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EADS still seeking U.S. tanker partner
April 21, 2010 / 12:38 AM / 7 years ago

EADS still seeking U.S. tanker partner

PARIS (Reuters) - Airbus parent EADS EAD.PA is still in talks to find a partner to support its bid for a deal worth up to $50 billion to sell refueling planes to the United States, Chief Executive Louis Gallois said on Wednesday.

EADS North America went solo on Tuesday by announcing its intention to challenge Boeing (BA.N) for the contract after failing, according to reports, to find a key partner.

“It is indispensable to have a partner,” Gallois said at a news briefing in Paris.

The remark contrasted with statements from EADS North America officials in outlining the bid on Tuesday.

Chief Executive Sean O‘Keefe said U.S. authorities had cleared EADS to perform classified work on the tanker, insisting that EADS did not need another large U.S. partner to proceed.

Gallois said EADS still wanted to find a supplier with access to sensitive technology in the United States.

“We are in discussion with a certain number of companies to have a partner but this time not in the prime contractor role.”

EADS has until July 9 to finalize its offer in the contest, triggering what analysts expect to be a ferocious battle.

EADS was part of a team led by Northrop Grumman (NOC.N) that won a previous contest in 2008. The award was overturned on appeal from Boeing, and Northrop last month pulled out of the rematch saying the rules now favored Boeing’s smaller plane.

Gallois said EADS did not share Northrop’s “too pessimistic” view but said price would be a “decisive element” in the race.

EADS North America had been spurred by the Pentagon to take the lead on a new bid, granting it access to data previously seen only by Northrop, in order to maintain competition.

“We have a chance to win. The fact that we are now prime contractor allows us to make savings,” Gallois said.

Sources familiar with the matter said EADS had lined up L-3 Communications (LL.N) and had been on the point of announcing the partnership two weeks ago before L-3 pulled out.

POLITICAL PRESSURE

Gallois expressed disappointment at comments attributed to Representative Norm Dicks, who heads the House Appropriations Defense subcommittee. The Democrat politician told The Hill newspaper last week he hoped U.S. firms would not join EADS.

“It is a curious statement. It suggests he doesn’t want competition,” Gallois said.

“This is part of the pressure that exists. But we are conducting and will conduct this battle. We will conduct it on the basis of a better product which exists.”

Gallois said the NewGen 767-based tanker offered by Boeing so far existed only on paper.

Boeing said only its tanker would meet all 372 requiremwents laid down by the Air Force and at the lowest cost, while saving $10 billion in fuel costs over 40 years compared with the A330.

Gallois dismissed French press speculation that the chief executive of Lagardere (LAGA.PA), Arnaud Lagardere, had lost interest in EADS, in which his media company owns 7.5 percent.

Lagardere, under pressure from an activist shareholder, said this week he would take all the time needed before carrying out his stated intention of selling out of EADS, a move which would force a shake-up of a sensitive Franco-German shareholder pact.

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