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HAMBURG, Germany — EADS sees the U.S. as a rich pool of business opportunity despite the Obama administration’s announced plan to cut $480 billion from defense spending in the next 10 years, Chief Executive Sean O’Keefe of EADS North America said.
“We continue to see the U.S. as a very lucrative market,” O’Keefe said, with space launch a promising area within the broad needs of the U.S. government.
There is “an intensity of interest in competitive alternatives” at the U.S. Air Force and NASA, particularly in launch capabilities for resupply of the International Space Station, O’Keefe said on the sidelines of the EADS New Year’s press conference, hosted jointly here by Airbus and EADS.
Astrium, the EADS space division, provides an alternative to United Launch Alliance, the Boeing-Lockheed joint venture, he said.
Besides space, the broad needs of the U.S. government include homeland security, extending sales opportunities beyond strictly military procurement, O’Keefe said.
The government is looking for competitive alternatives, commonality of equipment and derivatives of off-the-shelf products, he said.
An example of U.S. Department of Defense interest in military gear developed from commercial off-the-shelf equipment is the Armed Aerial Scout helicopter program, O’Keefe said. EADS Eurocopter is due to field its Armed Aerial Scout 72X, an adapted UH-72 Light Utility Helicopter, in U.S. Army flight demonstrations in April, he said.
Even with cuts of half a trillion dollars over 10 years, U.S. military spending is bigger than all the defense expenditure of all countries around the globe, he said, but a large part of the overall Pentagon budget relates to personnel costs, including health care, and is not available for equipment procurement.
U.S. President Barack Obama’s recent strategic defense review was driven by geopolitical and strategic concerns rather than funding, O’Keefe said. That national security review would shift spending as the U.S. redeployed forces that have been committed to war zones, he said.
EADS is also looking to acquire companies as part of its rebalancing away from reliance on Airbus airliner sales. Last year, the company bought four U.S. businesses: Satair, an aircraft spares company; Vector, a supplier in the helicopter market; Vizada, a satellite telecommunications firm; and Metron, a specialist in air traffic management software.
