Vive Le Canada

Battle for U.S. defense work goes global, flies above issues
Date: Tuesday, July 25 2006
Topic:


Battle for U.S. defense work goes global, flies above issues

By Ameet Sachdev
Tribune staff reporter
Published July 23, 2006

France and Germany opposed the war in Iraq, but that's not stopping their corporate interests from seeking to arm U.S. troops.

The Franco-German company European Aeronautic Defense and Space Co. (EADS) last month won a helicopter contract from the U.S. Army potentially worth up to $2 billion. And the company isn't stopping there.

It is vying for a contract for a light cargo plane that the Army and Air Force envision as a versatile battlefield transport.

And on the horizon is the biggest prize of all: A pact for hundreds of aerial refueling tankers to be delivered during the next two decades, pitting EADS, the parent company of European jetmaker Airbus SAS, against Chicago-based Boeing Co.

The deals will test the nation's appetite for foreign military suppliers in an increasingly global defense industry. Overseas defense contractors want a bigger piece of the rich American military budget, the largest in the world, but face opposition from national security hawks and other critics who worry about jobs, technology and secrets leaving the country.

To soothe the opposition, the Europeans regularly form alliances with U.S. defense companies and promise to open factories and create jobs on American soil. EADS, for example, will expand a facility in Mississippi to build helicopters currently produced in Germany. One of its partners is American helicopter giant Sikorsky Aircraft.

"In a way, we're not concerned," said John Douglass, president of the Aerospace Industries Association, a U.S. trade group representing Boeing and other U.S. defense companies. "Most of the jobs are staying here in the U.S., and the countries that are doing this are by and large staunch American allies."

The Defense Department, under pressure to rein in skyrocketing weapons costs amid rising federal deficits and ongoing war expenses, supports an international supply base to create as much competition as possible.

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