Putting on the Pressure
EADS making some interesting comments in the USA. I assume the currency coming up as a dot is the Euro.
A400M contract 'Mission Impossible'
Date:15th Jan 2009
Source: Army Technology
Link: Army Technology
NORTH AMERICA - The head of planemaker Airbus called the way the delayed A400M airlifter project was conceived a 'recipe for disaster' and said the •20bn ($26.3bn) fixed contract would make rivals weep.
Parent EADS last week called for changes in the way Europe's largest single military procurement deal is carried out and requested more time to carry out plane tests. The move followed delays which EADS blames on a group of engine makers.
"We want to continue the programme, but we want to continue it in a way that ensures success for the customers and success for the industry," Airbus chief executive Tom Enders said on Thursday. "With the current contractual and organisational set-up we will not get there; this is a recipe for disaster".
He added: "It is mission impossible."
Enders suggested the project designed to renew transport capacity for seven Nato countries needed a significant overhaul. It is two years late, but EADS wants to add another year to stabilise the project and says it was unfairly saddled with all the risk.
"It would be irresponsible to continue on the current track, so our task is not to put the programme back on track but to put it on a new, solid and realistic footing in terms of the schedule, the organisation and finance," Enders said.
Britain this week said a three to four-year delay was unacceptable.
EADS faces steep penalties under the contract. It was drawn up initially on purely commercial terms, which is considered unusual for a military deal.
EADS chief executive Louis Gallois said on Tuesday the company had made an error by accepting the A400M deal in 2003.
Critics of the project say it was distorted by political meddling, particularly in the choice of a European engine consortium, but Germany has pressured EADS to honour the deal.
Enders said US rivals, many of whom get paid on guaranteed cost-plus contracts, would be appalled at the deal.
"Our American colleagues would run away crying if they were obliged to step up into the A400M contract," he said.
So far at least, one US contractor seems to be celebrating.
Lockheed Martin expects to sell more of its competing C-130J transport planes as a result of the A400M delays, a senior company executive told Reuters earlier this month.
EADS has taken •1.7bn in charges on the A400M and is expected to add more once negotiations over the programme's future with member countries have provided firm direction.
JB
Last edited by John Blakeley; 16th Jan 2009 at 10:08.