Youtube video of Airbus A400M Test Flight
http://www.youtube.com/watch?v=BHTqSeF8TLgAlso reported on the BBC and viewable through their website, "Airbus A400-M takes off on maiden flight"
http://news.bbc.co.uk/2/hi/europe/8407825.stm?ls
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A400-M Airbus
South Africa May Be The First A400M Casualty
Filed under: Airbus, Business Line, Companies, Contract Awards, Countries, EADS, Events, Lockheed Martin, Military Aviation, Restructuring, South Africa, development program, production program
The A400M is one of EADS most ambitious military programs. The new tactical transport would be developed and built in Europe for several different nations and provide a possible counterweight to the C-130 for overseas sales. The aircraft has faced development struggles that has led to a two year delay in the delivery of the test vehicles and caused the customers to rethink whether to continue. This would have been harsh for EADS as they would have to pay penalties to the countries that invested in them.
In July it was decided to renegotiate the contract to allow EADS time to restructure it and meet its obligations. The A400M has also attracted some foriegn customers and now South Africa is considering canceling their order for eight aircraft due to a price increase of over 150 percent. If the contract was not canceled by the end of the month the nation must continue on with the program and pay the new price. This would be about $6.4 billion compared to the original estimate of $2.6 billion in current exchange rates.
Defense acquisition programs that run late or over budget are nothing new. Normally when an overseas sale occurs of this kind of system it is after it has been in production for a few years and the price stablized. In this case South Africa gambled that the A400M would be completed on time and cost without any serious issues. This has turned out not to be true and they are facing a price increase of starting over. The aircraft are considered key to their peace keeping capability.
O
U.S. ‘at risk’ with Obama missile shield
WASHINGTON, Sept. 24 (UPI) -- The U.S. missile defense architecture planned for Europe in 2020 is insufficient for homeland protection from long-range missiles, an analysis says.
Some In Germany Upset About EADS’ Performance
August 7, 2009 -- When there is a monopoly in any industry it can cause issues with the customer base. In Europe due to the decline in defense spending there has...A400M Contract To Be Restructured
Filed under: Business Line, Companies, Contract Additions, Countries, EADS, England, Events, Military Aviation, Restructuring, development program, logistics, production program
The A400M transport program is the premier new aerospace defense effort in Europe. Seven separate countries had teamed together to develop and buy the aircraft from EADS. The program has had major delays due to engine and software issues and the customers have been delaying action for most of this year. Under the original contract EADS would have had to pay back money due to schedule targets not being met. This deadline has been pushed back until 30 July.
Now the customers have announced that a new contract will be negotiated by December of this year. Under the current schedule the first flight of the aircraft should occur by the end of the year with production deliveries in 2012. Britain had been pushing back on the contract due to their budget problems and the need for support for operations in Afghanistan.
The new contract is not technically a done deal as there could still be issues with some of the countries involved. The terms are obviously not clear now but will clearly revolve around the schedule and payments. EADS will probably see some relief from the schedule penalties. Military development programs are not new to such schedule issues and often if the program is important enough these kind of concessions will be made by the customers. The program is looking at a minimum three year delay and this will be reflected in the new contract.
The big thing this decision does delay further the penalty deadline that EADS has been facing all year and has made it hesitant to use their cash reserves for any other action.
UK Budget Woes Affecting Eurofighter
Filed under: BAE Systems, Business Line, Companies, Contract Additions, Contract Awards, Countries, EADS, England, Events, Germany, Italy, Military Aviation, Restructuring, Spain, development program, production program
The Eurofighter program is coming up for the next production buy. England, Germany, Italy and Spain are all planning to buy new aircraft with this batch. The original plan was to buy just over one hundred aircraft for about $180 billion. England was expected to buy sixteen. Now England’s budget problems is leading the Brown government to consider not participating in this purchase.
This decision is being fought by the other nations as a reduction in the quantity will increase the price for all of the them. England wants to negotiate a cheaper price for the aircraft. It doesn’t help that a great deal of high quality manufacturing jobs are based on this program across Europe. Few countries can face more unemployment in the current world economic situation.
The Eurofighter TYphoon is facing much of the same opposition that the F-22 is with some saying it is not the type of aircraft needed for today’s war on terror. The fact that it is the most expensive aircraft in Europe also is not helping. The European aviation industry is struggling right now with the A400M program and a possible cancellation of that. For England to back out of its Eurofighter commitment would only add to the problems.
