Examining Airbus' U.S. Military Coup
SCOTT SIMON, Host:
Eleanor Beardsley joins us from Paris. Eleanor, thanks for being with us.
ELEANOR BEARDSLEY: Good to be with you, Scott.
SIMON: And share with us, please, the reaction to this news in Europe today.
BEARDSLEY: Well, it broke very late last night, and I think the first reaction was complete surprise because everyone thought Boeing was a shoe in. It was on the TV and radio this morning. It's on the front page of every newspaper and there's a lot of joy and pride, I mean because this is, you know, finally a European space and defense contractor getting a foothold into very lucrative American defense market, and no one expected it to happen and they've really scored big this time.
SIMON: Mr. LOUIS GALLOIS (COE, EADS) (French Spoken)
BEARDSLEY: Right, that's Gallois. Well, first of all, he called it a major coup in the American market. But then he also stressed the partnership. He said EADS didn't do it alone. They did it with Northrop Grumman and General Electric that's going to provide the motors for these tankers. So he stressed that it was the teamwork that in fact beat Boeing in the end.
SIMON: What's the European response to some people in the United States who charge that A, Pentagon - the Pentagon is essentially subsidizing the Airbus and B, potentially giving away military secrets.
BEARDSLEY: And everyone keeps emphasizing, you know, EADS is not Airbus, although Airbus planes will be used, and Northrop Grumman is really the one who signed the contract. They're the ones negotiating with the Pentagon. They're the, you know, the American foothold. So they're going to be really dealing with - it's going to be Airbus bodies of an already successful commercial plane, the A3- 3200, it's a freight plane. They're going to, you know, change these, modify them and give them all the military systems that they need, and Northrop Grumman will be in charge of doing that.
SIMON: And the analysis you're reading there, how did the EADS manage to win the contract, do you think?
BEARDSLEY: So they've sweetened the deal. They've said, we'll provide it, you know, it's going to be up to 3000 jobs in Mobile, Alabama, but by transferring the assembly of the tanker and the commercial version of that plane to the U.S., EADS is also serving its own interest because as you know, right now the powerful Euro is really hurting Airbus because planes are sold in dollars. So it's been looking to outsource, it's been looking to transfer some of its manufacturing to the dollars that are in the U.S. anyway. So that card obviously worked. In some way, it swayed the deal in some way.
SIMON: Eleanor Beardsley in Paris. Thanks so much.
BEARDSLEY: Thank you.
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