A400M cancellation threat

[damien b]

From Defence News

Germany Says A400M Program Will Go Forward
AGENCE FRANCE-PRESSE
Published: 5 Jan 2010 05:28

FRANKFURT, Germany - The head of European plane maker Airbus is preparing to ditch its A400M military transport project, which is bogged down in talks with clients, a German press report said Jan. 5. But a German official said the intention was to press on with the program.

Airbus President and CEO Thomas Enders told a group of directors last month he "no longer believed in pursuing the program" and had begun to prepare for it to be terminated, the Financial Times Deutschland reported. Lists of engineers to be transferred from the A400M to the development of two other key aircraft, the A380 superjumbo and the A350, have been drawn up, the newspaper added.

The German defense ministry, however, said it aimed to continue with the program and hoped talks could still be wrapped up the end of the month.

"We ... will continue to clarify the necessary details for a continuation of the program with the industry until the end of the month," a ministry spokesman said.

He added that state secretaries from the seven countries planning to buy the plane were planning to meet in mid-January.

An Airbus spokesman said it hoped to wrap up the A400M negotiations "positively and constructively" by Jan. 31.

Airbus and its parent group, the European Aeronautic Defence and Space Company (EADS), have been in discussions over cost overruns for several months with the countries.

A total of 120 aircraft had been ordered for about $29 billion (20 billion euros), but clients are being asked to pony up billions more to cover unexpected costs.

The Financial Times Deutschland said Enders estimated the chances of reaching an agreement at about 50-50.

He "is not ready to threaten the civil aviation division, which is doing well, just for the A400M," a source close to the matter was quoted as saying.

The plane made its maiden flight Dec. 11 in Spain, but deliveries are at least three years behind schedule.

An aeronautics industry expert at the private German Economy Institute, Klaus Heiner Roehl, said Enders' comments could be understood as a threat to governments backing the program to step up their support.

"It would of course be complete nonsense, now that the maiden flight was a success, to back out," he told German channel N-TV.

Bluff on the behalf on EADS to get more money? If they cancel this project then i guess things are looking up for the C-17 production guys.