Tags: EU | Airbus | Military | Plane

Germany Pressures EADS to Deliver A400M Plane

Thursday, 21 Jan 2010 08:17 AM

German Defense Minister Karl-Theodor zu Guttenberg increased the pressure on aerospace firm EADS ahead of crucial negotiations Thursday in Berlin about the company's demand for more government financial help with its troubled A400M military transport plane.

"Be assured: We want the A400M, but not at any price," Guttenberg told weekly Bayernkurier.

Guttenberg pointed out that Germany had already accepted delivery delays, but that the country's willingness to compromise on the price on the four-engine turboprop "was limited."

CEO Louis Gallois of EADS and Thomas Enders, chief of its Airbus plane-making subsidiary, were expected to lead the company's delegation at the meeting with the A400M customer nations — Belgium, Britain, France, Germany, Luxembourg, Spain and Turkey — at the German defense ministry this afternoon.

The defense officials from the seven countries and the industry are trying to reach a compromise on Airbus' claim that it can't afford to keep the project going under the original, fixed-price contract. Airbus has said it may have to cancel the program if the financial aspect does not change.

The aircraft is now four years behind schedule and more than euro5 billion ($7.3 billion) over budget.

The high level meeting was scheduled to begin at 1400GMT (1500 local time) and could possibly be continued on Friday, a spokesman for the German defense ministry said, speaking on condition of anonymity in keeping with government policy.

Airbus has asked for a decision by the end of January. Defense ministers will meet in Istanbul, Turkey, on February 4 and 5.

EADS is urging the participating nations to increase their funding for the A400M. But Guttenberg insisted that the company should shoulder the lion's share of any cost increase, as was agreed in the initial contract in 2003.

His French counterpart Herve Morin also said on Wednesday in Paris that "EADS should pay a very significant share of the extra costs." Morin added that Germany has the strongest reservations about increasing its share of the bill.

Meanwhile, a compromise solution was apparently discussed under which the price tag would remain unchanged but the customer nations would request fewer planes than the 180 ordered so far.

German union representatives welcomed this prospective as the best solution to secure thousands of possible jobs.

"The A400M's complexity and cost has been underestimated and the contract had an unrealistic schedule from the beginning on," Bernhard Stiedl of the IG Metall union said in a statement.

A confidential audit, whose findings leaked on Wednesday, blamed poor management by EADS as one of the main reasons for the exploding costs and delays, thereby increasing the pressure on the manufacturer.

The A400M had its maiden flight last month in Spain. The four-engine turboprop is seen as inhabiting an important niche market between the Lockheed Martin C-130J Hercules, which carries only half the payload, and Boeing's C-17 Globemaster III, which is larger, costlier, and less tactically versatile.

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German Defense Minister Karl-Theodor zu Guttenberg increased the pressure on aerospace firm EADS ahead of crucial negotiations Thursday in Berlin about the company's demand for more government financial help with its troubled A400M military transport plane. Be assured: We...
EU,Airbus,Military,Plane
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2010-17-21
 

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