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scbriml
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2009 KC-X Tanker Part II

Sun Nov 01, 2009 8:08 pm

This thread is a continuation of the first part, which was getting too long.

Part I can be found here: 2009 KC-X Tanker Modernization Program (by Zeke Sep 25 2009 in Military Aviation & Space Flight)

I would take this opportunity to remind members of a couple of our rules:

All posts must be respectful of other members. Debate the topic, not the other member.

Either post facts backed-up with reputable sources, or make it clear what you're saying is your opinion. The moderators have been somewhat relaxed in applying the rules in this forum, but this particular topic has generated some very robust debate. If you cannot backup your "facts" or you don't make it clear you're expressing an opinion, posts will be deleted.

Enjoy!  smile 
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kc135topboom
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RE: 2009 KC-X Tanker Part II

Mon Nov 02, 2009 1:14 pm



Quoting Scbriml (Thread starter):
I would take this opportunity to remind members of a couple of our rules:

All posts must be respectful of other members. Debate the topic, not the other member.

Either post facts backed-up with reputable sources, or make it clear what you're saying is your opinion. The moderators have been somewhat relaxed in applying the rules in this forum, but this particular topic has generated some very robust debate. If you cannot backup your "facts" or you don't make it clear you're expressing an opinion, posts will be deleted.

Thanks Scbriml.

Zeke, the link you provided about the Boeing Boom is a paid to view site. I cannot go there.
 
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zeke
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RE: 2009 KC-X Tanker Part II

Tue Nov 03, 2009 2:38 pm



Quoting KC135TopBoom (Reply 1):
Zeke, the link you provided about the Boeing Boom is a paid to view site. I cannot go there.

You can if you pay. As I originally posted, it was a subscription only article.
We are addicted to our thoughts. We cannot change anything if we cannot change our thinking – Santosh Kalwar
 
Lumberton
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RE: 2009 KC-X Tanker Part II

Tue Nov 03, 2009 10:29 pm

Dr. Thompson's article (linked) is something to ponder. My theory is that NG is trying to neutralize the politics--both Boeing's advantage in votes in the Congress and the potential for an adverse WTO ruling against EADS. (Anyone out there that still thinks this is about pallets?) The big question is IF...big IF...EADS (no, not NG, sorry) decides to try the same gambit they successfully performed the last time and threaten to walk, will the USAF follow after and kiss their @$$ again to stay in the game?

BTW, Gen Lichte retires soon. Will that have an impact? From what I read in the media, he has been a big supporter of the airbus.

http://www.lexingtoninstitute.org/ta...mman-thinks-it-cant-win?a=1&c=1129

Quote:
From Northrop Grumman's perspective, this is the worst of both worlds. On the one hand, the superior performance features of its plane get little credit. On the other hand, it has to offer a competitive price on a plane that is intrinsically more expensive to build and operate than the smaller Boeing tanker, at least on a per-plane basis. To make matters worse, Boeing and its backers are invoking a recent World Trade Organization finding that Airbus commercial transports were illegally subsidized to cast doubt on whatever price Northrop actually does bid. So unless the Boeing plane fails to meet some mandatory requirement, Northrop figures its rival is almost certain to win. And after what happened the last time around, Boeing isn't in a mood to make any concessions. Given the high risks associated with an 18-year, fixed-price contract, Northrop Grumman may not bid at all unless there are changes to the process.

"When all is said and done, more will be said than done".
 
redflyer
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RE: 2009 KC-X Tanker Part II

Wed Nov 04, 2009 2:12 pm



Quoting Lumberton (Reply 3):
The big question is IF...big IF...EADS (no, not NG, sorry) decides to try the same gambit they successfully performed the last time and threaten to walk, will the USAF follow after and kiss their @$$ again to stay in the game?

My personal opinion is that 1) they won't try the same tactic, and 2) if they do try the same tactic it will backfire.

The reason I don't think they will try it is because the last time around the purchaser was still stinging from the Boeing scandal and they were willing to do anything to ensure two vendors were involved in the process to at least give the appearance that the contract was competitively bid so that it would appear the taxpayer was getting their money's worth. Add to it the fact that their biggest proponent - Sen. McCain - was a staunch Boeing basher and EADS/NG knew the Air Force would bend over backwards to kiss their a$$.

This time around the landscape has changed. Boeing's scandal is a distant memory; we're in the midst of a huge economic downturn (read job losses); the WTO has essentially said that Airbus doesn't play the fair competitive game; and with the trillions in government spending going on, people are simply going to be pissed off if any taxpayer money goes offshore (you and I know that's not the case, but that's how it will read when the experts spin this). Finally, McCain & Co no longer hold sway over this deal like they did last time.

If EADS/NG were to whine and say they're not going to bid because the deal is stacked against them, I suspect the Air Force will tell them goodbye and to come back and try again in 10 year's time when KC-Y is put out to bid.
My other home is in the sky inside my Piper Cherokee 180.
 
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kc135topboom
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RE: 2009 KC-X Tanker Part II

Wed Nov 04, 2009 2:29 pm



Quoting RedFlyer (Reply 4):
If EADS/NG were to whine and say they're not going to bid because the deal is stacked against them, I suspect the Air Force will tell them goodbye and to come back and try again in 10 year's time when KC-Y is put out to bid.

That is correct. There is no reason for the USAF to be kissing EADS-NA's a$$ this time around. I wonder if EADS realizes this?

Crying about the specs. the USAF needs will not do anything for either Boeing or NG/EADS. The customer has sent a strong message this time around the new tanker WILL BE built to USAF specs., noit Boeing's, and not EADS's.

I doubt NG will want to walk away from the KC-X deal, but they are not calling the shots here. EADS is.

EADS will attempt to save face to loosing the USAF tanker deal by saying it did not compete.
 
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EPA001
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RE: 2009 KC-X Tanker Part II

Wed Nov 04, 2009 2:33 pm



Quoting RedFlyer (Reply 4):
the WTO has essentially said that Airbus doesn't play the fair competitive game

That is bold statement to make RedFlyer since the report of the WTO has not even been published.  Smile And if the rumors hold any truth at all, both sides will get something out of the complaint (about 70% of US claims were supposedly not upheld, but the US was still quite happy with the 30%)

And the EU-protest at the WTO has not even been ruled upon, let alone a detailed explanation published, but indications are (rumors again) that most of what the EU protested against, could be upheld which would be a more serious blow to the US case.

But let's not speculate on this until both rulings are in and published. So we can also not let them play a decisive part in this bid. Although they can be used (misused?) to create a certain political climate to stear the order to Boeing. Sadly enough that usage or mis-usage of the political climate has been the case on this tanker deal since the first KC767 award by the USAF which in the end turned out to be a fraud.  Sad
 
redflyer
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RE: 2009 KC-X Tanker Part II

Wed Nov 04, 2009 4:05 pm



Quoting EPA001 (Reply 6):
Quoting RedFlyer (Reply 4):
the WTO has essentially said that Airbus doesn't play the fair competitive game

That is bold statement to make RedFlyer since the report of the WTO has not even been published.

Okay, fair enough. But the ruling has been handed down, at least an interim one, no? Perhaps the "official" report is still lying in wait, but we know that in the interim ruling it was determined that Airbus received illegal launch aid. Regardless, we can eliminate this part of the argument, above, altogether and it won't change the the current landscape that EADS/NG finds themselves in at the moment. The focus last time around, at least from all the public haggling that occurred, was to ensure two players who would compete for the contract. This time around the center of gravity seems to be focused on getting the Air Force a mission capable airplane for the best value. I still think if EADS/NG threatens to walk away they will only be cutting off their nose to spite their face. (But I still don't think they will.)
My other home is in the sky inside my Piper Cherokee 180.
 
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par13del
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RE: 2009 KC-X Tanker Part II

Wed Nov 04, 2009 10:54 pm



Quoting Lumberton (Reply 3):
Quote:
From Northrop Grumman's perspective, this is the worst of both worlds. On the one hand, the superior performance features of its plane get little credit. On the other hand, it has to offer a competitive price on a plane that is intrinsically more expensive to build and operate than the smaller Boeing tanker, at least on a per-plane basis.

