Germany has dug in its heels in the face of Airbus demands for a further 5 billion euros to cover cost overruns in the development of the military transport plane A400M. A Defense Ministry official has said that Berlin will pay no more than is called for by the contract — a position which could torpedo the project.
Even as Airbus warns that the fate of the military transport plane A400M hangs in the balance, Germany continues to reject demands from the company for more help with the massive cost overruns that have struck the project.
According to a report in the business daily Handelsblatt on Wednesday, the Defense Ministry in Berlin remains unwilling to provide Airbus with more than a further €650 million to cover inflation and surcharges as outlined in the purchase contract. Airbus, however, is calling on its European customers to cover 50 percent of the €11 billion in cost overruns.
“We will definitely not pay more than the €650 million in extra costs called for by the escalation clause in the contract,” one unnamed Defense Ministry official told Handelsblatt. “It is nice that the airplane took its maiden flight in Seville,” added Defense Ministry spokesman Holger Neumann, referring to last month’s first test flight. “But that didn’t fulfil a single condition of the agreement.”
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Debate (contract negotiations) occur before not afterwards. Once a contract is signed the debate is over. This headline should have more accurately read ’Germany insists Airbus honour its contract’.
Do not the governments involved in the purchase also own Airbus (lock, stock and barrel). So they will be just covering their collective butts when they take the money from one pocket and put it in the other.
The reason this situation interests me is because few years ago when Canada was looking to replace the Hercules with new aircraft this monster was being bandied about as a substitute. If memory serves Harper over-ruled the opposition and sole sourced the “Herky Bird” because there were problems and delays even back then.
I don’t know if we have the new aircraft yet. Maybe someone from Trenton can help me out.
One of my garage beer drinkin/wrench buddies is a warrant officer in the Air Force. He just advised that delivery of the first of the new Hercs has been postponed for a couple of months. Now slated for delivery at the end of this year (Oct-Dec).
The Hercules is a proven aircraft design. Built in North America Nuff said.
mid island mike