Mike Mecham of Aviation Week has a thorough analysis of what’s behind the decision to close Boeing Wichita.
Contrast Mike’s story with this ridiculous analysis. It’s very, very rare that we call out someone else but this one is so far off the wall that we can’t help ourselves. (It should be noted Loren Thompson was paid by Boeing to do a report about the Airbus subsidies and the tanker competition.)
George Talbot of The Mobile Press-Register weighed in with this story.
Wichita (KS) politicians continue to grouse about the decision by Boeing to close the defense operations there and move jobs to Oklahoma City, San Antonio and Puget Sound (Seattle).
The Seattle Times has this article, quoting the Wichita mayor and other officials. The portion of the article that caught our eye is this:
“We thought we had a marriage,” said Wichita Mayor Carl Brewer, who until his 2007 election was a business manager at Spirit AeroSystems, the airplane-manufacturing operation sold off by Boeing two years earlier.
“It’s taken a lot of work for us to control our outrage,” he said. “So don’t ask me… are you outraged, because the answer will be yes, with probably another four-letter word attached to it.”
Kansas politicians feel particularly “angry and disappointed and dismayed,” as one county commissioner put it, because they led the Republican flank of the decadelong congressional push to secure the $35 billion Air Force tanker contract for Boeing.
In return they were told the company and its suppliers would generate 7,500 direct and indirect jobs after Boeing clinched the contract last February.
“We as a community demonstrated our loyalty to the Boeing Company when they asked us to stand behind them and to go fight for them,” Brewer said.
Now he’s singing a different tune. “Don’t think for one second that we are not exploring our opportunities to go out and recruit Airbus… We are making those phone calls.”
Well, that’s going to be a tough sell. During the tanker competition, Kansas politicians, notably then-Sen. Sam Brownback (now governor) and ex-Congressman Todd Tiahrt (a former Boeing employee as well) couldn’t say enough bad things about Airbus is their campaign for Boeing’s tanker. Tiahrt was particularly vitriolic, though Brownback was no shrinking violet, either.
As interested parties and aviation geeks wait for EADS to make (likely not) and announce its decision (as soon as March 4) on whether to protest the USAF contract to Boeing on the KC-X aerial tanker, more updates have come in.
First is a new market share forecast by G2 Solutions of Kirkland (WA). Next is a new updated from one of our readers, who goes by the screen name OV-099. He previously provided a detailed analysis of where he thinks EADS and Boeing came out on pricing. He updates this with more Net Present Value analysis and other economic data.
Both new items are below the jump.
Update, 10:30 PST: Loren Thompson of the Lexington Institute, who has come in for our share of criticism for his unabashed bashing of Airbus and subsidies as it relates to the KC-X competition, has this very good essay on why Boeing won.
Here is a link to Richard Aboulafia’s commentary.
We are hearing from a variety of sources a growing concern that the Air Force hasn’t been as forthcoming as it should be in its debriefs with EADS.
But Reuters moved a story a short time ago that EADS won’t protest.
The Mobile Press-Register, in a rare front-page editorial, and the Alabama Congressional delegation are complaining that the Air Force has been as forthcoming as they believe it should about why Boeing won the tanker contract. Publicly, the Department of Defense said Boeing was the “clear” winner in what had become a price shoot out. DOD, EADS and Boeing will not reveal the pricing.
One of our readers, with the screen name OV-099, provided a comment on our Dewey Defeats Truman post calculating the possible prices on the KC-45 and the KC-767.
OV-099 has been a long-time poster and when the occasion arises, does in-depth analyses on financial terms. We’ve cross-checked his work with others and found his numbers-crunching to be pretty spot-on.
With that in mind, we asked OV-099 to take a final look at his original posting with the thought of elevating it to a primary post. He has slightly revised his numbers. What follows is his analysis of how much EADS and Boeing priced their KC-45 and KC-767 in the bids to the USAF. His analysis is below the jump.
Update, 1-:30 am: OV-099 has further refined his analysis; the update is below.