Well, that was always the case, even on the civilian front the A330 is more a/c than the 767 hence more expensive, however, in their last victory, the Air Force valued the increased capabilities over the higher price.

Quoting KC135TopBoom (Reply 5):
Crying about the specs. the USAF needs will not do anything for either Boeing or NG/EADS. The customer has sent a strong message this time around the new tanker WILL BE built to USAF specs., noit Boeing's, and not EADS's.

Not being too technical, but they still have the same problem, other than the 737 and A320, neither OEM has "similar" a/c in their inventory, essentially that is their trade mark, one up the competition with a larger model. To make a competiton between two dis-similar a/c the Air Force will have to play with numbers, so what's to stop the politico's from doing the same thing?

The one thing EADS / NG may have on their side is that some influential Air Force brass wants the A330, so they may as well see how far they are willing to push for their "preferred" product, selecting Boeing the second time around will put egg on their face, and to some people, saving face is very important, especially if you want the money dealers to continue to listen to you.

All in all interesting times ahead.
 
keesje
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RE: 2009 KC-X Tanker Part II

Thu Nov 05, 2009 10:41 am

I wonder if some of the A330-200F specifics will be taken over for the KC-X proposal. Nose lnding gear deck and cargo door.. However it seems the new RFP doesn't award capabilities to much so propbably not. http://www.youtube.com/watch?v=zkV2f31wFt4
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kc135topboom
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RE: 2009 KC-X Tanker Part II

Thu Nov 05, 2009 1:34 pm



Quoting EPA001 (Reply 6):
Quoting RedFlyer (Reply 4):
the WTO has essentially said that Airbus doesn't play the fair competitive game

That is bold statement to make RedFlyer since the report of the WTO has not even been published.



Quoting RedFlyer (Reply 7):
Okay, fair enough. But the ruling has been handed down, at least an interim one, no?

There cannot be different reports between the interim report and the final report. To do anything else will bring the WTO's politics into question. The final report will reflect what the interim report said, except go into more detail. That can only hurt EADS/Airbus even more than the interim report did.

Quoting Par13del (Reply 8):
Quoting Lumberton (Reply 3):
Quote:
From Northrop Grumman's perspective, this is the worst of both worlds. On the one hand, the superior performance features of its plane get little credit. On the other hand, it has to offer a competitive price on a plane that is intrinsically more expensive to build and operate than the smaller Boeing tanker, at least on a per-plane basis.

Well, that was always the case, even on the civilian front the A330 is more a/c than the 767 hence more expensive, however, in their last victory, the Air Force valued the increased capabilities over the higher price.

What do you mean "superior performance"? The A-330 is 40% bigger than the B-767-200 is. Of course the bigger airplane will have more range, pax load, ect. But that is not waht the US taxpayers want. The USAF doesn't need the bigger airplane, whether the A-330 or B-777. They need a more capable, faster, and more manuverable airplane as the new tanker at the best price. In each case, the KC-767 fit the bill.

Quoting Par13del (Reply 8):
Quoting KC135TopBoom (Reply 5):
Crying about the specs. the USAF needs will not do anything for either Boeing or NG/EADS. The customer has sent a strong message this time around the new tanker WILL BE built to USAF specs., noit Boeing's, and not EADS's.

Not being too technical, but they still have the same problem, other than the 737 and A320, neither OEM has "similar" a/c in their inventory, essentially that is their trade mark, one up the competition with a larger model. To make a competiton between two dis-similar a/c the Air Force will have to play with numbers, so what's to stop the politico's from doing the same thing?

That is not the USAF's problem. Each OEM offered the airplane they thought best fit the RFP. Airbus did have another product they could have offered that closely matched the B-767-200, it was their A-310-300, but they did not offer it.

Quoting Par13del (Reply 8):
The one thing EADS / NG may have on their side is that some influential Air Force brass wants the A330, so they may as well see how far they are willing to push for their "preferred" product, selecting Boeing the second time around will put egg on their face, and to some people, saving face is very important, especially if you want the money dealers to continue to listen to you.

Many of those Generals were retired because of ethics problems, like Moseley was. Light is retiring soon. But there were as many, if not more other USAF senior officers who preferred the B-767.

This time around is going to be based on what the last compitition should have been, the lowest price, without jocking around false numbers to get the answer they wanted to show to Congress.

There are just two factors that will make this decision;
1. The new tanker must meet ALL 373 mandatory specs. to be considered.
2. The lowest price with all factors accurately calulated*.

* if the price of two, or more offers are within 1% of each other, only then will the tie breaker, or "run-off" come into play. That will be the new tanker that meets the highest scored number of non-mandatory specs., based on the cumlitive scoring of each of those non-mandatrory specs.

Quoting Keesje (Reply 9):
I wonder if some of the A330-200F specifics will be taken over for the KC-X proposal. Nose lnding gear deck and cargo door.. However it seems the new RFP doesn't award capabilities to much so propbably not.

No, it will not. If EADS decides to compete the A-330F, it will still have to meet all the requirements I outlined above. The first and most important spec. to meet is that of the tanker mission, all other "add on" missions are secondary.
 
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EPA001
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RE: 2009 KC-X Tanker Part II

Thu Nov 05, 2009 2:13 pm



Quoting KC135TopBoom (Reply 10):
The final report will reflect what the interim report said, except go into more detail. That can only hurt EADS/Airbus even more than the interim report did.

No, it will hurt the US case much more. The US case is presumably going to be hurt much more since the vast majority of the rumors on both protests are signaling that most of what Airbus does which was protested by the US will be declared legal en most of the things the EU protested on regarding Boeing will be upheld as well. On the US protest against the EU/Airbus, much more information is known since that decision, though still to be published, is further in the process. 70% of what the US protested on will be rejected by the WTO, and the US-protest was on the A380 financing only. So it can not be relevant to the KC-X at all. The EU protest listed many issues against the financing of Boeing as whole.  Wink

But again, all this is highly speculative and is best left out this already highly complicated bid as none of the consequences that the final ruling on both protests might have, are known to any of us. They will be bigger then only this bid for sure.  Wink
 
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kc135topboom
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RE: 2009 KC-X Tanker Part II

Thu Nov 05, 2009 7:37 pm



Quoting EPA001 (Reply 11):
Quoting KC135TopBoom (Reply 10):
The final report will reflect what the interim report said, except go into more detail. That can only hurt EADS/Airbus even more than the interim report did.

No, it will hurt the US case much more. The US case is presumably going to be hurt much more since the vast majority of the rumors on both protests are signaling that most of what Airbus does which was protested by the US will be declared legal en most of the things the EU protested on regarding Boeing will be upheld as well. On the US protest against the EU/Airbus, much more information is known since that decision, though still to be published, is further in the process. 70% of what the US protested on will be rejected by the WTO, and the US-protest was on the A380 financing only. So it can not be relevant to the KC-X at all. The EU protest listed many issues against the financing of Boeing as whole.

The interim report was pretty much against EADS and the European Government substides. The report talks mostly about the A-380 funding, but also inplied funding on the A-340/A-330 project and A-300/A-310 project. Only the A0-320 so far has escaped.

The interim report is not rumors. I don't see where 70% of the US protest was rejected.

The US protest was on all Airbus airplanes, not just the A-380.

The EU protest against Boeing is a seperate case and won't be rulled upon for more than a year from now.

Do you honestly believe that the US politicians, who will be looking for votes from unemployed voters next year will let the USAF not consider the WTO ruling?

Quoting EPA001 (Reply 11):
They will be bigger then only this bid for sure.

That I agree with.
 
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kc135topboom
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RE: 2009 KC-X Tanker Part II

Fri Nov 06, 2009 4:29 pm

It is interesting to note that Boeing's lawyers, who are involved with this WTO protest have a good insite as to the actual discussions and what will and what will not be in the final report issued from the WTO. It will essentially be the same as the interim report we all have now scene.

The WTO cannot change its report at all from the interim report, no matter how hard the EADS, French, German, Spainsh, and British lawyers try.

