EADS Facing Pressure Over A400M
There are reports that France and Germany are discussing holding EADS, the parent of Airbus, to their contract for the A400M military transport....Sub order: Israel to ask for German cash
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England Vacillating On Next Batch Of Eurofighters
Filed under: BAE Systems, Business Line, Companies, Contract Additions, Contract Awards, Countries, England, Events, Germany, Military Aviation, Restructuring, Rolls-Royce, development program, production program
Back in May we had written that England would go ahead with the full buy of the next order of Eurofighter Typhoon modern fighter aircraft. This was based on the fact that the costs associated with canceling the contract would be prohibitive. There was also some hope that part of the aircraft could be used to fulfill foriegn military sales rather then seeing service with the Royal Air Force.
Now it is reported that the deal may fall through after all. England like America is faced with economic problems that have led to massive borrowing and an attempt to spend their way out off the recession. This means that funds are limited and the cost of the new aircraft fairly prohibitive. Not only will there be the cost of breaking the contract but several thousand jobs related to building the aircraft may be lost. The government is trying to renegotiate the price or the fees in order to save some money but time is running out. Germany has restated their support for the program and an intent to go ahead and buy the latest batch.
When the original contract was signed England did not imagine that they would not have enough money. It was they who insisted on the strict and high fees if the contract was not followed through on in an attempt to keep the other countries involved from leaving. This had happened several times in the past when NATO and the U.S. joined on various development and procurement programs.
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.
Support for the A400M from Spain and Turkey
Filed under: Business Line, Companies, Contract Awards, Countries, EADS, England, Events, France, Germany, Military Aviation, Restructuring, Spain, Turkey, development program, logistics, production program
The Guardian is reporting that these two countries have affirmed their support for their orders from EADS for the new transports. Unlike France, the UK and Germany who have openly discussed canceling or modifying their orders Spain and Turkey have said that they still want the new aircraft. The A400M will be assembled in Spain. There two orders make up about 25% of the planned fleet of the aircraft. It has been decided that the seven NATO countries who have bought the plane will talk every two weeks or so to review the status of the program. The decision on whether EADS would have to pay back the customers due to the two year delay in the program has been extended to May 1st. EADS feels that they need relief both in time and price and really need to renegotiate the contract to account for this long delay. Either canceling the contract or making EADS pay the penalties would be a great blow to the company.
EADS Has Good Quarter
Filed under: EADS, Earnings, France, Germany, Military Aviation, Restructuring, commercial aviation, logistics, production program
EADS announced that in the third quarter it was able to make a profit compared to the large losses last year. The Wall Street Journal has the story. Despite ongoing issues with two of its key programs – the A400 military transport and the A380 airliner – the company made about $800 M. The company found that its restructuring cost less then expected and cost reductions in the construction of its commercial aircraft also helped. Read more
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.
Europeon nations developing common UAV
Filed under: EADS, France, Military Aviation, S, development program
This article describes how EADS is moving forward on a development contract for UAV for Germany, Spain, and France. They have finished the study phase and are now working on risk reduction. Ultimately, if all things go well they will move into production of a UAV for all three nations. There is no discussion as to how they will integrate the requirements of the different countries, or perhaps they will all accept the same solution. As in most programs EADS will have to produce a certain number of aircraft to make back some of the money sunk into the development.
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