washingtonpost.com  > Business > Industries > Transportation > Airlines

Quick Quotes

EADS May Sue Over Pricing Data

Ex-Air Force Official Admitted to Giving Boeing Information

By Renae Merle
Washington Post Staff Writer
Thursday, October 7, 2004; Page E04

EADS NV, Europe's largest aerospace and defense firm, is considering legal action after a former Air Force procurement official admitted sharing the company's pricing data on an Air Force program with rival Boeing Co.

Darleen A. Druyun was sentenced to nine months in prison last week after acknowledging years of preferential treatment to Chicago-based Boeing partly to enhance her job prospects with the company after she retired.

Darleen Druyun admitted to giving Boeing information.

_____Related Story_____
U.S. Files Grievance Over Airbus With WTO (The Washington Post, Oct 7, 2004)

European Aeronautic Defense and Space Co. and its Airbus SAS subsidiary submitted the data to the Air Force in 2001 as part of its bid on a 100-aircraft contract but wasn't allowed to compete for the contract because it lacked required technology. In an April 2002 e-mail, a Boeing official said Druyun told company officials that EADS's price was $5 million to $17 million cheaper per plane.

A lawsuit "is part of the full array of options that we're considering," said Ralph D. Crosby Jr., a member of the EADS executive committee and chairman and chief executive of EADS North America. "We find the whole set of developments an egregious breach of trust."

Crosby did not specify whether a lawsuit would target Boeing or the government. He also wouldn't explain the options the company was considering.

Boeing officials have said that Druyun shared the information after EADS was eliminated from the competition and that it was too general to be considered proprietary. "We have said all along that we believe at no time during the . . . competition and ensuing negotiations did we receive proprietary information of any kind from Darleen Druyun or anyone else in the Air Force," said a company spokesman. "We stand on that statement."

The deal for 100 refueling aircraft is on hold pending several studies of whether options other than the Boeing 767 should be considered. EADS has said it would be ready to compete with new technology if the Air Force decides to hold a competition.

EADS has been making an aggressive push into the U.S. defense market, first with the establishment of its American subsidiary, EADS North America, then with last week's announcement of a separate defense unit. The defense unit will be operated separately from the rest of the company to eliminate concerns about foreign influence, company officials said.

EADS North America announced its first acquisition yesterday, a $105 million deal to acquire Racal Instruments Inc., a California technology firm. The privately held company is expected to have $84 million in revenue this year, about 65 percent from defense work.

© 2004 The Washington Post Company