Here is the link and reasons why they cannot change. I know that many of you already have made up your minds this is a Boeing blog, and will be in denial of the facts. But facts are fact.

http://www.fleetbuzzeditorial.com/2009/11/04/wto-ruling/
 
astuteman
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RE: 2009 KC-X Tanker Part II

Sun Nov 08, 2009 8:43 am



Quoting KC135TopBoom (Reply 13):
But facts are fact.

http://www.fleetbuzzeditorial.com/20...ling/

Facts are indeed facts.
It's difficult to see where this biased editorial fits in with any discussion about facts, though.

Rgds
 
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kc135topboom
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RE: 2009 KC-X Tanker Part II

Sun Nov 08, 2009 2:21 pm



Quoting Astuteman (Reply 14):
Facts are indeed facts.
It's difficult to see where this biased editorial fits in with any discussion about facts, though.

While I agree this is a pro-Boeing link, it does however bring true unbiased facts to the day light. In this case from lawyers who are actually involved in the WTO cases. Pro-EADS sites also do the same thing occasionally.
 
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zeke
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RE: 2009 KC-X Tanker Part II

Sun Nov 08, 2009 2:57 pm



Quoting KC135TopBoom (Reply 15):
In this case from lawyers who are actually involved in the WTO cases.

If they are involved with the case, they would know better than to talk about a confidential interim finding before it is made public. That is how people end up in goal.
We are addicted to our thoughts. We cannot change anything if we cannot change our thinking – Santosh Kalwar
 
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kc135topboom
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RE: 2009 KC-X Tanker Part II

Sun Nov 08, 2009 3:44 pm



Quoting Zeke (Reply 16):
Quoting KC135TopBoom (Reply 15):
In this case from lawyers who are actually involved in the WTO cases.

If they are involved with the case, they would know better than to talk about a confidential interim finding before it is made public. That is how people end up in goal.

Correct, except in this case they are commenting on publicly released information, which is the WTO interim ruling released in September.
 
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zeke
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RE: 2009 KC-X Tanker Part II

Sun Nov 08, 2009 5:34 pm



Quoting KC135TopBoom (Reply 17):
Correct, except in this case they are commenting on publicly released information, which is the WTO interim ruling released in September.

It has not been made public. If it was, you could provide me with a link to it on the WTO website like all their other public rulings.

The point about INTERIUM rulings, is they are there for both parties to comment on BEFORE the final ruling appropriately amended and released to the public.
We are addicted to our thoughts. We cannot change anything if we cannot change our thinking – Santosh Kalwar
 
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kc135topboom
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RE: 2009 KC-X Tanker Part II

Mon Nov 09, 2009 7:11 pm



Quoting Zeke (Reply 18):
Quoting KC135TopBoom (Reply 17):
Correct, except in this case they are commenting on publicly released information, which is the WTO interim ruling released in September.

It has not been made public. If it was, you could provide me with a link to it on the WTO website like all their other public rulings.

The WTO site is difficult to navigate through. I could not find what I was looking for. But there are several news outlet links I will provide.

http://www.marketwatch.com/story/wto...ng-airbus-trade-dispute-2009-09-02

http://www.reuters.com/article/politicsNews/idUSTRE58A5N720090911

Quoting Zeke (Reply 18):
The point about INTERIUM rulings, is they are there for both parties to comment on BEFORE the final ruling appropriately amended and released to the public.

If the decision has already been made by the WTO, why would they need further comments from either party? Isn't that what the initial discussions were for? The lawyers on both sides have already put the cases to the WTO.
 
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zeke
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RE: 2009 KC-X Tanker Part II

Mon Nov 09, 2009 9:06 pm



Quoting KC135TopBoom (Reply 19):

The WTO site is difficult to navigate through. I could not find what I was looking for. But there are several news outlet links I will provide.

You cannot find anything as it has not been released, it is a draft report and is confidential.

Quote:
The WTO has issued an interim report in a long-running spat between the US and the EU over airline subsidies, media sources reported last week. The confidential ruling, which was said to have largely found in favour of Washington, could impact a pending US military deal for refuelling tankers worth an estimated US$ 35 billion.

from http://ictsd.org/i/news/bridgesweekly/55268/

Quote:
The ruling is preliminary and kept confidential while the U.S. government, the E.U., Boeing and Airbus comment on it.

from http://www.lloyds.com/CmsPhoenix/DowJonesArticle.aspx?id=439928

Quoting KC135TopBoom (Reply 19):
If the decision has already been made by the WTO, why would they need further comments from either party?

The WTO has not ruled yet, this is a draft/interium/pleminary or whatever other term you may wish to use. They get feedback on the draft before from the parties involved before the final ruling is made and it is released to the public.

I do not expect the final ruling to be made until some time after the draft/interium/pleminary findings from the EU case against the USA is released, what we hear so far is very one sided. I wonder if people like yourself will be as supportive of the WTO then that decision is handed down and finds what the US has been doing illegal again (that would not the first time the WTO has ruled against Boeing's business practices)

Keep in mind that EADS/Airbus performed its development work under a WTO sanctioned agreement between the EU and the USA on large civil aircraft (which the US government agreed to), it was the US government that unilaterally withdrew from the that WTO agreement against the terms of the agreement.

The US government subsequently took the EU to the WTO for what was done within the terms of that agreement. At no stage do you see US lawmakers or Boeing refer to the WTO agreement on large civil aircraft that was in place at the time.
We are addicted to our thoughts. We cannot change anything if we cannot change our thinking – Santosh Kalwar
 
redflyer
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RE: 2009 KC-X Tanker Part II

Mon Nov 09, 2009 9:24 pm



Quoting Zeke (Reply 20):
The WTO has not ruled yet, this is a draft/interium/pleminary or whatever other term you may wish to use. They get feedback on the draft before from the parties involved before the final ruling is made and it is released to the public.

Actually, Zeke, I think the purpose of the draft/interim ruling is to let both sides know how the WTO is going to rule on the particular case, and then allow the parties to see if they can come to a settlement on their own and avoid further litigation. But you are right in that the report - or any report of any kind - has not been released. The WTO simply notified both sides of their findings and in the WTO's mind they hope the parties will settle without further litigation.

Quoting Zeke (Reply 20):
I do not expect the final ruling to be made until some time after the draft/interium/pleminary findings from the EU case against the USA is released,

I don't think the two cases are tied to one another and are being looked at as individual and separate matters, which is to say the final ruling on the first claim will come out regardless of what the status is on the second claim. (But I could be wrong.)
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Arniepie
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RE: 2009 KC-X Tanker Part II

Mon Nov 09, 2009 9:47 pm

Looks like it will be B767 vs A330, 777 option seems to be abandonned by Boeing for now.

http://blog.seattlepi.com/aerospace/archives/184522.asp

Quoting from the article:

Boeing will offer a 767-based aerial refueling tanker to the U.S. Air Force and not a 777-based tanker, Leeham News and Comment predicts.

Boeing executives have talked up a possible 777-based tanker since a competing team of Northrup Grumman and EADS won the previous tanker competition in large part because their Airbus A330-based tanker was larger than Boeing's 767-based entrant. The Pentagon threw out that result after congressional auditors found serious flaws in the process.

Leeham says Boeing will stick with the 767 because:

* It cannot afford another new airplane program right now;
* It has already spent billions to develop the KC-767 tanker for the international market;
* The 777 is more open to allegations that it benefited from illegal subsidies, potentially weakening that argument against the Northrop-EADS tanker;
* It has enough problems with the KC-767;

* A Boeing executive already has said the company is "leaning" toward the 767;
I agree with Leeham for the above reasons and also because the Air Force's draft request for proposals:

* Puts more of an emphasis on the lowest-priced plane that meets the basic need, with little advantage for extra capacity;
* Would not give the 777-based tanker extra credit over the A330-based tanker for the fact that it could offload 30 percent more fuel;
* Has timelines that could be tough for a 777-based tanker to meet;
* Has a fixed-price requirement that would drive up the risks for a 777-based proposal.

[edit post]
 
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zeke
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RE: 2009 KC-X Tanker Part II

Mon Nov 09, 2009 10:16 pm



Quoting RedFlyer (Reply 21):
I don't think the two cases are tied to one another and are being looked at as individual and separate matters, which is to say the final ruling on the first claim will come out regardless of what the status is on the second claim. (But I could be wrong.)

