USAF to Boeing, NGC: “Don’t Make Us Come Back There”

Reuters reports that the USAF met last week with Boeing and Northrop Grumman’s CEOs “to voice concern about the “vitriolic” tone of public statements over a $35 billion refueling aircraft program.” Particular concern was expressed regarding Boeing’s allegations of irregularities in the USAF’s KC-X competition process. Defense analyst Loren Thompson, of the Virginia-based Lexington Institute went so far as to say that: “The tone of the tanker debate has turned so negative that Air Force leaders are concerned that it could damage their long-term relationship with Boeing.”

Analysis: The effect of this meeting, if any, will depend on Boeing’s assessment of a straightforward question: If the potential prize is nearly $20 billion in work over 20 years, how much strain on their long-term relationship with the USAF becomes an acceptable risk in the current environment?

Industry trends are also playing a role…