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http://seattletimes.nwsource.com/text/134498480_farnborough230.html

The Seattle Times 
Tuesday, July 23, 2002

Boeing, Airbus to announce collaboration on
missile-defense systems 

By David Bowermaster 
Seattle Times aerospace reporter 

-A U.S.-European joint venture on missile defense
could have significant implications. It could signal a
willingness on the part of European governments to
work with the U.S. government to build an anti-missile
capability that protects the United States and other
NATO member countries. 
-"This would be a major key for EADS to unlock the
door to U.S. defense budgets," said one source,
speaking on condition of anonymity. 




LONDON — Boeing and the parent company of Airbus today
are expected to announce a groundbreaking,
transatlantic partnership to collaborate on
missile-defense systems. 

The companies have signed a memorandum of
understanding between Boeing's newly formed Integrated
Defense Systems unit and the launch-services division
of the European Aeronautic, Defense and Space Co.
(EADS), according to industry sources. 

Details will be released at a news conference today at
the Farnborough Air Show outside London. Boeing
Chairman Phil Condit is expected to make the
announcement jointly with EADS' co-chief executives,
Phillipe Camus and Rainer Hertich. 

Financial terms are not known, but the global
missile-defense market is expected to be worth tens of
billions of dollars over the next decade. 

Congress authorized $8 billion for missile defense in
2003 alone. Boeing spokeswoman Marta Newhart confirmed
Boeing has scheduled a news conference for 3 p.m.
London time, but she declined to confirm the
participants or disclose the subject matter. 

She did suggest a major deal is in the works. 

"What we're going to announce tomorrow is
revolutionary in terms of our cooperation with the
European aerospace industry." 

An EADS spokesman did not return calls seeking
comment. 

A U.S.-European joint venture on missile defense could
have significant implications. It could signal a
willingness on the part of European governments to
work with the U.S. government to build an anti-missile
capability that protects the United States and other
NATO member countries. 

It also could open the door for EADS to significantly
expand its role as a military supplier to the U.S. 

The cooperation comes even as Airbus and Boeing
Commercial Airplanes are trading heated charges of
endangering the airline industry by pumping too many
airplanes into the market by resorting to cutthroat
pricing. 

The collaborative effort is expected to cover
ballistic-missile defense, presumably with EADS
launching pieces of the missile-defense system that
Boeing is now spearheading as prime contractor on what
is formally known as the Ground-Based Midcourse
Defense program for the U.S. Department of Defense. 

Condit yesterday said he thought the need for
sophisticated defense systems that the U.S. and its
allies can all use would open the door for "a great
deal of cooperation across the aerospace industry." 

Asked if that could include broader Europe
participation in the U.S., Condit said, "Absolutely." 

George Behan, top aide to Rep. Norm Dicks, D-Tacoma,
said he expected that the Bush administration would
encourage the partnership to build support for missile
defense in European countries. And he said it is in
Boeing's interest to partner with European countries,
which represent some of its biggest customers. 

"If they partner with EADS on a strategic mission like
that, they won't be the evil enemy anymore," Behan
said. "There will be less pressure on some of those
countries to buy European." 

But, he added, that doesn't mean there won't be
competition. 

An EADS executive said over the weekend that while
U.S. contractors are primarily focused on long-range
defenses, EADS is working harder on short- and
long-range defenses due to its proximity to Asia, the
Middle East and other potential hotspots. 

Consequently, EADS "is uniquely positioned to
cooperate with the U.S. on ballistic-missile defense,"
Fabrice Bregier said at an EADS media briefing in
Ireland. 

EADS has made it clear in recent months it wants a
large share of the U.S. defense market. 

It took a major step in that direction last month when
it was selected as part of a Lockheed Martin led-team
to develop a comprehensive air, sea and land
communications system for the U.S. Coast Guard known
as Deepwater. EADS' portion of the work could be worth
up to $1.5 billion. 

The view within the industry is that a partnership
with Boeing would greatly improve EADS' ability to
increase its visibility and respect with Pentagon and
congressional decision-makers. 

"This would be a major key for EADS to unlock the door
to U.S. defense budgets," said one source, speaking on
condition of anonymity. 

Seattle Times Washington correspondent Katie Pfleger
contributed to this report. David Bowermaster can be
reached at 206-464-2724 or at
[EMAIL PROTECTED] 



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