Ministers Postpone Decision by One Month
(Source: compiled by defense-aerospace.com; issued June 23, 2009)
PARIS --- Seeking major concessions from prime contractor Airbus Military, Britain yesterday vetoed a French-German proposal to extend ongoing talks on the A400M military transport aircraft until the end of the year.
Instead, defense ministers of the seven partner nations (Belgium, France, Germany, Luxembourg, Spain, Turkey and UK) agreed to meet again in Paris in late July to decide and how, to take the program forward.
A major advance at the Seville meeting is that ministers determined that, “subject to the fulfilment by industry of certain conditions, the A400M is still a feasible programme.” (see below)
British defense procurement minister Quentin Davies said after the meeting in Seville, Spain, that “we need to make a very great deal of progress with industry in order to save this project. Asked whether the UK will stay in the program, he said "We will be if we can be."
A technical committee is to examine all aspects of the aircraft’s production plans and report back to ministers. The intention is that, on the base of this report, ministers will then define the “perimeter for the negotiations on production, delivery and financial schedules” so that all parties will know exactly what will be discussed once negotiations begin, Spanish Defense Undersecretary Constantino Méndez said after the meeting.
Britain, under growing financial pressure, demanded an annual schedule of payments for the additional costs arising from the program’s three-year delay. But these were not yet finalized, French Defense Minister Hervé Morin said, so “rather than risk a deadlock I proposed a grace period of one more month.”
While France, Germany and Spain are focusing on the program’s long-term potential, and have accepted the principle of a renegotiated contract that would spare Airbus Military major financial penalties for the three-year delay, Britain is insisting that the terms of the original contract be enforced, and that any concessions made by governments should be matched by Airbus.
The A400M contract does not allow any partner country to withdraw unilaterally, Spanish Defense Minister Charme Chacon noted after the meeting, while Mendez added that damages and financial penalties for late delivery are issued to be resolved bilaterally between nations and the manufacturer. (ends)
Joint Press Release on the Meeting of the A400M Programme at the Level of Ministers of Defence
(Source: Spanish Ministry of Defence; issued June 22, 2009)
On the 22nd June 2009 The Ministers of Defence of the seven nations participating in the European programme A400M – Belgium, France, Germany, Luxemburg, Spain, Turkey and the United Kingdom – met to receive and analyse the results reached by the Group of Experts set by the Nations to examine the status of the programme and its way forward.
As originally conceived, the A400M programme has proven to be a far greater challenge for industry than previously anticipated, suffering significant deviations from the initial forecast.
In order to rebuild the confidence that the programme objectives can be delivered within an acceptable level of risk, the nations and industry agreed in April 2009 to a standstill period.
During this period a group of experts from the nations have scrutinised the programme, arriving at the conclusion that subject to the fulfilment by industry of certain conditions, the A400M is still a feasible programme.
During the aforesaid standstill period, the Nations and industry have been exploring a commercial, technological and managerial framework, within which the new terms and conditions of any possible negotiation might be contained. A number of issues still need to be resolved, before a negotiation phase can be entered.
Therefore, in order to ensure ourselves that the conditions offered by industry fully satisfy the Nations, it has been decided to allow, in agreement with industry, an extension to the standstill period, with a decision being taken by Partner Nations by the end of July.
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Joint FR UK Summit Declaration: Defence and Security (excerpt)
(Source: UK Foreign and Commonwealth Office; issued July 6, 2009)
France and the United Kingdom are also committed to finding a positive outcome for the renegotiation of the A400M programme. The A400M will meet the capability needs of its client countries' armed forces and offer outstanding performance.
The principle behind this renegotiation is that the company bear the consequences of the programme delays and contribute to compensating for the resulting capability deficit.
The two governments are open, on the basis of these principles, to amendments allowing the pursuit of the programme under reasonable conditions. (end of excerpt)
(EDITOR’S NOTE: The joint British-French position as described above, which stipulates that Airbus Military must bear the consequences of the delays to the A400M program, and contribute to compensating for the resulting capability deficit, is a major departure from the position agreed between France and Germany in early June.
That agreement, also backed by Spain, would have allowed Airbus and its corporate parent, EADS, to avoid paying most of the contractual penalties for which it was liable.)
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