EADS wins major US military contract

The US Defense Department on Friday, February 29th, announced a Northrop Grumman/EADS team won a 35-billion-dollar air force tanker contract, dealing a surprise blow to US rival Boeing. "The coup announced by EADS last weekend must be particularly humiliating for Boeing," Tarik Ahmia writes. "Up to now, the Europeans' military transactions with the US have hovered at around one billion euros in annual turnover. That EADS is now aiming to dramatically boost its military transactions is primarily for commercial reasons, namely the promise of sure profits in the long term. Civil aircraft construction, on the other hand, is dependent on economic trends and therefore entails a lot more risk. ... EADS is still regarded as a European company even though the shareholder structure has become much more mixed and now includes investors from countries like Russia and Dubai. This process of internationalisation is now spreading to construction: the final assembly of the military aircraft will move to the US. ... For this reason the company is sticking to its cost-cutting plans in Europe regarding the Airbus project."

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