US airforce contract will safeguard Welsh jobs

Mar 1 2008 icWales

THE Government, business and unions were celebrating today after the US Air Force awarded a multi-billion pound contract to a US-European bid, which will help safeguard thousands of UK jobs.

The deal for Los Angeles-based Northrop Grumman and Airbus parent company EADS is worth £18 billion and EADS said it would bring £3 billion worth of extra work to the UK.

The contract for up to 179 airborne refuelling planes opens up a huge new opportunity for both companies and is a major blow to rival Boeing.

The UK will build the wings. All Airbus A330-200 wings are assembled at Broughton, north Wales while other components are made at Filton, near Bristol.

Filton is also responsible for the design of the wing and the fuel system so it has an important role to play in design changes to enable the aircraft to transfer fuel as air-to-air refuelling tankers, EADS said.

The order will help to sustain and protect around 13,000 jobs directly in Airbus UK, a further 32,000 in the UK supply chain and 90,000 linked jobs around the UK, it added.

US-based Boeing, which has been supplying refuelling tankers to the US Air Force for nearly 50 years and had been widely expected to hang on to that monopoly, could protest the decision, though the company said no decision has been made.

The Northrop-EADS refuelling tanker, the KC-45A, “will revolutionise our ability to employ tankers and will ensure the Air Force’s future ability to provide our nation with truly global vigilance, reach, and power,” Air Force General Duncan J McNabb said in a statement.

Air Force General Arthur Lichte said the larger size of the Northrop-EADS aircraft was the key to the decision.

“More passengers, more cargo, more fuel to offload,” he said.

As the winners of the first award, EADS and Northrop are in a strong position to win two follow-on deals to build hundreds more planes.

Boeing spokesman Jim Condelles said the company will not make a decision about appealing the award until it is briefed by Air Force officials. Boeing believes it offered the best value and lowest risk, he said.

The tanker deal is also certain to become a flashpoint in a heated debate over the military’s use of foreign contractors since Boeing painted the competition as a fight between an American company and its European rival.

“We should have an American tanker built by an American company with American workers,” said Republican Representative Todd Tiahrt, who represents the district in Wichita where Boeing would have performed much of the tanker work.

In Everett, Washington, a few dozen Boeing workers protested outside a Machinists Union hall holding up signs saying “American workers equal best tankers,” and “Our military deserves the best”.

Bernie Hamilton, national aerospace officer for the UK union Unite said: “This safeguards thousands of jobs at plants in Filton and Broughton.

“This contract was won against stiff competition from Boeing and reinforces the fact that the UK aerospace industry is a world leader in wing technology.

“The UK government should also be commended for its efforts in helping to win this contract.”

Robin Southwell, chief executive of EADS UK, said: “The US has selected the best tanker in an extraordinarily rigorous competition. It gives the transatlantic alliance a significant industrial boost and will secure British jobs – at Airbus in Filton and Broughton – for many years to come.”

Business Secretary John Hutton said: “This is a welcome vote of confidence in Britain’s highly competitive aerospace industry and is recognition of the world class skills and commitment shown by our aerospace workers.

“The UK – both in North Wales and Bristol – will play a vital part in the manufacture of these aircraft for the US air force.

“The massive contract will secure a number of years of work for the UK industry – benefiting not just Airbus UK, but also many other UK suppliers.”

Matthew Knowles, spokesman for the Society of British Aerospace Companies (SBAC), said: “This is an extraordinary success by the companies involved and a demonstration of the success of the UK aerospace and defence industry in contributing further billions into the British economy.

“The deal is an endorsement of our industry’s excellence and recognises the top-quality work of many thousands of highly-skilled workers in high-value jobs in the UK throughout the supply chain.”

The Society of British Aerospace Companies welcomed the order which it said would deliver huge benefits to the UK economy worth billions of pounds.

Chief Executive Ian Godden said: “This deal is excellent news for the UK aerospace industry and for the wider UK economy, bringing billions into the country and securing many thousands of hi-tech, highly skilled jobs for the long term.”