I would disagree, I do see this being settled in the form a new agreement on the development of large civil aircraft. The two WTO cases in my view just reinforce what was in the previous agreement, it will end up being a waste of time for political point scoring.

The US and the EU are very well aware that this is no longer a two player market, in the next 5 years you will have the best part of 5 vendors offering products that are at the lower end of the Boeing/Airbus product line, many with larger aspirations.

The way aircraft development is done in China for example if highly state subsidized from development, manufacturing, through to purchasing.

Quoting ArniePie (Reply 22):
Looks like it will be B767 vs A330, 777 option seems to be abandonned by Boeing for now.

As expected, other point against the 777.
- not enough time to develop the new tanker (previously stated by Boeing to be around 4 years)
- not enough production slots
- cost
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EPA001
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RE: 2009 KC-X Tanker Part II

Mon Nov 09, 2009 11:00 pm



Quoting Zeke (Reply 23):
would disagree, I do see this being settled in the form a new agreement on the development of large civil aircraft. The two WTO cases in my view just reinforce what was in the previous agreement, it will end up being a waste of time for political point scoring.

The US and the EU are very well aware that this is no longer a two player market, in the next 5 years you will have the best part of 5 vendors offering products that are at the lower end of the Boeing/Airbus product line, many with larger aspirations.

I can only agree with this post. That is exactly how it is going to end. Indeed a waste of time in a time where other threats to Airbus and Boeing are emerging around the world. The production lines from Airbus in China, and probably Embraer too, are significant and are also an attempt to slow down the Chinese how are certainly capable of developing an airliner industrial complex on their own.
 
Lumberton
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RE: 2009 KC-X Tanker Part II

Mon Nov 09, 2009 11:08 pm



Quoting Zeke (Reply 20):
The WTO has not ruled yet, this is a draft/interium/pleminary or whatever other term you may wish to use. They get feedback on the draft before from the parties involved before the final ruling is made and it is released to the public.

Which is why I think DOD has been so guarded in their statement that they won't consider the WTO issue--yet! Here's a column authored by Dr. Loren Thompson today. Of course, those that don't like what he's saying will cry "bias", just like the FleetBuzz Editorial.

http://www.lexingtoninstitute.org/ta...thinks-subsidies-matter?a=1&c=1129

Quote:
It is important to recognize that the argument over illegal subsidies is really between Boeing and Airbus (or between the United States government and the European Union), and that Northrop Grumman is a bystander that has been dragged in because Airbus made the plane it wants to use for its tanker. But once the controversy is seen for what it is -- a trade dispute -- it becomes obvious that Boeing is right and Airbus is wrong. European governments have violated free-trade rules by subsidizing Airbus for decades, providing benefits that an impartial panel of trade experts has determined to be illegal, and as a result of those benefits U.S. companies have lost hundreds of billions of dollars in sales. America's share of the global market for airliners has been cut in half as a direct result of these unfair practices.

Boeing and the U.S. Trade Representative argue convincingly that the availability of illegal launch subsidies has given Airbus huge pricing advantages in competing against Boeing in commercial markets -- advantages that are worth many times the original face value of the subsidies. The Airbus rejoinder that Boeing gets unfair advantages from military work or state and local aid is not convincing, since Airbus gets those benefits too. In fact, the year the WTO case was brought, Boeing and Airbus had roughly equal military sales. And Boeing makes another persuasive point too: how can the Pentagon simply ignore the position of the U.S. Trade Representative, when trade deficits are destroying the value of the dollar and the military is planning to conduct many more competitions for weapons systems based on commercial products available from overseas sources?

"When all is said and done, more will be said than done".
 
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kc135topboom
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RE: 2009 KC-X Tanker Part II

Mon Nov 09, 2009 11:39 pm



Quoting Zeke (Reply 20):
Quoting KC135TopBoom (Reply 19):

The WTO site is difficult to navigate through. I could not find what I was looking for. But there are several news outlet links I will provide.

You cannot find anything as it has not been released, it is a draft report and is confidential.



Quoting Zeke (Reply 20):
The WTO has not ruled yet, this is a draft/interium/pleminary or whatever other term you may wish to use.

No, that is the ruling from the WTO.

Quoting Zeke (Reply 20):
I wonder if people like yourself will be as supportive of the WTO then that decision is handed down and finds what the US has been doing illegal again (that would not the first time the WTO has ruled against Boeing's business practices)

Actually, I am not a fan of the WTO. Exactly what is the US doing illegally? The ruling released has nothing to do with Boeing's, or Airbus's business practices. It is about illegal government subssidies for developing commerical aircraft.

Quoting ArniePie (Reply 22):
Looks like it will be B767 vs A330, 777 option seems to be abandonned by Boeing for now.

http://blog.seattlepi.com/aerospace/...2.asp

The Boeing web site is not showing this. Boeing does not have to make a decision to offer the KC-777 right now. It has up until the offers are due to the USAF next spring (assuming the KC-X program stays on schedule). It would not make sense to show NG/EADS their hand right now. This is only speculation on Leelaws part. I think they are at least half right, though. Boeing will compete some version of the KC-767

Quoting Zeke (Reply 23):
Quoting RedFlyer (Reply 21):
I don't think the two cases are tied to one another and are being looked at as individual and separate matters, which is to say the final ruling on the first claim will come out regardless of what the status is on the second claim. (But I could be wrong.)

I would disagree,

No, this case is about the illegal government subsidies, the other one is about how much business Boeing, or EADS is doing with government/military contracts, and the property tax issues.

This second WTO case is still about a year away from a ruling. This ruling is suppose to be formerly released by the end of this year, or early next year.
 
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zeke
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RE: 2009 KC-X Tanker Part II

Tue Nov 10, 2009 12:58 am



Quoting Lumberton (Reply 25):
Which is why I think DOD has been so guarded in their statement that they won't consider the WTO issue--yet!

I have read recently that Ashton Carter, the under secretary of defense for acquisition, has ruled it out. If they include one, you have to include both in fairness. The case against the US will have adverse implications for Boeing.

Quoting KC135TopBoom (Reply 26):
No, that is the ruling from the WTO.

No, it is a draft. Final rulings are made public, and are available from the WTO.

Quoting KC135TopBoom (Reply 26):
Exactly what is the US doing illegally?

Things you forget ....
http://news.bbc.co.uk/2/hi/business/4709814.stm
http://www.america.gov/st/washfile-e...60512105255ebyessedo0.5097467.html

Quoting KC135TopBoom (Reply 26):
The ruling released has nothing to do with Boeing's, or Airbus's business practices.

And how do YOU know what is in the CONFIDENTIAL draft ?

Quoting KC135TopBoom (Reply 26):
It is about illegal government subssidies for developing commerical aircraft.

Again, how do YOU know what is in the CONFIDENTIAL draft ?

Quoting KC135TopBoom (Reply 26):
The Boeing web site is not showing this.

Does not mean much at all. Boeing has a lot of junk on their web sites.

Quoting KC135TopBoom (Reply 26):
This second WTO case is still about a year away from a ruling

Actually some say 3-6 months.

Quoting KC135TopBoom (Reply 26):
This ruling is suppose to be formerly released by the end of this year, or early next year.

It may, or may have another draft released. Nothing is guaranteed, the WTO ruling is not final.
We are addicted to our thoughts. We cannot change anything if we cannot change our thinking – Santosh Kalwar
 
Lumberton
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RE: 2009 KC-X Tanker Part II

Tue Nov 10, 2009 10:25 am



Quoting Zeke (Reply 27):
I have read recently that Ashton Carter, the under secretary of defense for acquisition, has ruled it out. If they include one, you have to include both in fairness. The case against the US will have adverse implications for Boeing.

I see posters here assuming that the WTO will rule for the EU in the case against the US. What if they don't?

BTW, IF Ashton Carter did rule it out, or was quoted as saying something that could conceivably be interpreted that way, do you honestly think that would stand or that he has the last word in any way? Of course not!
"When all is said and done, more will be said than done".
 
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zeke
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RE: 2009 KC-X Tanker Part II

Tue Nov 10, 2009 11:23 am



Quoting Lumberton (Reply 28):

I see posters here assuming that the WTO will rule for the EU in the case against the US. What if they don't?

