EADS Discussing Teaming With U.S. Defense Contractors

Reports are starting to emerge that EADS (EADS:P) and its subsidiary, EADS-North America, are discussing teaming arrangements with other defense contractors to support bidding on the KC-X RFP. The deadline has now been extended until July by the Department of Defense. Supposedly L-3 Communications (L3) is considered the front runner for this work. There is still no definite confirmation that EADS will launch a bid after previous partner Northrop Grumman (NOC) decided not to participate in this the third round of bidding for the Air Force’s new aerial tanker.

Supposedly EADS talked to Raytheon (RTN) and BAE Systems (BAE:L) about this contract. Both of these companies reportedly expressed little interest. BAE Systems is already a partner in EADS as a whole and would stand to gain some work if the A330 made by Airbus is selected by the Air Force. Raytheon has not led an effort to make a large aircraft like this but obviously has strong system integration and engineering experience. L-3 does work on aircraft and purchased Raytheon’s aircraft integration unit several years ago.

If EADS is going to bid teaming with another large, preferably American, contractor makes the most sense. They will help work with the customer using their experience with the U.S. military. That is why the original plan with Nothrop made so much sense.