Leeham News and Analysis
There's more to real news than a news release.
Leeham News and Analysis
- Bjorn’s Corner: Air Transport’s route to 2050. Part 27. June 20, 2025
- Pontifications: A Personal Note June 19, 2025
- Airbus books 142 firm orders as Boeing retracts from the Paris Air Show June 19, 2025
- AIN Media Group Agrees to Acquire Leeham News & Analysis June 17, 2025
- Five for Five: Air India crash points to systemic problems at Boeing that CEO Ortberg must fix June 15, 2025
Looking at Boeing in 2011
The Everett (WA) Herald has a good series of articles on Boeing’s outlook in 2011.
Start here. Be sure to scroll all the way down to the end of the story; there are six other related links.
There is a very good illustration on the timeline and event flow of the KC-X competition. PDF.
Inslee tanker amendment dropped for DOD Reauthorization
Update, 10:30 AM PST: We have now confirmed that the House leadership has dropped the Inslee Amendment from the Defense Reauthorization Act that will be sent to the Senate.
We also received confirmation this morning from Inslee’s office that the letter below the jump was written in advance of House action because it had been learned Section 848 might be removed from the House version of the Act.
Original Post:
It appears the so-called Inslee Amendment in the House Defense Reauthorization Act demanding the US Air Force take into account illegal subsidies provided Airbus and Boeing in the KC-X competition may be in jeopardy.
The Seattle Post Intelligencer first reported that Washington State Congressman Rick Larsen was circulating a letter to senior House members calling for the Inslee Amendment (official known as Section 848 of the Reauthorization bill) to be retained in the House version as it goes over to the US Senate for consideration.
But a close reading of the letter raises questions whether the Amendment is or isn’t currently in the Act. The House is in the process of revising the Act before sending it to the Senate for approval. Time is short for the Senate to act before the Christmas recess, and a bill that is not controversial is needed to speed things along.
The House version has a reported 300 add-on provisions that could cause debate in the Senate, including Don’t Ask, Don’t Tell, the Inslee Amendment and only the politicians in DC know what else.
The Don’t Ask provision was separated from the Act for a stand-alone vote yesterday in the House, where it passed. The Senate previously voted this down but another try is going to be made.
Outsourcing US Defense
As regular readers know, a major piece of controversy over the prospect of awarding the KC-X contract to EADS North America is the assertion that this will outsource US defense procurement to a foreign company.
We’ve noted in this space many times before that this issue, in this context, is a red herring, because the Defense Department has been doing so for years and is increasingly doing so–without the hue and cry that accompanies the prospect of EADS getting this contract.
A recent article by George Talbot of The Mobile Press-Register illustrates the outsourcing to foreign companies. While Talbot talks about EADS, because Mobile (AL) (which is, one may be reminded, part of the United States–the Confederacy did lose the Civil War) is where EADS plans to build the tanker, it is also the location of an Australian company called Austal that is poised to receive a contract to build the Navy’s Littoral Combat Ship (LCS).
EADS will likely win tanker, says Boeing consultant
Update, Dec. 9, 5:00 AM PST:
Politico has this profile on Loren Thompson.
Flight Global reports Brazil may select the KC-45 to replace its Boeing KC-137 (KC-135).
Update, 5:00 PM PST: Dominic Gates now has his story on this topic here.
Original Post:
George Talbot of The Mobile Press Register posted this story today in which Loren Thompson, an aerospace defense analyst who has done work for Boeing, says Boeing has concluded EADS is going to win the KC-X tanker competition.
In Talbot’s article, Thompson once again advances the Boeing line about WTO and Airbus’ illegal subsidies as evidence of a USAF “bias toward EADS.”
There is just one problem with this line of allegation with respect to the WTO issue:
US law doesn’t allow the USAF to take the WTO panel finding into account, and Thompson, Boeing and its Congressional supporters know it.
USAF, EADS need to come forward with full details
The USAF and EADS need to come forward with full details to fully explain the latest cock-up (a British term, not an obscene one) in which the Air Force mistakenly sent EADS and Boeing proprietary information about the other company’s KC-X submission.
