UK aerospace workers celebrate Obama's reappointment of Gates

Hopes raised that contracts for US military will not stall as Bush's Defense Secretary keeps his job

US president-elect Barack Obama's decision to retain Defense Secretary Robert Gates has raised hopes in Washington and London that a $40bn (£26bn) air refuelling contract will be ready by 2011.

Aerospace giants Northrop-Grumman and EADS were awarded the US tanker contract earlier this year, but rival Boeing challenged the appointment arguing that the selection procedure contained fundamental errors.

A likely rerun of the competition has led to fears that the contract will not be re-let for up to four years, a blow to 13,000 UK workers who would manufacture many of the craft for EADS subsidiary Airbus. It is estimated that the contract will be worth about £3bn to the British economy. At present, US refuelling craft more than half a century old continue to struggle with 21st-century military demands.

However, sources on Capitol Hill said that Mr Gates' reappointment for at least the first year of the Obama administration – a mild surprise given his hawkish reputation under George W Bush – has raised hopes that the re-tendering will speed up.

"Secretary Gates made a decision in September that he wouldn't be able to resolve [the retendering] issue until after the election," said a Washington insider. "The expectation in the air force is that it could be re-let by March 2010, but I would say no earlier than second-quarter 2010 and more likely late that year or early 2011."

The source said that the delay will be relatively short as Secretary Gates is almost certain to "by and large" stick with the original tender documents because he is "personally invested" in the architecture of the original procedure. A different defense secretary would have been more likely to draw up a new raft of tender documents, taking the Airbus-Boeing competition to at least late 2012.

An aerospace source warned that new defence staff at lower levels will take up to six months to settle into their roles, meaning that the tender process might not be reassessed fully until next August. However, the source agreed that while the air force's March 2010 target was optimistic, the turn of 2011 was achievable.

EADS is also in line to win US military contracts worth £50m through subsidiary Paradigm by the end of this year. Paradigm managing director Malcolm Peto said that the US was using the company's Skynet 5 satellite communications tech-nology, which was developed in the UK through a £3bn private finance initiative project with the Ministry of Defence. Mr Peto said that Paradigm was in line to win four contracts, which would see the US military use spare capacity in its UK technology infrastructure.

Another EADS division, Astrium, announced earlier this month that it was in talks with Nasa to provide communications and navigation support for a permanent US moon base.

Start your day with The Independent, sign up for daily news emails
PROMOTED VIDEO
ebooks
ebooksA special investigation by Andy McSmith
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Software Development Manager

£40000 - £50000 per annum: Recruitment Genius: This is an exciting opportunity...

Ashdown Group: Product Manager - (Product Marketing, Financial Services)

£30000 - £35000 per annum + Benefits: Ashdown Group: Marketing Manager - Marke...

Recruitment Genius: Compliance Assistant

£13000 per annum: Recruitment Genius: This Pension Specialist was established ...

Ashdown Group: Market Research Executive

£23000 - £26000 per annum + Benefits: Ashdown Group: Market Research Executive...

Day In a Page

As in 1942, Germany must show restraint over Greece

As in 1942, Germany must show restraint over Greece

Mussolini tried to warn his ally of the danger of bringing the country to its knees. So should we, says Patrick Cockburn
Britain's widening poverty gap should be causing outrage at the start of the election campaign

The short stroll that should be our walk of shame

Courting the global elite has failed to benefit Britain, as the vast disparity in wealth on display in the capital shows
Homeless Veterans appeal: The rise of the working poor: when having a job cannot prevent poverty

Homeless Veterans appeal

The rise of the working poor: when having a job cannot prevent poverty
Prince Charles the saviour of the nation? A new book highlights concerns about how political he will be when he eventually becomes king

Prince Charles the saviour of the nation?

A new book highlights concerns about how political he will be when he eventually becomes king
How books can defeat Isis: Patrick Cockburn was able to update his agenda-setting 'The Rise of Islamic State' while under attack in Baghdad

How books can defeat Isis

Patrick Cockburn was able to update his agenda-setting 'The Rise of Islamic State' while under attack in Baghdad
Judith Hackitt: The myths of elf 'n' safety

Judith Hackitt: The myths of elf 'n' safety

She may be in charge of minimising our risks of injury, but the chair of the Health and Safety Executive still wants children to be able to hurt themselves
The open loathing between Barack Obama and Benjamin Netanyahu just got worse

The open loathing between Obama and Netanyahu just got worse

The Israeli PM's relationship with the Obama has always been chilly, but going over the President's head on Iran will do him no favours, says Rupert Cornwell
French chefs get 'le huff' as nation slips down global cuisine rankings

French chefs get 'le huff' as nation slips down global cuisine rankings

Fury at British best restaurants survey sees French magazine produce a rival list
Star choreographer Matthew Bourne gives young carers a chance to perform at Sadler's Wells

Young carers to make dance debut

What happened when superstar choreographer Matthew Bourne encouraged 27 teenage carers to think about themselves for once?
Design Council's 70th anniversary: Four of the most intriguing prototypes from Ones to Watch

Design Council's 70th anniversary

Four of the most intriguing prototypes from Ones to Watch
Dame Harriet Walter: The actress on learning what it is to age, plastic surgery, and her unease at being honoured by the establishment

Dame Harriet Walter interview

The actress on learning what it is to age, plastic surgery, and her unease at being honoured by the establishment
Art should not be a slave to the ideas driving it

Art should not be a slave to the ideas driving it

Critics of Tom Stoppard's new play seem to agree that cerebral can never trump character, says DJ Taylor
Bill Granger recipes: Our chef's winter salads will make you feel energised through February

Bill Granger's winter salads

Salads aren't just a bit on the side, says our chef - their crunch, colour and natural goodness are perfect for a midwinter pick-me-up
England vs Wales: Cool head George Ford ready to put out dragon fire

George Ford: Cool head ready to put out dragon fire

No 10’s calmness under pressure will be key for England in Cardiff
Michael Calvin: Time for Old Firm to put aside bigotry and forge new links

Michael Calvin's Last Word

Time for Old Firm to put aside bigotry and forge new links