The WTO will, for the same reason it ruled in favor of the US. Under the US/EU large civil aircraft agreement both the EU and US agreed to funding civil aircraft projects in ways which are by strict definition are against WTO rules.

The "funding" in the US was capped under the agreement as a percentage of GDP, the US exceeded that. This "funding" was never repayable unlike the EU case which would have already been paid back.

Quoting Lumberton (Reply 28):

BTW, IF Ashton Carter did rule it out, or was quoted as saying something that could conceivably be interpreted that way, do you honestly think that would stand or that he has the last word in any way? Of course not!

The US government is bound by WTO rules in this case, they cannot unilaterally impose sanctions, they have to applied for and be issued by the WTO. The WTO will not impose sanctions until such time as the final ruling is issued, and the appeal process (if any) is complete.

Ashton Carter in a briefing on September 24 said it will be years away until this is resolved. He noted the WTO finding on the EU subsidies is an interim one, and the EU has made a counterclaim alleging Boeing received illegal subsidies from the US government. He also noted that both or either WTO rulings could be appealed.
We are addicted to our thoughts. We cannot change anything if we cannot change our thinking – Santosh Kalwar
 
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par13del
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RE: 2009 KC-X Tanker Part II

Tue Nov 10, 2009 11:31 am



Quoting Zeke (Reply 27):
The case against the US will have adverse implications for Boeing.

The case against either OEM will have adverse effects, but as it relates to the US Air Force RFP for a new tanker, I'm unsure how it will affect Boeing.
Initial "indications" are that the current draft rules against Airbus, that can be used by Boeing and its supporters to state that an Airbus a/c should not be included or considered for the RFP. The reality is that the cost of the a/c will not change much whether their is a competition or not, so far this competition has cost the US govt. money, is on its third attempt and they still have no contract for purchase.

A ruling in the Airbus case against Boeing will mean what, the WTO will force the US Air Force to eliminate an a/c produced by their own country to purchase one from Airbus?

The US is presently running the largest trade deficit among the developed countries, irrespective of any WTO ruling or case, the US has to address this imbalance for it's own economic health and long term national development, no country who presently runs a trade surplus with the US is going to do anything to change that, the US consumers will eventually run out of funds to keep purchasing if they are not creating jobs and thus wealth, so this boom cycle for exporters to the US will come to an end, one way or another.
 
XT6Wagon
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RE: 2009 KC-X Tanker Part II

Tue Nov 10, 2009 11:41 am



Quoting Lumberton (Reply 28):
I see posters here assuming that the WTO will rule for the EU in the case against the US. What if they don't?

Nah the real kicker is how much the EU is going to find out that it just threw Airbus under the bus with its protest if its upheld. Someone forgot to check and make sure that they were not offering the same "trade distorting subsidies" to Airbus that they were complaining to the WTO about Boeing getting.
 
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EPA001
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RE: 2009 KC-X Tanker Part II

Tue Nov 10, 2009 12:26 pm



Quoting XT6Wagon (Reply 31):
Nah the real kicker is how much the EU is going to find out that it just threw Airbus under the bus with its protest if its upheld. Someone forgot to check and make sure that they were not offering the same "trade distorting subsidies" to Airbus that they were complaining to the WTO about Boeing getting.

Actually is is the other way around. The US walked away from the US-EU agreement. If it backfires to them, they will have thrown Boeing under the bus.

No matter if the WTO finds irregularities in their final ruling on the US protest with the EU funding of Airbus, all RLI is payed back with interest and on the highly successful programs (A320 and original A330-A340 family) is "payed back" continuously with every copy sold. So after payback of the RLI, and of the interest due, Airbus is still paying to the subsidizing governments. Also the A350, with 500 copies ordered, will already guarantee a full pay-back of the RLI requested by Airbus from the participating governments.

It is therefore that the US protest only deals with the A380 development since this was the only airliner program being funded after the US walked away from the initial agreement. They can not protest things they themselves have agreed upon to be allowed, hence why they did not do so.

The US given aid to their aviation industry, as Zeke has correctly pointed out, was never repayable end therefore never repaid.  Wink If an irregularity is found, and in both cases that is quite likely, see again what Zeke has stated, the only backfire is in the EU versus the US case if money is concerned.

Quoting Zeke (Reply 29):
Under the US/EU large civil aircraft agreement both the EU and US agreed to funding civil aircraft projects in ways which are by strict definition are against WTO rules.

 
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par13del
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RE: 2009 KC-X Tanker Part II

Tue Nov 10, 2009 12:49 pm



Quoting EPA001 (Reply 32):
The US given aid to their aviation industry, as Zeke has correctly pointed out, was never repayable end therefore never repaid.

I guess you will have to define "The US" for that statement to be accurate, certainely the states that gave concessions are repaid each year as the companies are taxed for as long as they remain in the state and continue production, it may not be "defined" to each individual a/c but the company can certainely break down it's continuing tax liability to the state at an a/c level like the EU does with Airbus. It will throw the thread off track, but the biggest grip for the US side is the launch aid, money up front or lower taxes up front, start building with your money, or start building with "other" money.

If you are talking about NASA funded research which is truely a US Govt. body then yeah, that is not repayable, unfortunately for the US, they make that research available to one and all, including the EU.
 
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kc135topboom
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RE: 2009 KC-X Tanker Part II

Tue Nov 10, 2009 1:58 pm



Quoting Zeke (Reply 27):
Quoting Lumberton (Reply 25):
Which is why I think DOD has been so guarded in their statement that they won't consider the WTO issue--yet!

I have read recently that Ashton Carter, the under secretary of defense for acquisition, has ruled it out. If they include one, you have to include both in fairness. The case against the US will have adverse implications for Boeing.

Do you really think Carter will have the last word on this? they would only include both if the second interium ruling come out before the USAF selects the KC-X for this round.

Quoting Zeke (Reply 27):
Quoting KC135TopBoom (Reply 26):
No, that is the ruling from the WTO.

No, it is a draft. Final rulings are made public, and are available from the WTO.

Then explain why all the news outlets seem to think the final report will somehow be much different than the interium report?

Quoting Zeke (Reply 27):
Quoting KC135TopBoom (Reply 26):
Exactly what is the US doing illegally?

Things you forget ....
http://news.bbc.co.uk/2/hi/business/4709814.stm
http://www.america.gov/st/washfile-e....html

You have got to be kidding. Did you read both links? They both deal with the same issue, which was an import tax placed by Congress and not Boeing. The tax was repealed before the interium ruling, and Boeing had almost no benefit from it, the story says the Boeing benefit was only about $180M, per year, which is almost nothing on the scale Boeing and Airbus operate on.

Quoting Zeke (Reply 27):
Quoting KC135TopBoom (Reply 26):
It is about illegal government subssidies for developing commerical aircraft.

Again, how do YOU know what is in the CONFIDENTIAL draft ?

I only know what is in the news media that reported on the interium report.

Quoting Zeke (Reply 27):
Quoting KC135TopBoom (Reply 26):
The Boeing web site is not showing this.

Does not mean much at all. Boeing has a lot of junk on their web sites.

Junk? When was the last time you looked at the EADS A-400M web site? They haven't updated it since 18 Dec. 2008, almost a year ago.

http://www.airbusmilitary.com/press.html

Quoting Zeke (Reply 27):
Quoting KC135TopBoom (Reply 26):
This second WTO case is still about a year away from a ruling

Actually some say 3-6 months.

Some say a year.

Quoting Zeke (Reply 27):
Quoting KC135TopBoom (Reply 26):
This ruling is suppose to be formerly released by the end of this year, or early next year.

It may, or may have another draft released. Nothing is guaranteed, the WTO ruling is not final.



We shall see.

Quoting Zeke (Reply 29):
Quoting Lumberton (Reply 28):

I see posters here assuming that the WTO will rule for the EU in the case against the US. What if they don't?

The WTO will,

How do you know this? Like you said, that ruling would still be confidential.

Quoting Zeke (Reply 29):
The "funding" in the US was capped under the agreement as a percentage of GDP, the US exceeded that. This "funding" was never repayable unlike the EU case which would have already been paid back.