Canada Buys American Trucks from Navistar
Filed under: Business Line, Canada, Contract Awards, Countries, Navistar, logistics, production program
Canada’s Government announced that they had placed a $274 million Canadian order with Navistar for 1,300 trucks to support operations in Canada. The Commercial Off-the-shelf (COTS) order was to replace aging trucks currently in use. The Gazette reports that there has been some criticism of the Government for buying American over vehicles made in Canada. The U.S. buys a great deal of equipment made in Canada, and many U.S. companies like Bell Helicopter and the “Big 3″ automakers have plants in Canada. The contract also requires Navistar to purchase $274 million in offsets which for a start will include the tires the trucks roll on. The U.S. and Canadian economies in many ways are integrated, so Canada turning to a U.S. company is not necessarily like buying from Europe or Asia.
England Bets on Gates
Filed under: BAE Systems, Business Line, Department of Defense, England, Federal Budget Process, IT, Military Aviation, commercial aviation, development program, logistics, production program
Many of the major English defense contractors rely on a great deal of American business. The biggest is BAE but there are many other companies selling goods and services to the Pentagon. Several have purchased US companies to expand their reach. There was concern with the Obama administration cutting back heavily on defense spending, but as The Times reports with the retention of Secretary Gates that concern has been alleviated somewhat. The major outstanding contract that is important to the UK and Europe is the KC-X contract. Taken away from EADS due to protest the hope is that the company will win it on the recompete. Many jobs in UK rely on building the wings for the tanker aircraft and it was a blow when the protest was upheld.
Europeon view of KC-45
Filed under: Boeing, Contract Awards, Department of Defense, EADS, Federal Budget Process, GAO, Military Aviation, Northrop Grumman Corp., Proposal, Protest, U.S. Air Force, commercial aviation, development program, logistics, production program
This article in the Deutsche Welle provides a good round up of the current on goings of the KC-45 recompete. It reiterates that despite rumors on not participating in this round Boeing went ahead and had their meeting with OSD and the Air Force to discuss the RFP. Obviously there is a great deal of interest in Germany, and Europe as a whole, for EADS to win the contract. It would be the largest to date for a primarily European based company.
Concern UK may back out of Eurofighter contract
Filed under: BAE Systems, England, Military Aviation, Restructuring, development program
The UK government is currently planning on buying Eurofighters and F-35 JSF aircraft to modernize their fixed wing aviation force. There are rumors that the Eurofighter buy may be canceled as a cost savings. See an article here. Eurofighter is built by a multi-nation consortium in Europe with BAE being the most important UK participant. If the contract is canceled, with the Government paying termination fees, that means no major aircraft will be built by BAE. They build parts of the JSF but do not assemble the final aircraft. This would be the end of fighter production in England if it happens until a more advanced aircraft then the F-22 or F-35 comes along.
Market bets on new tanker competition
Filed under: Boeing, Contract Awards, EADS, GAO, Northrop Grumman Corp., Protest, U.S. Air Force, commercial aviation, development program, logistics, production program
EADS shares are down in Europe, and I am sure Northrop Grumman’s will also drop today. See this article. The market is assuming that the Air Force will follow the GAO’s recommendation and reopen the competition. EADS performance has been heavily affected by the delays to the A380 and the scandals with their management. Also they have labor issues as they try to sort out the French-German split and make themselves more efficient. There is still a good chance that EADS will win the new competition.
Canada looks at new armored vehicles
This story says that GD is pitching upgraded Light Armored Vehicles (LAV) used by the US to the Canadian Defense Department. Because the US chose a variant of a Canadian assembled vehicle originally designed in Europe the GD proposal is actually made in Canada. Kind of a win-win for the Government there. Canada is not necessarily looking for a new vehicle, but due to operational experience in Afghanistan a heavier, more armored vehicle is attractive. More to come, I am sure, on this issue.
SecDef says KC-45 meddling by Congress may provoke retaliation
Filed under: Boeing, Contract Awards, EADS, GAO, Military Aviation, Northrop Grumman Corp., Protest, U.S. Air Force, logistics
According to this story during testimony about the FY09 Defense budget Secretary of Defense Gates warned that adding a requirement to contract awards for US jobs would only provoke retaliation by US allies in Europe and Asia. Currently Federal procurement law does not have increasing or protecting US jobs as a consideration for evaluating and awarding contracts. Congress can certainly add that to the law, and some have mooted they will, but it would come at a price. The US defense industry is now dependent on non-US companies for many parts and products. US allies are also dependent on US companies for a large amount of their systems as they do not have the capability to produce them. Any attempt by the US government to prevent foreign companies from competing could backfire and reduce the market for US companies. As we have stated here many times with the consilidation in the US industry in the Nineties it is hard to get decent competition for these kind of procurements. Only Boeing, EADS and Russian companies could have bid on it; McDonald Douglas is long gone, so Congress needed to expect this kind of situation.
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