Boeing loses out in $35 billion deal

? In a stunning upset, Boeing Co. lost out to Northrop Grumman Corp. and the maker of Airbus planes on Friday in the battle to win a $35 billion contract to build military refueling planes for the Air Force.

The decision is a major disappointment for Wichita, where Boeing Integrated Defense Systems would have been the finishing center for the militarization of the tanker.

The selection of Los Angeles-based Northrop Grumman and its Paris-based partner, European Aeronautic Defence and Space Co., came as a surprise to Wall Street, defense analysts and lawmakers on Capitol Hill.

It is considered a huge blow to Chicago-based Boeing, which had been supplying refueling tankers to the Air Force for nearly 50 years and had been expected to win the deal.

The Air Force contract will be worth between $30 billion and $40 billion over 10 to 15 years. It is the first of three awards worth up to $100 billion over 30 years to replace the entire Air Force fleet of nearly 600 tankers.

Sen. Pat Roberts, R-Kan., said he was “extremely disappointed” in the Air Force’s decision and vowed to insist on a briefing by the Air Force “to see the numbers that justify a contract for American planes going to a foreign entity, when the merits clearly reside with Boeing.”

“If this decision holds, it will be at the cost of American jobs and American dollars, if not our national security,” Roberts said.

In after-hours trading, shares of Northrop climbed $3.74 to $82.37, while Boeing’s stock price fell $2.59 to $80.10.

The contract was expected to bring 300 to 500 direct jobs to Boeing’s plant in Wichita, said Jarrod Bartlett, plant spokesman. But the total job impact could have been as high as 3,800 jobs, when suppliers such as Spirit Aerosystems and others were considered.

The economic impact of the contract for the city was estimated at $145 million, Bartlett said.

Rep. Todd Tiahrt, a Wichita-area Republican, said he would make sure the decision is thoroughly reviewed and would do his best to reverse it.

Boeing had estimated a win would support 44,000 new and existing jobs at Boeing and more than 300 suppliers in more than 40 states.