Northrop/EADS Win $560 Million German Defense Contract

EADS, Europe's biggest aerospace company, and Northrop Grumman, the #3 U.S. defense contractor, reported this morning they won a €430m ($559m) German Ministry of Defense contract to develop and test their jointly-produced Euro Hawk pilotless aviation system (see image). The Euro Hawk, which can fly 30 hours straight, will serve as the German Air Force's high-altitude long-distance reconnaissance system. EADS and Northrop Grumman began joint work on the project in 2000. Delivery of the first demonstrator is scheduled for 2010, with another four systems scheduled between 2011 and 2014.

Sources: Press Release, MarketWatch, Bloomberg, Air-Attack
Commentary: Northrop Threats to Abandon Bidding Jeopardize Critical Air Force Program • Defense Sector Bests the S&P 500 for a Seventh Consecutive Year • A Quick Technical Look at Northrop Grumman
Stocks/ETFs to watch: Northrop Grumman Corp. (NOC). Competitors: Boeing Co. (BA), Lockheed Martin Corp. (LMT), General Dynamics Corp. (GD). ETFs: iShares Dow Jones US Aerospace & Defense (ITA), PowerShares Aerospace & Defense (PPA)

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