Okay, what exactly funds did the US Government provide for the B-707, B-727, B-737, B-747, B-757, B-767, B-777, and B-787?

The NASA research? That research is available to all OEMs, including EADS/Airbus. So is the US Government subsidizing Airbus, too?

Quoting Zeke (Reply 29):
Quoting Lumberton (Reply 28):

BTW, IF Ashton Carter did rule it out, or was quoted as saying something that could conceivably be interpreted that way, do you honestly think that would stand or that he has the last word in any way? Of course not!

The US government is bound by WTO rules in this case, they cannot unilaterally impose sanctions, they have to applied for and be issued by the WTO. The WTO will not impose sanctions until such time as the final ruling is issued, and the appeal process (if any) is complete.

Actually, I believe the US will have some 60 or so days to change anything the WTO says needs to be changed before the WTO can issue sanctions. That time would begin after all appeals are concluded. The EU has the same time period, should the ruling be against them.

Quoting Zeke (Reply 29):
Ashton Carter in a briefing on September 24 said it will be years away until this is resolved. He noted the WTO finding on the EU subsidies is an interim one, and the EU has made a counterclaim alleging Boeing received illegal subsidies from the US government.

With the appeal process, he may be right, it will take years. The EU still has to prove their accusation.

What you seem to ignor, Zeke, is the Boeing lawyers know much more than Carter does. Maybe you don't accept the fleetbuzz stary as fact, because it is a pro-Boeing site. But, that still does not mean you are right, or even know what you are talking about. I think in this case the Boeing lawyers may know just a little more than you do, and the fact the EU lawyers, who normally like to play out their case in the press, have been very quite. Don't yopu find that odd? Of course you don't.

Quoting EPA001 (Reply 32):
No matter if the WTO finds irregularities in their final ruling on the US protest with the EU funding of Airbus

"Irregularties" and "illegal" are two different things. But we will see what the WTO says, won't we?

Quoting Par13del (Reply 33):
If you are talking about NASA funded research which is truely a US Govt. body then yeah, that is not repayable, unfortunately for the US, they make that research available to one and all, including the EU.

Correct.
 
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zeke
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RE: 2009 KC-X Tanker Part II

Tue Nov 10, 2009 2:14 pm



Quoting Par13del (Reply 30):

The US is presently running the largest trade deficit among the developed countries, irrespective of any WTO ruling or case, the US has to address this imbalance for it's own economic health and long term national development, no country who presently runs a trade surplus with the US is going to do anything to change that, the US consumers will eventually run out of funds to keep purchasing if they are not creating jobs and thus wealth, so this boom cycle for exporters to the US will come to an end, one way or another.

I could not agree with you more. If the US wants to purchase the KC-767 for that reason, fine go ahead an do it, just call a spade a spade, do not pretend to hold an open competition.

I would love the USAF require Boeing and NG to come with a SDD aircraft in 18 months, and run all 300+ mandatory requirements, refuel aircraft, do ferry trips etc, and then do a real evaluation. If they cannot do that, the current paper exercise is a waste of time.

BTW the US also hit China up in the WTO with a similar complaint to what they hit the EU up with.

Quoting XT6Wagon (Reply 31):
Nah the real kicker is how much the EU is going to find out that it just threw Airbus under the bus with its protest if its upheld. Someone forgot to check and make sure that they were not offering the same "trade distorting subsidies" to Airbus that they were complaining to the WTO about Boeing getting.

From the WTO definition of a "Subsidy" that the EU is complaining about :

(i) a government practice involves a direct transfer of funds (e.g. grants, loans, and equity infusion), potential direct transfers of funds or liabilities (e.g. loan guarantees);

(ii) government revenue that is otherwise due is foregone or not collected (e.g. fiscal incentives such as tax credits)(1);

(iii) a government provides goods or services other than general infrastructure, or purchases goods;

(iv) a government makes payments to a funding mechanism, or entrusts or directs a private body to carry out one or more of the type of functions illustrated in (i) to (iii) above which would normally be vested in the government and the practice, in no real sense, differs from practices normally followed by governments;

Quoting Par13del (Reply 33):
I guess you will have to define "The US" for that statement to be accurate, certainely the states that gave concessions are repaid each year as the companies are taxed for as long as they remain in the state and continue production,

Under the WTO, the US government is one entity, it includes sub-national governments, public bodies, and state-owned companies. A subsidy is defined to have been made when it is at the direction of a government or any public body within the territory.
We are addicted to our thoughts. We cannot change anything if we cannot change our thinking – Santosh Kalwar
 
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Stitch
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RE: 2009 KC-X Tanker Part II

Tue Nov 10, 2009 7:14 pm

I admit to continually being amazed that a dual-buy is not being pushed in Congress. Unemployment is anywhere from 10-30% depending on what statistics you use and a new study says that 30 million people are chasing 3 million available jobs.

Considering how many hundreds of billions the US government has spent to "stimulate" the economy, what is another few score to buy an initial tranche of 200 KC-767s and 100 KC-30As over the next decade-plus? Picking both not only saves the "tens of thousands" of jobs supporting the 767 program, it also saves the "tens of thousands" of jobs who build parts for the A330 program. And it generates new jobs on the KC-30A/A332F FAL. And new construction jobs building said FAL. And new support jobs necessary to keep said FAL running. And the new engineers GE will hire to update the CF6-80 engine for the KC-30A which will also make the GE engine more attractive on passenger A330s which means job security for the CF6 workers plus perhaps new ones being added. And Pratt might be adding engineers and staff for the KC-767, as well.

Honestly, it just strikes me as a no-brainer.
 
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kc135topboom
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RE: 2009 KC-X Tanker Part II

Tue Nov 10, 2009 8:42 pm

Stitch, our Congress has already spent us into bankruptcy with all these huge and as yet unfunded bills they pass. Adding two new tankers to the USAF will increase O&M funding as well as training costs.

I beleive the KC-X program could be canceled at together and simply reengine the KC-135E. That is by far the cheapest option, and will put some people back to work.

But putting large amounts of people to work on large government buys will someday end. It is not a long term help to the economy, it is a short term shot in the arm.
 
Lumberton
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RE: 2009 KC-X Tanker Part II

Tue Nov 10, 2009 11:00 pm



Quoting Zeke (Reply 29):
The WTO will, for the same reason it ruled in favor of the US.

I don't know how you know this. I don't recall a final decision for the U.S.

I certainly haven't read the WTO favoring the EU in its complaint.

So...how do you know this?
"When all is said and done, more will be said than done".
 
Ken777
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RE: 2009 KC-X Tanker Part II

Tue Nov 10, 2009 11:45 pm



Quoting Zeke (Reply 35):
I would love the USAF require Boeing and NG to come with a SDD aircraft in 18 months, and run all 300+ mandatory requirements, refuel aircraft, do ferry trips etc, and then do a real evaluation. If they cannot do that, the current paper exercise is a waste of time.

Why? 18 months is nothing, as the last RFP showed.

Why not just ensure that the political side is satisfied, that the tanker drivers consider it the best option and finish up now.

Simple fact is that the tanker will continue to compete for federal (taxpayer) dollars for the life of the contract. As long as there is no minimum order quantity let's just get the cheapest option ordered, built as it's affordable and then move to the 787/350 platform when they are stabilized.

And lets continue to re-engine the KC-135s when money isn't available for a full new tanker.

Quoting Zeke (Reply 35):
Under the WTO, the US government is one entity, it includes sub-national governments, public bodies, and state-owned companies. A subsidy is defined to have been made when it is at the direction of a government or any public body within the territory.

Difficult argument for most Yanks to accept as states here fight for jobs with tax relief and other benefits. There is also some "non-monitary" competitive efforts, like being a "right to work" state. How do you calculate those factors? And do we need to include the EADS/NG "benefits" from states as well?

Quoting Stitch (Reply 36):
I admit to continually being amazed that a dual-buy is not being pushed in Congress.

We don't have the money for a dual buy. We might have some money for a slow acquisition of one line, but other government expenditures (including DoD spending) is competing for every government dollar, and even the ones we do not have.
 
