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Air Force, CEOs meet over tanker

April 22, 2008|From Reuters

WASHINGTON — Air Force representatives met last week with the chief executives of Boeing Co. and Northrop Grumman Corp. to voice concern about the vitriolic tone of public statements over a $35-billion program for aerial refueling planes, two sources briefed about the meeting said Monday.

The Air Force surprised the industry by awarding the contract for new tankers to Century City-based Northrop and its European partner, EADS. The decision triggered protests from Boeing and its supporters in Congress.

Boeing Chief Executive Jim McNerney and Northrop CEO Ron Sugar met Friday with Gen. Duncan McNabb, the Air Force vice chief of staff since September, said the sources, who asked not to be named.

"There is a lot of unhappiness about how vitriolic the debate has become," one of the sources said. He characterized the meeting as "polite."

Before McNabb took his current job, he headed Air Mobility Command, the part of the Air Force that provides airlift and aerial refueling for all of the U.S. armed forces.

Boeing has protested the Feb. 29 contract award with the nonpartisan Government Accountability Office, accusing the Air Force of steering the contract to Northrop. Boeing's backers in Congress have vowed to halt funding for the deal if the appeal fails.

Chicago-based Boeing also has run a series of advertisements in U.S. newspapers condemning the Air Force's handling of the deal as "flawed by countless irregularities."

"It's really gotten ugly," said one Air Force official who spoke on the condition that he not be identified.

The GAO, which oversees federal contract disputes, has said it expects to rule on the case by June 19.

The Air Force insists that the Northrop plane, based on the A330 airliner built by EADS' Airbus unit, is the best one to replace its fleet of aging KC-135s used to extend the range of warplanes through in-flight refueling.

The Air Force declined to comment on Friday's meeting.

Both Boeing and Northrop said it was corporate policy not to comment on the schedules of their top executives.

Defense analyst Loren Thompson of the Lexington Institute in Arlington, Va., said the meeting was clearly prompted by Air Force concerns about the tanker debate.

"The tone of the tanker debate has turned so negative that Air Force leaders are concerned that it could damage their long-term relationship with Boeing," he said.

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