Gates 'disappointed' at bid to thwart US partners of EADS

9th June 2010, Comments 0 comments

US Defense Secretary Robert Gates said Wednesday he was "disappointed" at attempts to discourage US firms from joining the European aviation giant EADS in a contest for a new US aerial refueling tanker.

EADS has found US partners for its bid against American rival Boeing but said it would not name them for fear they could come under political pressure.

Some advocates of Boeing in the US Congress have argued that allowing EADS, the parent of Airbus, to win the contract would undermine the US defence industry and national security.

"We want a fair and open competition for the tanker. And frankly efforts to discourage US companies from participating in the competition do not help us," Gates told reporters in London.

"So I was very disappointed to hear some of the comments that were made," he said, apparently referring to lawmakers' remarks.

He said he hoped for "a fair, transparent competition," and that the US Air Force would "finally get a tanker", after years of false starts and controversy.

The high-stakes contest between EADS and Boeing has dragged on for years and been plagued by scandal, intense lobbying in Congress and transatlantic trade tensions.

Last week, EADS CEO Louis Gallois told reporters in London that the company had found the partners it needed "but we don't give the names because we don't want to put them under pressure".

EADS and its former US partner, Northrop Grumman, originally won the contract in February 2008, but the deal was cancelled after Boeing successfully appealed the decision to Congress.

In 2003, the Pentagon awarded a contract to Boeing but later suspended the deal after an ethics scandal involving an Air Force official.

Last month, in a potential setback for EADS, the US House of Representatives adopted a bill that would force the Pentagon to factor in allegedly illegal Airbus subsidies when it decides the tanker contract.

Under the proposal, the Pentagon might have to adjust EADS's bid to account for any subsidies it received from the EU, which could give Boeing an advantage in the contest.

In March, the WTO issued a confidential ruling on US allegations that European governments had illegally subsidized Airbus, part of a long-running subsidy battle between the United States and the European Union.

The US and EU governments have remained tight lipped about the ruling; both Boeing and Airbus have claimed victory.

A WTO ruling on a counter-complaint brought by the EU against US aid for Boeing is expected by late June.

Proposals for the tanker from each firm are due by mid-July to replace an aging fleet of Boeing KC-135 Stratotankers that date back to the 1950s.

© 2010 AFP

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