A $40 Billion Tanker Battle

Boeing and Northrop Grumman are vying for a Pentagon contract to supply 179 new refueling tankers for the U.S. Air Force

It's a classic dogfight. On one side, cruising at a good clip, flies Boeing (BA), the U.S.'s second-largest defense contractor with some $66 billion in total sales. Ready to attack is $32 billion Northrop Grumman (NOC), the No. 3 contractor. It has allied itself with European Aeronautic Defence & Space (EADS), Boeing's archrival in commercial and military aircraft. At stake is a $40 billion contract to supply the U.S. Air Force with 179 new refueling tankers.

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