EADS, the Air Force and Boeing say that when EADS and Boeing discovered the error, the companies began a procedure that has been in place for years to seal up the files and computers and to notify the USAF of the error. The Air Force initially said, in essence, “no harm, no foul.” But then in classic Wikileaks fashion, information dribbled out bit-by-bit that there was more to the story than the Air Force–and EADS–let on.
At a press conference–which we were at–EADS North America CEO Sean O’Keefe gave a detailed response to questions about the matter. But within days, it was charged by Lexington Institute’s Loren Thompson that EADS had actually opened the proprietary file but Boeing had not. He did not cite sources for his information, and his close ties to Boeing immediately raised the suspicion that Boeing leaked this information to him.
Laying the groundwork for a Boeing appeal on KC-X
Update, Dec. 1: George Talbot of The Mobile Press-Register has this interesting interview with Michael Wynne, a former top defense department procurement official, who suggests a solution to the KC-X quandary.
Also, at 12:50pm PST: Bloomberg has this story with Boeing BDS CEO Dennis Muilenberg weighing in. It seems the USAF has more ‘splainin’ to do.
Update, Nov. 30, 8PM PST: The New York Times confirms EADS opened Boeing data, Boeing did not; Boeing threatens protest.
Dominic Gates at The Seattle Times has this report.
Original Post:
In what is a wholly transparent move, Boeing is beginning to lay the groundwork for an appeal in the event EADS wins the KC-X contract.
Loren Thompson of the Lexington Institute, published a commentary yesterday (we only saw it today) entitled “Tanker flap reflects pattern of bias.” In it he makes several allegations, the most serious of which is that EADS read the proprietary document mistakenly sent by the USAF to EADS about Boeing performance data of the KC-767 but Boeing did not read the EADS document and data sent to Boeing by USAF. Thompson does not disclose how he knows this.
Snapshot: EADS press conference, mainly on Tanker and USAF faux pas
We attended a press conference today in Washington (DC) with Sean O’Keefe, CEO of EADS North America, that covered a variety of issues but focused mainly on the KC-X tanker competition and most particularly the news last week that the USAF had sent proprietary information about the Boeing and EADS tanker bids to the wrong company.
First, O’Keefe remains in the neck collar from his near-fatal airplane accident in Alaska August 9 in which former Sen. Ted Stevens (R-AK) and three others were killed. Sean and his teenage son, Kevin, were about five survivors. O’Keefe’s spirits are good and he expressed that the random nature of those killed and who survived is proof that divine intervention is “real.”
Having interviewed O’Keefe on previous occasions, we are gratified to see his recovery progressing and him back at work.
Here is a quick snaphshot of O’Keefe’s remarks:
How many ways can the USAF screw up KC-X?
Defense News has this story about the USAF sending Boeing and EADS proprietary information about each company’s bids to the other by mistake.
How else can the government screw this competition up?
If you read the post carefully, the USAF also acknowledges for the first time what we have been saying for quite a while: the award will slip to early next year.
Update: It gets worse. Dominic Gates of The Seattle Times said the information including pricing data from each company, which is key in what is a price shoot-out competition.
This could have serious ramifications.
Tanker shortage cancels Red Flag exercise
Update, Nov. 17: EADS now is predicting the tanker contract award will slip to next year. This is entirely consistent with what we have been hearing (first quarter) and what we understand Boeing believes as well.
Original Post:
A shortage of KC-135 refueling tankers, because of the high demand in Afghanistan and Iraq, forced the Air Force to cancel Red Flag, an annual exercise.
The Army Times first reported this event November 9. Strategy Page has an analysis about the aging tanker issue.
Strategy Page has a couple of obvious errors in its analysis, but the overarching point is well taken.
This illustrates the need for aerial tankers and how warfighting capability can be affected by a shortage of tankers. While the exercise was not canceled due to aging tankers, but rather competing interests, the point is nonetheless made.
Another KC-X deadline passes
Today was supposed to be the day the KC-X contract was to get its go-ahead, but as has so often been the case, another deadline has come and gone.
The USAF suggests it will be done this fall, which is through December 20. We’ve previously written we believe the award will slip to the first quarter.
Meantime, here is an interesting story on the KC-X saga. Hat-tip to Flightglobal’s Steve Trimble for spotting this one.