European Aeronautic Defence and Space Co. on Saturday hailed its victory over arch-rival Boeing to secure a multibillion-dollar U.S. military contract and bounce back from setbacks that led to major company restructuring.
EADS, the maker of Airbus planes, and its U.S. partner, Los Angeles-based Northrop Grumman, won one of the biggest Pentagon contracts in decades Friday, worth an estimated US$40 billion (euro26 billion), to build 179 midair refueling planes.
"This is a formidable victory in the American market," EADS CEO Louis Gallois said on France-Info radio. "To beat Boeing in the American market, well, we're very proud."
The win, announced Friday in Washington, drew gasps at Chicago-based Boeing. It opens the door to the possibility of follow-up contracts for EADS. The win was the first of three U.S. awards worth up to US$100 billion (euro66 billion) over 30 years.
For Gallois, the award confirms the company's global strategy _ balancing defense and commercial sectors and increasing its presence in key markets, a statement said.
"This major selection is a win-win for our customers, for our allied industrial cooperation and for EADS," the statement quoted Gallois as saying.
The EADS-Northrop Grumman partnership won the competition in part because of the larger size of its aircraft _ the KC-30 tanker _ allowing for more fuel, more cargo and more passengers, Air Force Gen. Duncan J. McNabb said Friday.
The tanker frame is to be based on the Airbus A330 passenger jet, and final assembly will take place in Mobile, Alabama, according to EADS. Civilian Airbus A330 freighters will be assembled there, too.
"We are creating lots of jobs in the United States, but we're also creating (jobs) in Europe," Gallois said on France-Info. He did not provide figures.
Addressing concerns that the Alabama assembly site could spell more job cuts on this side of the Atlantic, Gallois, speaking on France-2 television, stressed that Europe will play a role in building the tanker, with the nose made in France, the wings in Britain and part of the fuselage in Germany.
For French President Nicolas Sarkozy, the award is a "historic success."
"After the difficulties of several months ago, EADS thus brilliantly renews with success ... and in one of the most difficult and demanding defense markets," a statement from the president's office said.
Sarkozy called Gallois to hail the deal, which underscores "the exceptional know-how of the European company, in civilian as well as defense" sectors, it said.
EADS has been weighed down by a series of problems, with the latest a delay announced in November to its A400M military transport jet. EADS said the delay could cost as much as euro1.4 billion (US$2 billion) in penalties and other charges. The slumping dollar has also been a drain.
However, the most high-profile problem dates to June 2005, with the start of a series of announcements that revealed botched management of the A380 superjumbo _ Airbus' rival to Boeing's 787 _ delaying delivery by nearly two years and hurting profits. Rolllout of Boeing's 787 has also been pushed back and is not due out until next year.
The Airbus crisis reached deep into the company structure, resulting in a change in top management and a restructuring plan that cuts 10,000 jobs and aims to recoup 2 billion euros (US$3 billion) in savings by 2010.
