What is the impact of a foreign (non-U.S.) defense contractor winning a major aircraft development contract?
To most people, this was a surprise, especially in light that previous contracts awarded to non-U.S. contractors were much smaller in scale and with the fragile state of the U.S. economy at the time. With long development and operational cycles, large programs such as this are critical to firms. Anytime resources go to suppliers outside the U.S., the impact on local industry is diminished. Already EADS has attracted several similar contracts from foreign governments because of their win. That said, the impact on Boeing in the short-term should be tempered by the fact that are in an upcycle for commercial aircraft that will last until the middle of the next decade. The true impact of this loss will only affect the company when the commercial cycle runs its course. In addition, while the total value of the contract was promoted to be around $40 billion, roughly half of that is planned to be spent in the United States or with U.S. contractors. The contract was also part I of III, leaving
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