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Reply With QuoteThat's probably the weirdest thing I've read today. And based on the kinds of things I read online, that's saying something.
Business & Technology | 'Bizarre' tanker twist: Russians will bid against Boeing for Air Force contract | Seattle Times NewspaperBizarre' tanker twist: Russians will bid against Boeing for Air Force contract
Russia's government-owned aerospace company United Aircraft will announce Monday it is competing against Boeing for the $40 billion refueling-tanker contract, a Los Angeles attorney for the company said Friday.
By Rami Grunbaum
Seattle Times deputy business editor
Here's the latest twist in the Air Force tanker saga: The Russians are coming.
Russia's government-owned aerospace company will announce Monday it is competing against Boeing for the $40 billion refueling-tanker contract, a Los Angeles attorney for the company said Friday.
United Aircraft of Moscow plans to unveil a U.S. partner and offer a modified version of its Ilyushin Il-96 wide-body plane, said John Kirkland, a Los Angeles lawyer representing the group.
The still-unidentified partner, "a U.S. public company and existing defense contractor," would assemble the planes in the U.S., he said. The Russian interest in the tanker bid was first reported Friday by The Wall Street Journal.
United Aircraft was formed under the authority of then-President Vladimir Putin in 2006 to combine the most famous names in Russian aviation: Sukhoi, Tupolev, Ilyushin, MiG.
Kirkland acknowledged it faces "significant hurdles ... there are obvious security issues, there are sanctions and restrictions on buying things from Russia."
He insisted, however, that "the Il-96 meets every single one of the final RFP (request for proposal) requirements, and it comes in at a lower price (than Boeing), so if it's a fair competition, we win."
One leading U.S. aerospace analyst thinks otherwise.
"What a completely bizarre idea," said Richard Aboulafia of the Teal Group.
"There would be enormous political, technical and performance barriers. It will not happen."
For one thing, Aboulafia said, "The Il-96's operating economics have more in common with the KC-135's than with the Airbus and Boeing jets scheduled to replace the KC-135s."
Kirkland said that might be true of the current Ilyushin Il-96, which uses four engines. But United Aircraft will pitch a tanker using two modern, fuel-efficient Western engines, he said.
"That's a great idea, if the Air Force enjoys taking on much more risk and if they delay the program a few years," Aboulafia responded.
"Just when I thought (the tanker competition) couldn't get any dumber this comes along," he added.
On another front in the tanker contest, European manufacturer EADS said Friday it was asking the Pentagon for a 90-day extension of the bidding deadline so it can decide whether to proceed without its partner Northrop Grumman.
Northrop was scheduled to assemble EADS's Airbus A330 tankers in a new plant in Mobile, Ala. But it dropped out March 8, saying the contract requirements tilted in Boeing's favor by emphasizing price over additional capabilities.
Kirkland said that "if Airbus doesn't bid, we'll step into their shoes" and consider using the Mobile, Ala., site.
The Ilyushin Il-96 first flew in 1988 as the Soviet Union began to crumble. Only 20 were sold before the passenger version was discontinued amid economic chaos at home and little interest abroad. Russian civilian aircraft, to the extent they are known in the West, are often considered lumbering and unreliable.
But Kirkland said they are sturdy, noting they have ferried U.S. troops into Afghanistan. United Aircraft makes the refueling tanker for Russia's air forces, based on the Ilyushin Il-76 airliner, and would convert its newer airliner in similar fashion, he said.
He attributed the mechanical problems of Russian airliners to lack of access to proper maintenance and training — something that could be corrected if United Aircraft can establish a maintenance, repair and overhaul base (MRO) in the U.S., he said.
"The whole economic incentive to do this transaction is we will have an MRO facility in the U.S., to allow us to service Russian airplanes to eliminate the maintenance problems people experience with Russian airplanes."
That in turn would open the door for United Aircraft to market its Antonov AN148 regional jet, for up to about 85 passengers, in the U.S. market.
"Its Putin's favorite plane," Kirkland said, adding that because of the AN148's low price, "Everyone should want it, they're just worried about the maintenance."
He said his Russian clients told him that when President Obama met Putin, the Russian president specifically asked about United Aircraft's potential bid on the tanker.
"Obama gave him his personal assurance they would be given a fair shot at this like everyone else," he said.
Rami Grunbaum: rgrunbaum@seattletimes.com or 206-464-8541
More than a hundred heated comments.
Of course, there is not a chance in hell that Russia will get this contract.
But a formal evaluation of the Russian bid by the USAF will be good for the future marketing of Russian tankers in third countries.
Last edited by andrew; 21 Mar 10, at 02:29.
That's probably the weirdest thing I've read today. And based on the kinds of things I read online, that's saying something.
Well, there you go Jimmy. Some competition for Boeing...
Well, some of your military satellites have been launched on the Atlas V which uses Russian rocket engines. Boeing has long been sourcing titanium parts for its planes from Russia. For the next several years American astronauts have to book seats on Russia’s rockets.
So another bid is not dig deal, IMO.
