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Blow to Boeing riles lawmakers

US lawmakers have reacted angrily after the US military awarded a US$35 billion aircraft deal to Europe's Northrop Grumman/EADS group, in a major blow to US manufacturers Boeing.

"It's stunning to me that we would outsource the production of these airplanes to Europe," Senator Sam Brownback said. "I'll be calling upon the secretary of defense for a full debriefing."

The US Defense Department announced on Friday that it was awarding the deal for a fleet of in-flight refueling craft to the Northrop Grumman/EADS team.

The surprise choice of EADS marks the European group's entry into the lucrative US defense market, where so far it had had only a marginal presence.

Boeing voiced strong disappointment and said it would ask for an explanation.

While European political and industry leaders have hailed the decision, many Republicans have been left seething.

"We should have an American tanker built by an American company with American workers," Representative Todd Tiahrt said.

Boeing, the second leading US defense contractor after Lockheed Martin, had been considered the favorite for the contract.

The contract for the newly named tanker, the KC-45, is one of the largest Pentagon contracts in recent years and the first order on a tanker valued at more than US$100 billion in more than 30 years.

Los Angeles-based Northrop Grumman and EADS will provide up to 179 tankers.

The stunning victory for EADS comes as its chief executive Louis Gallois seeks to build up the company's presence in the defense sector, judged to be less cyclical than civil aeronautics.

Gallois said the contract was a "great subject of pride" for the company and would "encourage it to pursue its strategy in the United States."

French President Nicolas Sarkozy's spokesman David Martinon said Sarkozy had called Gallois "to pay homage to this historic success."

Airbus will assemble the tankers in Mobile, Alabama, and has vowed to transfer assembly of its commercial 330 aircraft there, creating jobs.

Alabama Senator Richard Shelby welcomed the decision.

The contract was expected to bring up to 1,800 jobs to the Mobile area and 5,000 to the state, he said.
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