Boeing Vs. northrop Essay Example for Free

Boeing Vs. northrop Essay In March 2002, the US airforce selected Boeings KC-767 on the grounds that it had clearly demonstrated the abilities to meet their requirements. The United States Airforce (USAF) in their acceptance statement brought out four points that they cited as being behind their decision (CBS News, 2008). The Boeings design was designated KC-767A and was included in DODs 2004 model designation report. Approximately 100 KC-767 tankers were leased from Boeing for the air refueling program. Even though the refueling program was in place in many countries in the US, many had questions about its effectiveness and cost implications especially the idea of leasing crafts which may never have any buyer once the lease period was over. This argument brought forward by senator McCain was however countered by the number of US allies who were more than willing to buy their used crafts (CBS News, 2008). The congressional budget office was next in line as they criticized the budget stressing on its fiscal irresponsibility (United States Government Accountability Office, 2008). This led to the striking of a deal where the state would buy 80 KC-767 and lease twenty (United States Government Accountability Office, 2008). However, in December of 2003, the pentagon announced that the project had to be frozen due to a corruption allegation brought against one of its former staffer (CBS News, 2008). Furthermore, documentations that proved that the A330 based tankers were more suited to the task specifications of the airforce were more cost effective relative to Boeing tankers were found (CBS News, 2008). The scandal led to the sentencing of the culprit who pleaded guilty to corruptions and led to the resignation of Boeings CEO. Donald Rumsfeld in 2006 announced the cancellation of the KC-767A leases as a measure aimed at cutting the costs and a redefinition of the USAF mission (United States Government Accountability Office, 2008). The defense secretary further stated that the move will not in any way affects the mission of the KC-767A as the upgrade of the KC-135s fleets will help in moving towards the goals (United States Government Accountability Office, 2008). However, the development did no affect the relationships between Boeing and its other customers. The development were however short lived and Boeing and Northrop were soon back in the ring fighting for a big defense contract. The basis of Boeings arguments was that the KC-30 was more versatile and had a large furl capacity than the KC-135 that were being used by the airforce. The KC-135 was developed by Boeing who were bidding for an airforce contract against their nemesis Northrop Grumman . The latter won this round of battle as the departments of defense announced that it has won the tender to procure 179 new KC-45A tankers (Online News Hour, 2008). The Boeing company almost immediately took to the Government Accountability Office and filed a protests claiming the evaluation of its KC-30 was unfair (Online News Hour, 2008). Boeing further claimed that its refueling tanker could easily be reconverted to a passenger plane compared to Northrops version as shown in the Air forces post decision briefing. According to Boeings vice president they had more strengths than their competitors was all he heard from the post decision briefing. Boeings protests led to a review of the selection process by the accountability office which forced Northrop to freeze the project which it had already allocated $ 35 billion (Online News Hour, 2008). Northrop Grumman executives are on the other hand highlighting the irresponsibility involved in freezing a critical project to the development of the military for expensive lobbying in the congress that will inevitably lead to a change of the decisions made by the airforce (Online News Hour, 2008). Northrop Grumman executives further claim the decision is ironic since they put their best efforts in ensuring that the airforce receives a products that they consider the best in consideration of the design (Online News Hour, 2008). They are pushing for the public knowledge of the facts of what they represents and what they are not. The congress was divided sharply on this issue and so was the general public. Boeing supporters claim that the Northrop Grumman design was a basic passenger airbus plane (Online News Hour, 2008). A Kansas congress man was cited claiming that the decisions made by the airforce was a bad one as the airforce as it has bend backwards to deal with a French company (Online News Hour, 2008). Boeings die hards near its main production facility claimed that it is the only true tanker manufacturers and a mistake had been made (Online News Hour, 2008). A Washington senator supported this point of view and claimed that offering a military contract to a foreign company was suicidal and would incapacitate Americas ability to develop their own fleet if they should ever pull out of the deal (Online News Hour, 2008). An Alabama state senators is of a different view and approached the subject from a resource allocations view point (Online News Hour, 2008). People near Northrop are bound to benefit more that those near the Boeing plants and therefore there senators have opinions that display their satisfaction or dissatisfaction with the resource allocations (Online News Hour, 2008). She further states that there have to be losers and winner either way (Online News Hour, 2008). The Boeing group further accuse the airforce of a change in parameter in order to accommodate the design put up by Northrop Grumman so as to ensure two bidders are present (Online News Hour, 2008). Even though many are of the view that the airforce was trying to lock out Boeing due to the scandals it previously had, Boeing executives were of the view that was not the case as the specifications that were asked by the airforce were changed considerably to ensure Northrop was in the race (Online News Hour, 2008). They further claim that the large sized tanker proposed by the Northrop was a liability and only countries not interested in their taxi ways would allow for such aircrafts. The Northrop group however counter this argument by stating that their design is more sophisticated and has advantages that are yet to be seen (Online News Hour, 2008).