New EADS North America chief faces some big challenges, experts say

“O’Keefe needs to broaden EADS’s business space with the federal government,” said the Lexington Institute's Loren Thompson, a defense sector consultant. “But that will be at a time when his parent company [EADS] is stretched financially by the need to develop new commercial aircraft.”

Jim McAleese, who runs a defense-aerospace consultancy near Washington said O’Keefe’s “primary challenges” will be to grab more U.S. Army and Air Force helicopter contracts, as well as tenders for Air Force fixed-wing cargo planes.

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Another industry source said one way for EADS North America to broaden its U.S. combat helicopter business would be to acquire an existing military chopper manufacturer, should one go up for sale.

The European firm has for years wanted to crack the lucrative Air Force transport aircraft market and came close to winning the air service’s $35 billion tanker aircraft contract.

McAleese said even though the company lost to Boeing, its chief rival among massive military aircraft manufacturers, the high-profile competition “should give O’Keefe a leg to stand on because he was involved in the program.”

EADS went along with Defense Department and Air Force officials’ tough price and performance standards in the last competition, and opted against protesting the Air Force’s eventual selection of the Boeing design.

“That should give him a lot of goodwill with both the Office of the Secretary of Defense and the Air Force,” McAleese told The Hill.

O’Keefe also will have to find a way to overcome NASA and the Air Force’s long history of favoring American firms when handing out contracts to build spacecraft and deliver them into orbit, McAleese said.

As a former NASA chief, O’Keefe may have a few ideas for doing just that.

The new chairman and CEO also should explore what parts of the U.S. military aircraft services market his division can crack without doing financial harm to EADS, Thompson said.

O’Keefe will replace Ralph Crosby, who recently retired, the company said in a statement. O’Keefe has been serving as both CEO and chairman since Jan. 1.

“EADS North America just concluded a remarkable year in 2011, having successfully expanded our product portfolio in the U.S., increased the company’s recognition with our federal and military customers, and extended our record of within budget and on time deliveries of the UH-72A Lakota Light Utility Helicopter to our U.S. military customers,” O’Keefe said in a statement.

“As we make this important leadership change, I look forward to 2012 and another year of exciting growth and expansion for EADS in North America,” O’Keefe concluded.

In addition to leading NASA, O’Keefe served as Navy secretary under former President George H.W. Bush, and was Pentagon comptroller before that. He also brings Capitol Hill experience to the job, having been staff director of the Senate Appropriations Defense subcommittee.