^^^ Those forgings are only roughed in Russia- they are finished right here in Portland not far from my shop.
This bid will never happen.
First of all, the security aspects would stop it.
Second, Airbus will bid. Right now they are just posturing, but they have asked for a 90 day extension, which means they will bid. So UA won't have a US partner anyway.
It is a bizarre twist though.
Who knows :-)
It's a lot different to have JV's on civilian projects than military ones, and there are a lot of people in the US Congress that would raise more than a eyebrow over such a proposition.
It would be a really tough sell for the Air Force- if they thought Airbus was a tough sell, lol.
As I said, there is not a chance of such a deal.
The purpose of this proposal has nothing in common with the stated intentions and lies in completely different area. I think it’s more a political theatre than business.
Today, a UA representative said that Boeing approached UA lately to try and convince the Russian company to bid in the US tender in case if EADS quits.Boeing's Russian rival denies entering tanker bid
March 22, 2010
(Reuters) — Russia denied on Monday that state-run United Aviation Corporation planned to bid for a $50 billion contract to replace the U.S. Air Force's fleet of air tankers, rivalling Boeing Co. and Europe's EADS.
John Kirkland, a Los Angeles-based attorney, had told various news media over the weekend that UAC would announce a joint venture with a U.S. defense contractor on Monday to enter the bidding for the tanker deal.
UAC denied it was working on any such bid, and the Russian government said no such topic had been discussed at talks last week in Moscow between U.S. Secretary of State Hillary Clinton and Russian Foreign Minister Sergei Lavrov.
"We do not know who this person John Kirkland is," UAC vice-president Alexander Tulyakov told Reuters.
"John Kirkland is not a UAC representative and we have had no communications with him" about the tender.
"We have had no discussions whatsoever with any party about the possibility of producing air tankers for the U.S. air force," Tulyakov said.
Russian Prime Minister Vladimir Putin did not discuss the issue with Clinton at talks last week, a spokesman for Putin said. "It was not a topic at the talks," said Dmitry Peskov.
The U.S. Air Force has been trying for nearly a decade to replace its fleet of Boeing-built KC-135 tankers, which are close to 50 years old.
EADS, the parent company of Airbus, won a deal in 2008 to build an initial 179 tankers, only to have it canceled after U.S. auditors found that the Air Force had failed to follow its own judging rules.
The Pentagon said last week that EADS had expressed possible interest in continuing to compete for the contract.
U.S. LAWYER
Kirkland told Reuters on Monday that he was told about the bid by a man named Alexander Ivanovich, who he believed was an aide to Russian Deputy Prime Minister Sergei Ivanov.
"Alexander Ivanovich is his name but all the Russian names sound the same to me," Kirkland said. He said he would have to check to find a surname as Ivanovich is a Russian patronymic.
Kirkland sent Reuters copies of letters on what appeared to be UAC letterheads saying that high-level Russian approval of a bid was imminent.
The letters from "OOO UAC" contained several grammatical mistakes in Russian and confused Vladimir V. Putin's middle initial.
"It is very important for me that people know I am not just making (stuff) up. I have (in my possession) written letters from UAC on UAC letterheads with UAC control numbers," Kirkland told Reuters.
Sergei Ivanov, the Russian deputy prime minister who is board chairman of UAC, dismissed the reports as "a canard." A spokesman for Ivanov declined to comment further.
When asked who was paying his legal bills, Kirkland said: "The American side." When asked who that was, he said: "I am not going to disclose that -- it is a public company."
"It is a defense contractor," Kirkland said.
Kirkland had said Russian Foreign Minister Lavrov discussed a UAC bid for the tanker contract at a meeting with Clinton.
But Russian Foreign Ministry spokesman Andrei Nesterenko said the topic was never discussed at the talks.
Kirkland last week quoted Alexander Shishkin, who he said worked for the Russian Federal Service of Military-Technical Cooperation, as saying the U.S.-Russian joint venture for the bid would be announced at UAC headquarters on Monday morning.
There was no such announcement on Monday in Moscow.
Shishkin, contacted by Reuters on Monday, said he could not say anything. He would not even confirm he worked for the Federal Service of Military-Technical Cooperation. "I cannot say anything until the bosses decide something," he said.
An official at the agency said nobody called Alexander Shishkin was listed as working there.
Kirkland said that a Russian bid would be based on a widebodied version of UAC's Ilyushin-96 aircraft, which he said would be called the Ilyushin-98.
"There are some internal discussions within the UAC, but very preliminary ones, about the production of an air tanker based on the Il-96. But to talk about Russian air tankers refuelling U.S. military planes -- it is from the realms of fantasy," said a UAC source, who asked not to be named.
Fewer than 30 Ilyushin-96 aircraft have been produced and the plane is considered technically inferior to Western rivals.
Russian news media reported last year that production of the passenger variant had been canceled, though a cargo version is still in limited production.
Russian media have made no mention of a new version of the Il-96 called the Il-98.
Who's next on the biding? Chengdu Aircraft Industry Corporation?...
Woah, deja vu.Originally Posted by Jimmy
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