Governor Bob Riley (R-AL) made a speech yesterday to the Economic Development Association of Alabama at which he discussed upcoming industries moving to Alabama. He stressed his administration’s continuing efforts to move large manufacturing facilities to the state. Riley will leave office this year due to term limits.

He is hoping that EADS North America will win the KC-X contract before he does go as one of the key industrial developments for the state. Now Riley is always going to be positive about this effort right up to the time a winner is announced but it does illustrate how well EADS has built relations with leadership in Southern states that have benefited from their investment.

Riley has seen some successes with the building of a Hyundai assembly plant in the state and the ongoing construction of a steel mill by ThyssenKrupp which will open in the near future.

EADS North America, the American subsidiary of EADS (EADS:P), turned in their proposal for the KC-X aerial tanker today to the U.S. Air Force. This represents their second attempt to win the program and the Air Force’s third try.

EADS North America will base their program on a modified Airbus A330 transport aircraft. As with the previous attempt in 2008 they will assemble the aircraft at a facility in Mobile, AL. Then they will receive the necessary modifications to meet the U.S. requirements. Airbus will also assemble all of their A330 transports at this new facility if EADS does win the contract when it is awarded in November.

Boeing (BA) will also turn in their proposal by tomorrow. A third contended, U.S. Aerospace, has committed to submit a proposal by Friday if the Air Force does not grant their extension request.

In a sign that they are ramping up work on their bid for the new KC-X aerial tanker program EADS (EADS:P) announced that they are moving their proposal preparation team to new offices in Mobile, AL. If the European defense giant does win the contract they will assemble the A330 aircraft at that city and then apply the specific military modifications there or at another facility.

Reportedly EADS will concentrate about 100 workers in Mobile. They are currently based in Arlington, VA where the EADS North America headquarters is and Melbourne, FL. The Melbourne site was most likely established when EADS was working with Northorp Grumman (NOC) on their last attempt in 2008. Northrop has an aircraft modification facility there used to support the E-8 JSTARS program.

The Defense Department and Air Force expect to received proposals in July and award in the Fall. The Boeing (BA) team and their “NewGen Tanker“ is considered the only other potential offer.

The Kansas City Star has this lengthy article that describes the whole situation and explains how we got where we are with the KC-X tanker RFP. The article by Cleon Rickle may be found here. Key takeaways are:

“”I am confident Boeing can build the best plane for the Air Force, no matter the competition,” said U.S. Sen. Pat Roberts,of Kansas. “However, I urge the Department of Defense to run a fair competition and avoid coddling EADS to the detriment of American warfighters who have waited eight years for this contest to end and decades for a new tanker.”

“We will offer a modern, more capable tanker in response to the Defense Department’s decision to encourage competition for this major taxpayer investment,” said EADS North America chairman Ralph Crosby, Jr. “Our KC-45 is the only real, flying, low-risk solution that today meets the demanding Air Force air refueling requirements and is actually in production now. ”

This is an article I wrote at BNET: Government about EADS decision to submit a proposal.

“The decade-long saga to replace the KC-X aerial tanker contract begins a new chapter. The European aerospace giant EADS (EADS: P) and Airbus, its subsidiary, announced that it will definitely submit a contract proposal to the Air Force. The program will replace the aging Cold War KC-135 tankers (pictured).

Boeing (BA) thought it had won the contract for at least 179 new aircraft earlier this year when Northrop Grumman (NOC) who had bid in partnership with EADS withdrew from the bidding. Then, earlier this month, the Pentagon agreed to extend the deadline, at EADS’ request, to allow it time to submit a new bid.”

Read the rest at BNET.

In an article at the Seattle Times, Dominic Gates writes that EADS (EADS:P) is planning on offsetting some of their cost disadvantages related to the bigger aircraft and establishing a new production facility with less development. The aircraft they will offer again for the KC-X program is a modified version of the A330 MRTT already planned for Australia, Great Britain, UAE and Saudi Arabia.

The aircraft is a little behind schedule but is in test flights and will deploy the first of five aircraft to Australia this year. The U.K. ones are slated for 2011 and the two oil states will get there aircraft soon after. There will have to be some modifications to the A330 to meet U.S. Air Force needs but they should be minor. EADS feels that Boeing (BA) will have to spend more money to get their 767 based tanker ready as it does incorporate the 787 cockpit and parts of other 767 models. This means that it is not identical to the 767 tankers ordered by Japan and Italy. Japan has received three of their four aircraft while Italy has seen developmental delays and has not received any.

It is expected that the A330 will cost more to manufacture due to its size and the shipping involved to send the components to the U.S. from overseas. The bigger aircraft while capable of carrying more fuel and having a longer range then the 767 will cost more to operate and may require infrastructure investment as it is much larger then the KC-135 tankers being replaced.

Once the proposals are in it will be seen if EADS can do their pricing correctly.

EADS North America released this press release today relative to their decision to bid on the KC-X contract.

EADS North America Intends to Submit Proposal for U.S. Air Force Tanker

ARLINGTON, VA — (Marketwire) — 04/20/10 — EADS North America announced today that it intends to submit a proposal on July 9, 2010 for the U.S. Air Force’s tanker modernization program and will offer the KC-45 — the most capable, American-built solution that is flown, proven and in production now.

EADS North America is progressing in discussions with potential U.S. partners to build a winning team in order to provide the most capable, best value solution to the Air Force.

