing Boeing, “It didn’t take very long before [Northrop] realized this is just not going to work, because Northrop’s view was, ‘We got other fish to fry, other things to do and, frankly, and we just don’t want to take the trip down the road on what we think could well end up being a losing proposition.’”
On the other hand, the Airbus attitude was, “We don’t lose anything in this. The mere act of making a run at this is a benefit and it really does a lot of things to institutionally build capacity and focus,” O’Keefe said. Airbus got to understand the US market better than it already did. Whether Airbus won or lost, the company would benefit. “It’s going to be something we’re going to learn a lot from and really have an opportunity to develop on this.”
Although Airbus learned a lot from the Northrop partnership and going for the contract alone was tempered by commercial factors, the KC-Y competition brought Airbus full circle.
Airbus had been watching the challenges Boeing had with the KC-46A program. Years late, billions of dollars over budget and beset with quality control and technical issues, Airbus and Lockheed joined forces in 2018 to offer the A330 MRTT to the air force in, of all things, a leasing deal. Nothing came of it then, but the partnership was set.
O’Keefe thinks lessons learned from the Northrop effort will be improved in the Lockheed partnership.
Airbus’ internal culture clashes between the French and German entities are well known. The Northrop venture allowed the European cultures to acclimate to the American culture, especially in the Deep South, in ways that would not have otherwise. Lockheed will benefit, O’Keefe said.
“I think it is better than what it would have been otherwise had we not taken the trip on this collaboration with Northrop Grumman. I think, and frankly, being in Mobile, that really changed a lot in terms of the cultural advantage. Who would have ever imagined that given the sheer volume of German engineering and everything else that transferred between and among Hamburg and Mobile that you could check into one of the best hotels in Mobile?” O’Keefe said.
“It’s an easier transition to a Lockheed Martin in the sense that they are folks that, so to speak, as engineers speak the same language.”
O’Keefe sees Lockheed Martin as more politically astute than Northrop Grumman was. Northrop, he said, was in some ways naïve about how nasty and how political the battle would become.
“Northrop Grumman really downplayed it and felt as though that was not that big a deal,” he said.
Coming up: Next week we start a series looking at the competition from the Boeing side.