02/24/08 — Wayne pulling for Northrop Grumman to land contract

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Wayne pulling for Northrop Grumman to land contract

By Matthew Whittle
Published in News on February 24, 2008 2:26 AM

With the U.S. Air Force expected to award a multi-billion dollar contract to replace its existing KC-135 air refueling fleet by the end of the month, Wayne County officials are watching the decision closely, hoping that it goes to Northrop Grumman.

The KC-135, which is about 50 years old, was originally manufactured by Boeing.

Now Air Force officials are looking to replace the 530 airplanes in the fleet.

This bid, which is for 179 planes -- the first of three phases -- is estimated to be between $20 billion and $40 billion, and is what some in the industry are calling the biggest defense contract of the first half of the 21st century.

Grumman plans to manufacture its replacement, the KC-30, at a new EADS North America -- the primary contractor on the project -- plant in Mobile, Ala., where the civilian freighter craft, the Airbus A330, also will be built.

Boeing, which is competing for the contract, is offering a smaller KC-767, which will be built at its plant in Everett, Wa.

Wayne County Development Alliance President Joanna Thompson explained that the local interest in the project is a matter of jobs.

AAR Cargo Systems, which moved to Wayne County in 2006 and employs 160 people -- a number expected to grow to 500 by 2011 even without this contract -- is one of Grumman's six suppliers in North Carolina.

"We support our Wayne County business and would like to see AAR grow and expand," Wayne County Board of Commissioners Chairman Bud Gray said. "We understand this could help bring hundreds of jobs to our county."

Across the state, Ms. Thompson explained, a Northrop Grumman contract could mean a direct benefit of nearly 550 jobs, an indirect benefit of almost 1,000 jobs and an economic impact of $218 million annually.

And, while she acknowledged that a Boeing contract could have a similar impact statewide because of its subcontractors, it wouldn't be felt in Wayne County.

"The state is being very neutral on this because either way it would benefit North Carolina companies, but if Northrop Grumman got the contract, it would directly benefit Wayne County," Ms. Thompson said. "This is just a projection (by Northrop). But if Northrop Grumman was to get that contract and if AAR was part of that contract, we were told there would be additional job growth.

"And we don't have anybody in Wayne County contracting with Boeing that we know of."

Northrop Grumman Corp. is a $32 billion global defense and technology company with 120,000 employees worldwide.

The KC-135R Stratotanker is the aircraft currently being used by Seymour Johnson Air Force Base's 916th Air Refueling Wing. And while it is strictly a tanker plane, both of the new designs are expected to be able to serve as tankers, as well as cargo and passenger transports.

A decision on the contract could come as early as Monday.