The KC-45 is the only aircraft flying today that meets the U.S. Air Force’s tanker requirements as outlined in its KC-X Request for Proposal (RFP). The KC-45 builds on the EADS-based tanker that was previously selected in 2008 by the Department of Defense and that has won the last five consecutive tanker competitions worldwide.

“We will offer a modern, more capable tanker in response to the Defense Department’s decision to encourage competition for this major taxpayer investment,” said EADS North America Chairman Ralph D. Crosby, Jr. “Our KC-45 is the only real, flying, low-risk solution that today meets the demanding Air Force air refueling requirements and is actually in production now. That fact is critical because our warfighters deserve a true best value solution.”

EADS North America will build and modify the KC-45, along with A330 commercial freighters, at an EADS North America/Airbus production facility to be constructed in Mobile, Alabama. The KC-45 program and aircraft production/modification center will create and support tens of thousands of high-value American jobs while making a long-term investment in the nation’s economy at a time when other aerospace companies are outsourcing production overseas.

“This tanker competition is all about the warfighter and the aircraft that most successfully meets their requirements. The KC-45 offers what the Air Force needs today: a modern military tanker that is in production now with deliveries beginning this year,” said Sean O’Keefe, EADS North America Chief Executive Officer. “Not only does the KC-45 offer the best value and a huge capability advantage over the competition, it also will support tens of thousands of jobs across America by expanding our nation’s industrial aerospace capacity.”

The KC-45 is the U.S. military version of the proven A330 Multi Role Tanker Transport (MRTT). To date 28 aircraft have been ordered by four U.S. allies. The MRTT has transferred more than 265,000 lbs. of fuel to a range of military aircraft — from F-16 and F/A-18 fighters to the E-3 AWACS — using the same refueling systems offered on the KC-45.

“Our aircraft has demonstrated its unparalleled capability by refueling a variety of military aircraft utilizing both boom and hose and drogue systems, as well as by operating in the receiving position. That’s a statement our competition can’t make,” said Crosby.

The Royal Australian Air Force will receive the first A330 MRTTs later this year. Additional aircraft are in production or undergoing mission-equipment outfitting for the United Kingdom, Saudi Arabia and the United Arab Emirates.

“We’re progressing forward in discussions to expand the ranks of our nearly 200 current U.S. suppliers, some of which are joining us for today’s announcement,” continued O’Keefe.

At the heart of the KC-45 is the most capable aerial refueling system operating today. The aircraft’s fly-by-wire Aerial Refueling Boom System (ARBS) has a demonstrated fuel offload rate of 1,200 U.S. gallons per minute — the only system which meets the U.S. Air Force’s requirements without further modification. The system’s proven all-electric fly-by-wire technology ensures enhanced controllability and safety that greatly aids the boom operator and receiver aircraft’s pilot.

The KC-45 also carries an all-digital hose and drogue system for probe-equipped aircraft. The under-wing refueling pods are the most modern in service today, with the capability to deliver up to 420 gallons of fuel per minute through 90-ft.-long hoses at refueling speeds from 180 to 325 knots. The KC-45 will also feature a modern fuselage refueling unit, common with that of allied MRTT users such as the United Kingdom.

About EADS North America
EADS North America is the North American operation of EADS, a global leader in aerospace, defense and related services. As a leader in all sectors of defense and homeland security, EADS North America and its parent company, EADS, contribute over $11 billion to the U.S. economy annually and support more than 200,000 American jobs through its network of suppliers and services. Operating in 17 states, EADS North America offers a broad array of advanced solutions to its customers in the commercial, homeland security, aerospace and defense markets.

Senator Jeff Sessions (R-AL) issued a press release today criticizing Washington Congressman Norm Dicks (D-WA) for his comments basically telling EADS (EADS:P) not to attempt to bid on the KC-X contract.

In the release Sessions makes clear his desire for competition in the tanker contract while continuing to support EADS who have proposed assembling the Airbus 330 aircraft in Mobile, AL. Sessions writes: “Defense companies should understand that, contrary to Representative Dick’s comments, the majority of members in the House and Senate want a robust competition engineered not to benefit a single company, but to produce the best airplane for the war fighter.”

In Sessions view having EADS submit a bid along with Boeing (BA) will only strengthen the program. The award of what will amount to a sole-source contract to Boeing if EADS or another company does not bid will be a difficult process for the Air Force leaving many different avenues for criticism. This is especially true if Boeing has their struggles down the road.

Here is the latest post I wrote for BNET: Government –

“When Northrop Grumman (NOC) announced in March that it would not bid for the new aerial tanker for the U.S. Air Froce, the KC-X, Boeing (BA) and its many supporters in Congress believed it was sure to get the $35 billion contract. Now the deadline to bid has been extended 60 days to allow the European aerospace giant, EADS (EADS:P), to submit a proposal.

There are already reports that EADS, which would seek to provide A330 airliners made by its subsidiary, Airbus, to be modified into the tankers, is talking to other defense contractors about partnering.”

The rest may be found here.

EADS North America released a statement last night about the sixty day extension granted for KC-X proposals. They stated:

“Since the Department of Defense indicated their interest in EADS’ participation as prime contractor in the KC-X tanker competition, the company has carefully assessed the many requirements necessary to participate. We have firmly indicated that a 90-day extension would be the minimum time necessary to prepare a responsible proposal for this $40 billion program. We will consider the Department’s decision to offer a 60-day extension.”

This seems to indicate that EADS may still have given themselves an option not to participate by claiming the need for ninety days vice sixty.