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Boeing
Up in the air: Boeing has welcomed moves to delay a decision on an air-tanker deal

Obama 'might favour' Boeing over Airbus

Bill Condie, Evening Standard
11 Sep 2008


Analysts are trying to second-guess US presidential candidates' positions on the disputed $35billion (£19.96billion) US Air Force tanker deal after US Defence Secretary Robert Gates decided to delay a decision on the deal until a new president is elected.

While the deal has become a political hot potato, the position of the candidates on whether they prefer the Boeing-backed plan or one based on the Airbus platform is not entirely clear.

Complaints by Republican Senator John McCain about an earlier tanker plan triggered a probe that sent Pentagon and Boeing officials to jail. He was a strong critic of original plans to lease tankers from Boeing in a tilt at the presidential nomination in 2002.

That deal collapsed when Darlene Druyun, an ex-Pentagon procurement officer who joined Boeing, resigned and was jailed for nine months in 2004 on conflict of interest charges.

McCain also later helped pressure the Pentagon to make concessions to Northrop over issues like the plane's size.

Analysts believe Democrat Barack Obama, who comes from Boeing's headquarters state of Illinois, may favour the all-US bid.

"Given McCain's history in regard to this programme, one might handicap a slight advantage to Northrop-EADS should he be elected," New York-based Bank of America analyst Harry Nourse said in a note.

If Obama wins he could partly adopt a Buy America' philosophy, which might favour Boeing, he said.

The current contract was awarded to a consortium led by Northrop Grumman based on an Airbus aircraft.

But Boeing cried foul and found support from politicians who said the business should go only to American firms.

Boeing's appeal was upheld and a draft of new bidding rules was released in August. Boeing still isn't satisfied, saying it needs more time.

It welcomed the Gates decision while a Northrop spokesman said: "We are extremely disappointed."

But EADS chief Louis Gallois reassured investors that the delay won't affect the company's sales or earnings.

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