House Panel Calls Hearing on Tanker Deal

By Reuters -  |  Posted 2008-03-04 Print this article Print

Members of the U.S. military are set to answer questions on budgetary spending that has the potential to hurt U.S. businesses like Boeing.  

WASHINGTON (Reuters) - Top Air Force officials will testify on Wednesday before a House Appropriations subcommittee on their decision to award a $35 billion contract for a new refueling aircraft to Northrop Grumman Corp and European partner EADS.

A number of U.S. lawmakers, including Speaker of the House of Representatives Nancy Pelosi, a California Democrat, have expressed surprise at the contract choice, saying the decision to bypass Boeing Co will lead to job losses in the United States.

Northrop says it will assemble its A330 aircraft and modify it for military operations in Mobile, Alabama, creating at least 2,500 new jobs and supporting 25,000 around the country.

EADS has promised to assemble all A330 commercial freighters at the new facility it plans to build in Mobile.

Testifying on Wednesday at 10 a.m. EST will be Sue Payton, the top Air Force arms buyer, and Lt. Gen. Donald Hoffman, the top military official in charge of acquisitions.

Air Force Secretary Michael Wynne and his special assistant for acquisitions, Kenneth Miller, have also been busy answering the questions of Boeing supporters on Capitol Hill.

Reflecting overall market weakness, Northrop shares were 2.3 percent lower at $80.63 in mid-morning trading on the New York Stock Exchange, while Boeing shares were down 1.5 percent at $79.46.

(Reporting by Andrea Shalal-Esa, editing by Maureen Bavdek)


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