Pity Northrop Grumman
Six weeks ago, the defense stalwart pulled out of the Pentagon's KC-X Tanker competition in a huff. Declaring the contest patently unfair, and weighted against 'em, Northrop refused to participate in a (in its opinion) rigged bidding contest. It figuratively took its ball and went home -- but not without taking a few parting shots. As it walked off the field, Northrop shouted over its shoulder that with no one left to oppose Boeing's
Not so fast, Northrop
And yes, that's the way things would have played out, but for one thing: EADS.
You see, up until the moment Northrop threw in the towel, its partner in the KC-X competition had pushed to submit a bid no matter what. Now, after weeks of rumors that EADS still hadn't given up, we now have confirmation. EADS will submit a bid of its own, sans Northrop. (And having apparently failed to woo L-3 Communications
Not so fast, EADS!
Previous to today's reports, Boeing, predictably, has cried foul and accused EADS of receiving illegal subsidies from Europe which it says taints its rivals bid. Says Boeing, at the very least the Pentagon should force EADS to submit its bid post-haste, and not grant its rival the 60 extra days it says it needs to prepare an alternative to Boeing's offer. It sure sounds like Boeing's upset... but don't believe it. Not for one moment.
You see, up until now Boeing and its Pentagon benefactors have faced the embarrassing prospect of seeing Boeing awarded a sole source contract on KC-X. $50 billion in revenues, served up on a platter, with Boeing to procure an attractive profit margin.
No longer. With EADS volunteering for the role of straw man, Boeing can now field its bid and, in a few months' time, win KC-X and declare it did so fair and square -- and more than that. That EADS actually got every benefit it asked for from the Pentagon, yet Boeing beat 'em anyway.
Fools, there's only one winner in this contest -- literally and figuratively. And its name is Boeing.
So Boeing will win this one. But in anticipation of the win, Boeing's has already more than doubled over the past year. How much profit remains to be had? How do you know when "the train has left the station" and it's too late to buy? Here's how.