US Defense Bill Could Boost Boeing's Tanker Odds>BA

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US Defense Bill Could Boost Boeing's Tanker Odds>BA 

	
  <http://money.excite.com/img/dji.gif> 	

Wednesday May 25, 8:01 PM EDT 



WASHINGTON (AP)--A defense bill nearing approval in the House could help
Boeing Co. (BA
<http://money.excite.com/jsp/qt/full.jsp?time=0&symbol_search_text=BA> )
regain a $23 billion contract it lost last year amid an ethics scandal.

The bill, which sets defense policy and spending for next year, would
prevent the Pentagon from purchasing goods and services from foreign
companies that receive government subsidies.

While no companies or countries are named, lawmakers said the amendment
was aimed at disqualifying the parent company of European jet maker
Airbus (ABI.YY) from bidding on an Air Force contract for refueling
tankers.

Airbus, which is 80% owned by the European Aeronautic Defence and Space
Co., has long received subsidies from European governments, sparking
tension between U.S. and European officials.


	

EADS, which is based in France and Germany, has said it plans to offer a
tanker version of its Airbus A330 passenger jet for the
multibillion-dollar Air Force contract to produce a new generation of
aerial refueling tankers.

Chicago-based Boeing lost the tanker deal last year, after revelations
that it had hired a top Air Force acquisitions official who later
admitted giving the company preferential treatment.

The deal would have allowed the Air Force to buy or lease 100 Boeing 767
planes for use as tankers, but was killed by Congress in last year's
defense authorization bill. The Air Force has said it is likely to
reopen the deal to competition, although no formal timeline has been
set.

Rep. Duncan Hunter, R-Calif., chairman of the House Armed Services
Committee, included the tanker provision in a package of amendments
approved by the panel last week.

Lawmakers from both parties supported the amendment, which came as a
House subcommittee urged the Bush administration to take action against
Airbus to prevent what it called unfair subsidies for its civil
aircraft.

"Let me state clearly: This administration and the U.S. Congress cannot
and will not tolerate the unfair subsidization of manufacturing,
promoting, financing or development of commercial aircraft," said Rep.
John Mica, R-Fla., chairman of the House Aviation subcommittee.

Rep. Rick Larsen, D-Wash., called the tanker measure an important step
to protect a major U.S. employer from unfair competition. Larsen's
district includes the Everett, Wash., plant where Boeing was to build
the refueling planes.

"When it comes to the industrial base that supports our defense, we want
to ensure that U.S. companies do get a very fair shake," Larsen said.
"We don't necessarily want to rely on foreign companies for major
platforms."

House members were considering more than two dozen other changes to the
overall defense bill, which authorizes the Bush administration to spend
$490.7 billion for defense in the budget year that begins Oct. 1.

The bill also must be approved by the Senate.


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