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Northrop lobbying Congress hard over tanker win
April 1, 2008 / 10:54 PM / in 10 years

Northrop lobbying Congress hard over tanker win

NEW YORK (Reuters) - Northrop Grumman Corp is systematically lobbying members of the U.S. Congress to build support for its victory in a controversial contest to supply refueling tankers for the U.S. Air Force.

Northrop, which teamed up with Airbus parent EADS to clinch the first stage of the $35 billion program, is facing an official protest from losing bidder Boeing Co and threats from some lawmakers to block funding of the deal.

“We’re making our way through them,” said Paul Meyer, vice president of Northrop’s air mobility systems unit, referring to individual members of Congress. “We are going to be very prevalent and stay focused in front of the press to make sure the facts are always on the table.”

Boeing, which was widely expected to win the tanker contract, has faulted the Air Force’s decision-making process.

Meanwhile, its congressional supporters -- chiefly from the states of Washington and Kansas, where Boeing has its main plane-making plants -- have accused the Air Force of exporting jobs and endangering national security by awarding the job to the Northrop/EADS team.

Northrop, which plans to adapt an Airbus A330 jet into a tanker for the U.S. Air Force, has countered that no U.S. jobs or military technology will be sent abroad.

“We’re not going to spend any time on ... the states of Washington and Kansas, because they have a vested interest in a different outcome,” Meyer said on a conference call with Wall Street analysts on Tuesday. “But everyone else we are systematically going through.”

The surprise announcement in February sparked a war of words between Boeing and Northrop and their respective supporters, through speeches in Congress, on television and in prominent newspaper ads.

Boeing has protested the award to the nonpartisan Government Accountability Office (GAO), which is expected to rule on the case by mid-June. Northrop cannot perform any work on the tanker until the GAO rules on the matter.

But even if Boeing’s protest fails, Congress has the power to block funding for the deal, which would effectively overturn the contract. That sets up a battle between two politically savvy companies to win hearts and minds in Washington.

OBAMA WEIGHS IN

The tanker award has also surfaced in the U.S. presidential campaign race.

Democratic candidate Barack Obama said on Tuesday that the government should try to “prioritize” U.S. companies in the selection process. “It strikes me that we should have identified a U.S. company that could do it,” Obama said during a campaign stop in Wilkes-Barre, Pennsylvania.

Shortly afterward, Northrop said in a statement Obama “may not be fully informed” and that the tanker contract will support 48,000 American jobs, including 800 in Pennsylvania.

Boeing is based in Obama’s home state of Illinois.

Rival Democrat Hillary Clinton has said she was troubled the contract went to a team that includes Airbus, which is being sued by Washington at the World Trade Organization.

Republican candidate John McCain has faced questions about the contract because some of his campaign advisers lobbied on behalf of EADS last year.

Another Northrop salvo in the war of words between it and Boeing came in the form of a letter sent to Secretary of Defense Robert Gates from 22 former Air Force generals. It urged him to stand by the Air Force’s decision to select the Northrop/EADS team, in the face of “scurrilous and politically motivated attacks.”

Air Force acquisition chief Sue Payton and two top Air Force generals underscored the importance of the tanker program -- the service’s No. 1 acquisition priority -- during testimony to a House Armed Services subcommittee on Tuesday.

Payton said she hoped a protest filed by Boeing would be resolved quickly and said she remained confident the Air Force had conducted the selection process fairly.

Reporting by Bill Rigby; additional reporting by Andrea Shalal-Esa in Washington; editing by John Wallace and Tim Dobbyn

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