While Airbus threatens A400M cancellation governments try to pour oil on trouble

[IPA NG]

Ik berijp niet wat er dan mis is aan een C-130 of eventueel een C-17.
Goedkoper, beproeft.

[HermanB]

Krankzinnig. Landen die volledig recht hebben op contractueel vastgelegde financiële compensatie moeten hen eisen intrekken anders krijgen ze niet hen hetgene waar ze voor betalen.

[Leovanw]

One should actually not begin the new year with old fads. But, as everybody knows, it is only given to few people to successfully put this resolution into practice. Therefore, the events of the very first workdays of 2010 concerning the troubled A400M programme have not been too surprising. Despite the agreed moratorium between EADS/Airbus and the involved governments until 31 January 2010, Airbus didn't manage to hold its horses for long and continues to press ahead with its call for financial aid by the contracting nations to complete the ambitious and highly prestigious European transport aircraft programme. However, this call does not end with a mere request for more money. It is also closely bound to the industry's strong and repeated warning of job cuts, loss of know-how and capabilities within the European aerospace industry, as well as the threat of simply, unilaterally, cancelling the entire programme.

So in the light of the recent maiden flight of the aircraft (http://www.defpro.com/daily/details/467/), and of failed negotiations in Spain at the end of 2009, Airbus Chief Executive Officer Thomas Enders openly considered the option to cancel the programme should the governments fail to participate in the financing of costs exceeding the original offer. This cost increase, due to technical problems and an ensuing delay of the programme by more than three years, now amounts to €11 billion, according to Airbus estimates. This brings the overall costs for the A400M to an estimated €31 billion ($44.5 billion).

What's more, Enders confirmed press reports that Airbus has already worked out plans to redistribute the engineers currently working on the A400M to the civil segment of the aircraft manufacturer. The Airbus CEO "is not ready to threaten the civil aviation division, which is doing well, just for the A400M," a source close to the controversy was quoted as saying. The Financial Times Deutschland (FTD) said Enders estimated the chances of reaching an agreement at around 50-50. Moreover, the news service also stated that Enders reportedly told a group of Airbus directors last month that he "no longer believed in pursuing the programme." However, an Airbus spokesman said the company hoped to wrap up the A400M negotiations "positively and constructively" by 31 January.

In this week's myriad of statements, paddling back and forth in a complicated game of political and financial interests, the involved governments have tried to cool down spirits and have mostly confirmed that they remain committed to the programme. However, the statements depicted different shades in the general support for the programme. According to FTD, France's Defence Minister Hervé Morin said he could "not envisage" Airbus having to terminate the programme. Referring to a possible cancellation, Morin added "I don't foresee it, but I also don't foresee that European the taxpayers will pay for all of the additional costs."

On Tuesday the French Minister said that Enders' comments were clearly "a way of putting pressure on the German government". A spokesman of the German Ministry of Defence (MoD) stated: "We [...] will continue to clarify the necessary details for a continuation of the programme with the industry until the end of the month." According to the spokesman, "the intention to come to an agreement remains, otherwise we would not have extended the moratorium by a month."

However, the German daily Handelsblatt quoted an unidentified source in the ministry, explaining that "we will definitely not pay more than €650 million in additional costs, which analogically result from the price escalation formula of the contract." Taking it up a notch, Handelsblatt published a statement by the spokesman of the German MoD, Holger Neumann, saying "although it is nice that the aircraft took off in Sevilla, this still does not fulfil any prerequisite."

In a recent press release, Bernhard Stiedl of the German Industrial Union of Metalworkers called for a tranche solution for the procurement of the A400M. "An agreement with the customer nations to maintain the current budget, but to reduce the number of aircraft and to order the remaining aircraft at a later moment, would be the best solution for all parties." Stiedl explains that this would unburden the funding of the programme while safeguarding employment. The development and construction of the A400M provides for some 40,000 jobs throughout Europe (11,000 jobs in Germany), not only with the EADS but also with a multitude of small and medium sized suppliers.

The alternatives on the transport aircraft market are rather sparse. While Lockheed Martin's C-130J has proven to be too small for the European customer's requirements, the C-17 Globemaster III or the Ukrainian Antonow An-124-100 are too large and lack the tactical flexibility which the A400M is supposed to provide. Therefore, the discussion remains a political one, instead of being led on the technical level, and threatens to ignore the actual requirements of the armed forces.

Talking about the A400M last year, Enders used the German proverb "Better a horrible end than a horror without end!" It still remains open as to which of the two alternatives will be chosen. However, Enders appears to be right when he says that the odds for both have become rather equal. But Airbus remains headed for confrontation, despite analysts' warnings that a cancellation of the programme would be costly for the company, having to repay €5.7 billion in development funding, and that it would prove to be hugely embarrassing for the company as well as for the European partners who lack a sustainable military air-lift capacity.

Bron: Defpro.com