Takes Flight

16 Apr 2008
Noted Aviation Industry Analyst Calles Boeing's Protest "Stunning"
A noted aviation industry analyst has studied Boeing's protest of Northrop Grumman's win of an Air Force contract to build America's next generation of aerial refueling tankers, and he makes clear that "observers have been stunned by the ferocity of the rhetoric" Boeing is employing.

In an online-posting entitled, "Observers puzzled over Boeing's scorched earth approach," analyst Scott Hamilton of Leeham Company asked why Boeing is pursuing a strategy that is "all but accusing the Air Force of cooking the books and placing warfighters at a disadvantage and in danger."

Boeing's protest, in which it is trying to get the Government Accountability Office to overturn the contract, came after the Air Force determined Northrop Grumman's bid was superior in four out of five major evaluation criteria. Boeing's protest has focused on maligning the integrity of the Air Force–in an April 4 National Public Radio interview, Boeing tanker spokesman Mark McGraw accused the Air Force of manipulating data–while its apologists have made false claims that the contract means American jobs and national security are being outsourced (neither allegation is true).

Hamilton quotes Boeing spokesman Bill Barksdale as saying that Boeing thinks it's important to preserve a good relationship with the Air Force. But a baffled Hamilton raises three possible explanations for Boeing's conduct – the first being that Boeing is upset that Northrop Grumman subcontractor EADS will gain a foothold in the American commercial aviation industry. Hamilton's second thought is that Boeing is fighting the tanker program to influence union employees as contract negotiations approach, and the third is what Hamilton calls Boeing's "Nothing To Lose" theory.

Hamilton cites a Seattle Times story from April 7 that notes that Boeing "can't boast even a single prime contract to supply the U.S. Military's next generation of fighters, bombers, tankers and transport planes."

"With Boeing's relationship with the Air Force in this dismal state of affairs, Boeing may have felt there was nothing to lose by protesting and the fall-out be damned," Hamilton notes.

"Still," Hamilton writes, "what's widely regarded as vitriol has stunned the industry and observers."

To read the entire Seattle Times article, go to:
http://archives.seattletimes.nwsource.com/cgi-bin/texis.cgi/web/vortex/display?slug=boeing07&date=20080407&query=boeing

To read Hamilton's entire posting, go to:
http://www.leeham.net/default.asp?Page=26

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