Boeing confident on stalled plane deal
( 2003-12-07 10:45) (Agencies)
Boeing said on Saturday it was confident a controversial $20 billion-plus defense contract with the U.S. Air Force would go ahead despite a pause in negotiations ordered by the Pentagon.
"We're confident that there's going to be a U.S. Air Force 767 program," Mark Kronenberg, vice president, International Business Development for the Middle East, Africa and the Americas, told Reuters.
"Obviously right now it's under review. OSD (Office of Secretary of Defense) is looking at it. Air Force is looking at it and we're cooperating with both fully," Kronenberg said.
The New York Times reported on Saturday the U.S. Air Force's top acquisitions official urged the quick signing of the contract with Boeing even after Defense Secretary Donald Rumsfeld expressed concern about improprieties.
Citing internal e-mail messages, the Times report said that Dr. Marvin Sambur, the acquisitions official, several months earlier had also forwarded to top Boeing executives copies of internal Pentagon communications outlining the negotiating strategy for the contract to lease and then buy 100 modified refueling planes.
Those messages were sent in April and May, the Times said, before Boeing and the Pentagon had reached an agreement on the controversial tanker-leasing deal.
Critics have portrayed the deal as costly, unnecessary and unseemly. Two top Boeing officials were fired after what the company called "compelling evidence" came to light of misconduct on the officials' parts regarding the relationship between the aircraft giant and the Pentagon.
Boeing's chief executive, Philip Condit, resigned on Monday over the controversy. He was replaced by Harry Stonecipher.
NO STRATEGY CHANGE
Kronenberg told Reuters that the resignation of Condit would not have an effect on the company's overall strategy.
"Despite the changes in the leadership of the Boeing company over the past couple of weeks, the overall direction of the company has not changed. We have a sound business plan which is both on the commercial sector and the strong defense space sector and we think that's the way to go," he said.
"In terms of leadership itself, Harry Stonecipher announced the leadership team last week. Jim Albaugh was one of that team and continues as president CEO of the Integrated Defense Systems Company," Kronenberg said.
Douglas Groseclose, a senior sales vice president at Boeing Commercial Airplanes, told Reuters that the pause in tanker negotiations would have no immediate effect on the 767 line.
"There is a possibility that if demand starts to erode or go down we would take a look at things," he said.
"But not yet. Right now we're pretty much locked in what we're building today," Groseclose said, but declined to give out current production rates.
Both Boeing executives were speaking on the sidelines of a news conference to kick off the Dubai Air Show this week.
The world's largest plane maker said the pause would not affect its Middle East market, where it is vying to meet the challenge of rival Airbus with the launch of a new luxury plane dubbed the 7E7 Dreamliner.
Boeing estimates the Middle East market will be worth some $10 billion over the next five years.
Boeing said it was also in discussions with officials in Iraq which is rebuilding its infrastructure after the U.S.-led war that ousted President Saddam Hussein.
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