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Stitch
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RE: 2009 KC-X Tanker Part II

Wed Nov 11, 2009 12:45 am



Quoting Ken777 (Reply 39):
We don't have the money for a dual buy.

Of course we do. The US Government literally prints it every day and the world keeps buying up the securities that back it.





People snipe at EADS and Airbus as "glorified national jobs programs", but what is the primary argument for choosing the KC-767 based on? Not using government money to off-shore jobs to Europeans.

Alabama isn't fighting for the KC-30A because they want to keep Europeans employed. They're fighting for it because they want to employ Alabamans. And other states with companies who are A330 family suppliers are fighting for the KC-30A because they want to keep their citizens employed, as well. Because employed people buy things which helps keep other people employed and generates tax money which flows back into the state's coffers to fund other things. It's why the KC-30A has more support in Congress than just two Senators and seven Representatives from Alabama.

And it's not just about jobs. EADS and it's various companies have kept Europe relevant in the aerospace sector. With Boeing offshoring so much of the 787's production, having Europe send some A330 work over here for those displaced machinists is a nice perk, IMO.
 
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zeke
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RE: 2009 KC-X Tanker Part II

Wed Nov 11, 2009 7:29 am



Quoting Stitch (Reply 36):
Honestly, it just strikes me as a no-brainer.

Logic and politics do not seem to follow, unless it is as obvious as a stain on some girls blouse.

Quoting KC135TopBoom (Reply 37):
That is by far the cheapest option, and will put some people back to work.

It is not the cheapest option, that kind of statement totally ignores the high level of maintenance needed for a VERY old feet.

Quoting Lumberton (Reply 38):
So...how do you know this?

It is a matter of public record for example in the US that Boeing has received tax relief from various governments, that clearly falls into the WTO definition of a subsidy "government revenue that is otherwise due is foregone or not collected (e.g. fiscal incentives such as tax credits)"

The next WTO ruling will just see how far the upper level of the subsidies go, e.g. the public bodies like NASA, EXIM bank etc.

Quoting Ken777 (Reply 39):

Why? 18 months is nothing, as the last RFP showed.

If both camps are as advanced as far as they claim, they should both be able to put together a complaint SDD article in 18 months. It would be a true measure of real risk and current performance as well.

I see aircraft design and manufacturing like the investing, past performance is not indicative of future performance.

Quoting Stitch (Reply 40):

And it's not just about jobs. EADS and it's various companies have kept Europe relevant in the aerospace sector. With Boeing offshoring so much of the 787's production, having Europe send some A330 work over here for those displaced machinists is a nice perk, IMO.

Well said, Boeing has had this public lie out there for some time, they have move more jobs overseas in the last 10 years then they have created. Almost every moth this year I have seen statements from Boeing laying off workers in the US, this has nothing to do with the tankers.

Boeing/Vought actually make quite a number of component's for the A330 as well, EADS gets over 40% of all its components from the US.
We are addicted to our thoughts. We cannot change anything if we cannot change our thinking – Santosh Kalwar
 
astuteman
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RE: 2009 KC-X Tanker Part II

Wed Nov 11, 2009 6:58 pm



Quoting Lumberton (Reply 25):
Of course, those that don't like what he's saying will cry "bias", just like the FleetBuzz Editorial.

They might not be wrong, of course.......

Quoting Par13del (Reply 30):
Initial "indications" are that the current draft rules against Airbus, that can be used by Boeing and its supporters to state that an Airbus a/c should not be included or considered for the RFP

What's interesting about this is that I haven't seen anything in the interim report that says the A330 specifically benefitted from "illegal" subsidies. Which is relevant if..

Quoting ArniePie (Reply 22):
Leeham says Boeing will stick with the 767 because:

* It cannot afford another new airplane program right now;
* It has already spent billions to develop the KC-767 tanker for the international market;
* The 777 is more open to allegations that it benefited from illegal subsidies, potentially weakening that argument against the Northrop-EADS tanker;

this statement is correct.

If Boeing themselves think the 777 option is at risk due to claims of "illegal" subsidies, and the rule is that no airframer receiving "illegal" subsidies for ANY of their airframes should be allowed to bid, then perhaps the US DOD will be waiting a LONG time for its new tankers...  scratchchin 

Rgds
 
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par13del
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RE: 2009 KC-X Tanker Part II

Wed Nov 11, 2009 7:08 pm

Once the US walked away from the initial agreement and filed a case at the WTO, the EU responded with their case, which is where the 777 got caught, depending on how long this drags out, a tit for tat could include the 787, 350, even the A380, one never knows how these things will play out.

Quoting Astuteman (Reply 42):
If Boeing themselves think the 777 option is at risk due to claims of "illegal" subsidies,

Makes one wonder why they think this if the Air Force has already stated that the WTO ruling will play no part in their RFP, if one product is immune certainely the other should be as well, negates the WTO issue on both sides.
 
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kc135topboom
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RE: 2009 KC-X Tanker Part II

Wed Nov 11, 2009 9:36 pm



Quoting Ken777 (Reply 39):
lets continue to re-engine the KC-135s when money isn't available for a full new tanker.

I agree, that is the cheapest option, and the KC-135R has among the highest MCR in the USAF, going between 88% and 92%.

Quoting Stitch (Reply 40):
Quoting Ken777 (Reply 39):
We don't have the money for a dual buy.

Of course we do. The US Government literally prints it every day and the world keeps buying up the securities that back it.

The printing of money will eventually bite us in the a$$ be causing run away inflation. I don't know how much longer the Chinese and japanese will continue to buy our securities and bonds.

Quoting Astuteman (Reply 42):
If Boeing themselves think the 777 option is at risk due to claims of "illegal" subsidies, and the rule is that no airframer receiving "illegal" subsidies for ANY of their airframes should be allowed to bid, then perhaps the US DOD will be waiting a LONG time for its new tankers...

I don't think the B-767 (or B-757, developed at the same time) had any illegal subsidies used in its developement, back in the late 1970s and early 1980s.
 
Arniepie
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RE: 2009 KC-X Tanker Part II

Wed Nov 11, 2009 11:17 pm

Looks like John Mc Cain is putting some big questionmarks again at the way the DoD has established its criteria to select the new tanker.
Seems like there is some fear that this will be a rigged competition all over again.

http://blog.al.com/live/2009/11/hold_2.html

Quoting from the article:
John McCain raises questions on Air Force tanker contest between Boeing and Northrop

U.S. Sen. John McCain, R-Ariz., wants answers from the Pentagon on how it intends to pick a winner for the U.S. Air Force tanker contract.

mccain.jpgView full size(AP File Photo)Sen. John McCain, R-Ariz. on Air Force tanker program: "I am keenly interested in ensuring that the source selection in this program is subjected to proper and effective oversight from the start."McCain, a key player in the Air Force's decade-long tanker saga, laid out a detailed list of concerns in an Oct. 29 letter to Defense Secretary Robert Gates. A copy of the 2-page letter was obtained by the Press-Register.
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He asked Gates to elaborate on the technical criteria the Air Force will use to evaluate bids on the potential $40 billion contract.

"Given the history of the KC-X program, I am keenly interested in ensuring that the source selection in this program is subjected to proper and effective oversight from the start," wrote McCain.
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Northrop in recent weeks has suggested it could sue -- or even boycott the competition -- if its concerns with the draft RFP are not resolved.

The company is arguing that the Air Force's new selection criteria put a premium on price instead of capability, diminishing the advantage of its larger KC-45 tanker and skewing the contest toward Boeing's smaller, cheaper KC-767 jet.

"From Northrop Grumman's perspective, this is the worst of both worlds," said defense analyst Loren Thompson of the Lexington Institute in Arlington, Va.

"On the one hand, the superior performance features of its plane get little credit. On the other hand, it has to offer a competitive price on a plane that is intrinsically more expensive to build and operate than the smaller Boeing tanker, at least on a per-plane basis."

McCain appeared to echo those concerns, asking Gates to explain why the Air Force trimmed its list of mandatory requirements from more than 800 in the first competition to 373 in the rematch.

He also asked why the Air Force honed in on fuel efficiency and military construction costs associated with each bid, noting that those factors, taken alone, would likely favor a smaller airplane.

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"Boeing simply cannot afford another new airplane program right now," said Hamilton, adding that the company has already spent billions developing its KC-767 for customers in Japan and Italy. "Financially, it makes far more sense to offer this airplane to the Air Force."

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While Gates' office could not be reached for comment on McCain's letter late Tuesday, top Pentagon officials have consistently defended their approach to the new competition. They've also indicated they're willing to make changes to the selection criteria.

""I would imagine that we are going to consider some change to the RFP," Air Force Secretary Michael Donley told Aviation Week for a story published Monday. "We think it is a strong RFP and we think the main outlines of it are very well put-together. But, we continue to get questions."

[edit post]
 
tommytoyz
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RE: 2009 KC-X Tanker Part II

Thu Nov 12, 2009 12:22 am



Quoting KC135TopBoom (Reply 37):
I beleive the KC-X program could be canceled at together and simply reengine the KC-135E. That is by far the cheapest option, and will put some people back to work.

Anyone claiming that new tankers are cheaper than simply keeping and re-engineing the existing tankers, better be able to show that calculation. I find it very hard to believe a new tanker would be cheaper than keeping and/or upgrading the old ones. The Air Force should spend money to develop and source domestic Biofuel for it's jets, so as not to be dependent on foreign oil to fuel it's planes. That would be a militarily and economic benefit.

If it's about jobs, it's far cheaper to just give the money to the workers as unemployment benefits and retrain them, than to employ them on military contracts. Doubly so because military planes are not productive in any way for the country or society. So building military aircraft for the sake of employment makes no economic sense.

Developing alternative Biofuels for jets, widening roads and bridges, laying down new rail tracks, etc... those offer an economic benefit, beyond employment and so might make economic sense to spend money on, but not building military aircraft.

In my opinion, new tankers will not be needed for a very long time, because the existing ones will all be good till at least 2040 and most well beyond that. The existing KC-135's can be significantly improved by adding winglets, reducing their fuel consumption by another 7%.

From Wiki:
"The Air Force projects that E and R models have lifetime flying hour limits of 36,000 and 39,000 hours, respectively. According to the Air Force, only a few KC-135s would reach these limits before 2040, but at that time some of the aircraft would be about 80 years old. The Air Force estimates that their current fleet of KC-135s have between 12,000 to 14,000 flying hours on them-only 33 percent of the lifetime flying hour limit"

And the USA has what, over 500 of them right now? That should be enough for anyone till 2030 at least. Who knows, perhaps by then the next generation of military aircraft might have technological breakthroughs allowing for far greater range, thus reducing demand and requirements for in-flight refueling and thus tankers. Tankers would also be more advanced and thus more productive than ones based on 767s or A330s.
 
wingman
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RE: 2009 KC-X Tanker Part II

Thu Nov 12, 2009 2:03 am

I still don't get all this silly arguing. France, Germany and Spain are buying European made planes for their transport needs just as the US should buy US made planes for its refueling needs. I find it absolutely incredible that our government would seriously entertain shoveling another $100B+ across the Atlantic to fuel an already outrageous trade deficit with the EU just when our own economy can afford it the least. Completely insane. Everyone does the wink wink nod nod on military procurement from China and Russia to France and Germany. Why in the heck we should be any different is pure nuts.
 
ThePointblank
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RE: 2009 KC-X Tanker Part II

Thu Nov 12, 2009 10:02 am



Quoting Tommytoyz (Reply 46):

Anyone claiming that new tankers are cheaper than simply keeping and re-engineing the existing tankers, better be able to show that calculation. I find it very hard to believe a new tanker would be cheaper than keeping and/or upgrading the old ones. The Air Force should spend money to develop and source domestic Biofuel for it's jets, so as not to be dependent on foreign oil to fuel it's planes. That would be a militarily and economic benefit.

If it's about jobs, it's far cheaper to just give the money to the workers as unemployment benefits and retrain them, than to employ them on military contracts. Doubly so because military planes are not productive in any way for the country or society. So building military aircraft for the sake of employment makes no economic sense.

Developing alternative Biofuels for jets, widening roads and bridges, laying down new rail tracks, etc... those offer an economic benefit, beyond employment and so might make economic sense to spend money on, but not building military aircraft.

In my opinion, new tankers will not be needed for a very long time, because the existing ones will all be good till at least 2040 and most well beyond that. The existing KC-135's can be significantly improved by adding winglets, reducing their fuel consumption by another 7%.

From Wiki:
"The Air Force projects that E and R models have lifetime flying hour limits of 36,000 and 39,000 hours, respectively. According to the Air Force, only a few KC-135s would reach these limits before 2040, but at that time some of the aircraft would be about 80 years old. The Air Force estimates that their current fleet of KC-135s have between 12,000 to 14,000 flying hours on them-only 33 percent of the lifetime flying hour limit"

And the USA has what, over 500 of them right now? That should be enough for anyone till 2030 at least. Who knows, perhaps by then the next generation of military aircraft might have technological breakthroughs allowing for far greater range, thus reducing demand and requirements for in-flight refueling and thus tankers. Tankers would also be more advanced and thus more productive than ones based on 767s or A330s.

Metal corrosion and sourcing spare parts will become an issue in the future. Aluminum does corrode over time being exposed to various conditions, and it will be a uphill battle to replace such sections in the near future. And unlike metal fatigue, which is calculated by how long stress is applied, metal corrosion is calculated by date. In fact, with the current KC-135 fleet, as much as 30-50% of the programmed depot maintenance addresses corrosion issues. In total, ageing-related costs are expected to add at least $17.8 billion to the price of maintaining the KC-135 for 40 years. This is the equivalent of about five years’ worth of KC-X procurement at the $3.5-billion annual estimate.

The issue is not flight hours and fatigue; its maintenance cost. The KC-135 fleet is costing more and more every year to maintain and keep flying. And with the aircraft already very old, the costs to keep the KC-135 operational will increase dramatically very quickly.
 
tommytoyz
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RE: 2009 KC-X Tanker Part II

Thu Nov 12, 2009 7:05 pm



Quoting ThePointblank (Reply 48):
In total, ageing-related costs are expected to add at least $17.8 billion to the price of maintaining the KC-135 for 40 years. This is the equivalent of about five years’ worth of KC-X procurement at the $3.5-billion annual estimate.

You make my case that new tankers are far far more expensive, even ignoring the fact that your numbers do not reflect total acquisition costs. Your comparing apples to oranges. Add in total acquisition costs and see what the comparative financial figures are relative to the KC-135.

GAO Report (KC-135 acquisition costs are already paid for, thus are zero):
The operations and support costs for the KC-135 fleet are estimated to grow from about $2.2 billion in fiscal year 2003 to $5.1 billion (2003 dollars) in fiscal year 2017. That's for the fleet of 538 tanker aircraft. Far cheaper to operate per aircraft than $3.5 billion a year for only 100 new aircraft (or what number of aircraft is the budget based on you quote?). And we also know how notoriously under estimated military projects often are. So I would hike that budget by at least 50% - minimum. On the other hand, we know the costs of KC-135 pretty well as we've had them for a long time and are ongoing.

The DOD stated in 1996:
"While the KC-135 is an average of 35 years old, its airframe
hours and cycles are relatively low. With proper maintenance and
upgrades, we believe the aircraft may be sustainable for another 35 years.”
Thus, DOD planned to continue operating the aircraft until about 2030,
when they would be about 70 to 80 years old."

Getting more expensive to maintain - yes. But still far far cheaper to operate than the acquisition+procurement costs of new aircraft. And nobody is complaining that the capabilities of the KC-135 are not sufficient on a strategic basis. So on a financial and military strategic basis, new tankers make no sense.

The new tankers are being pushed by politicians, contractors, lobbyists and a few select captured military brass. But the GAO reports and common sense tell you it's an dumb project because it is not needed when we already have 538 tanker aircraft paid for and flying that are cheaper than anything acquiring and operating a fleet of new tankers.

Figures derrived from GAO report in 2004 regarding KC-135 costs
http://www.iwar.org.uk/news-archive/...ao/dod-aerial-refueling/d04349.pdf
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