A400M Three Years Late? Part 2

wilco737 · Tue Mar 10, 2009 11:53 pm

After 400+ posts in part 1, here now part 2.

Here again the link to part1:

https://www.airliners.net/aviation-forums/military/read.main/101293/1/

Enjoy.

JayinKitsap · Wed Mar 11, 2009 4:28 am

So will the RAF order 10 C-17's soon?

osiris30 · Wed Mar 11, 2009 5:18 am

Quoting JayinKitsap (Reply 1):
So will the RAF order 10 C-17's soon?

6 (sorry but I need this filler as just a number isn't enough to respond to a post even though it's probably all that required.. blah blah blah)

redflyer · Wed Mar 11, 2009 11:51 am

To continue a discussion from Part 1...

Quote:
Quoting Revelation (Reply 407, Part 1):
[Quoting Lumberton (Reply 398):]
Individual customers can still cancel their individual aircraft orders. However, even such a course of action is not straight-forward. A cancellation for cause can only be made of those aircraft "substantially delayed," EADS says. So later delivery slots - which could still be on time -- could only be cancelled with some restitution to industry.

It would seem if there is not unanimous opinion to cancel the contract, then each country could only refuse to accept the aircraft as their individual slots become "substantially delayed".

If the customer can cancel only if their individual aircraft orders are substantially delayed, what's with all the posturing going on right now? As of right now, no aircraft are "substantially delayed". As for later-scheduled deliveries, no one will know how delayed, if at all, any will be.

keesje · Wed Mar 11, 2009 12:37 pm

If the C-17 is a good A400M alternative, maybe the USAF should order another 100 C-17's to replace 400 C-130 Hercules aircraft too.

Think about the cost savings.

eyebrow

osiris30 · Wed Mar 11, 2009 1:50 pm

Quoting Keesje (Reply 4):
If the C-17 is a good A400M alternative, maybe the USAF should order another 100 C-17's to replace 400 C-130 Hercules aircraft too.

Keesje: I don't think anyone in this thread has suggested a whole sale replacement of the 400M with C17s. Rather many people (including myself) have suggested augmenting the A400Ms with some heavier lift. Replace 400 C-130s with C17s would be silly when C-130s are available. I would say the same about the 400M expect, well, none are available and won't be for what 3,4 maybe 5 years?

Revelation · Wed Mar 11, 2009 4:13 pm

Quoting RedFlyer (Reply 3):
If the customer can cancel only if their individual aircraft orders are substantially delayed, what's with all the posturing going on right now?

The posturing is due to the fact that Airbus is needing about another EUR 5B to complete the project.

In theory, the customers can hold Airbus to the terms of the original contract, and then Airbus would have to choose to either eat the extra EUR 5B overrun itself or terminate the contract itself and return the EUR 5B that it's already taken from the customers.

None of these choices are appealing to Airbus, so they are going back to their customers for some relief. Given that some of the customers also own large chunks of Airbus, and given that Airbus itself is a political creation, and given the customers need the planes badly, chances are good that Airbus will get some relief.

kc135topboom · Wed Mar 11, 2009 7:50 pm

Quoting Revelation (Reply 6):
The posturing is due to the fact that Airbus is needing about another EUR 5B to complete the project.

In theory, the customers can hold Airbus to the terms of the original contract, and then Airbus would have to choose to either eat the extra EUR 5B overrun itself or terminate the contract itself and return the EUR 5B that it's already taken from the customers.

None of these choices are appealing to Airbus, so they are going back to their customers for some relief. Given that some of the customers also own large chunks of Airbus, and given that Airbus itself is a political creation, and given the customers need the planes badly, chances are good that Airbus will get some relief.

The different Air Forces within the EU will get the A-400M, eventually (no matter what the end cost is). I do have a feeling that other countries that have ordered the A-400M, or have a LOU, will pull out and order C-130J/J-30s instead of waiting. None of these countries, which IIRC, only have about 10 airplanes on order, collectively, need to accept the much higher A-400M fly away costs (currently abot $208M US to overseas customers), costs that will soon exceed the fly away cost of a C-17A/ER ($220M US to overseas customers)

kaitak · Wed Mar 11, 2009 8:27 pm

Quoting KC135TopBoom (Reply 7):
The different Air Forces within the EU will get the A-400M, eventually (no matter what the end cost is). I do have a feeling that other countries that have ordered the A-400M, or have a LOU, will pull out and order C-130J/J-30s instead of waiting. None of these countries, which IIRC, only have about 10 airplanes on order, collectively, need to accept the much higher A-400M fly away costs (currently abot $208M US to overseas customers), costs that will soon exceed the fly away cost of a C-17A/ER ($220M US to overseas customers)

You make a good point there; I think Turkey (which has ordered 10) will probably stay with it, for political reasons.

However, if you look back over almost any military aircraft project (and, as the 787/A380 have shown, a few civil ones, too), there are not that many which have been produced/delivered on schedule. Was the Eurofighter? C-17? C-5 and various others, down through the years.

Moreover, if countries do abandon these orders, that means throwing a lot of VERY highly qualified people - engineers, software designers, aerodynamicsts etc etc - out of work and losing capabilities which may be needed; OK, there may be future projects, civil and military, which will require BAe's wing design expertise, but if there is a cancellation, a lot of these people will go elsewhere.

Military projects aren't just to fill a perceived need in the country's air force/naval aviation; they are also a vital provider of employment.

I really can't see any of the core countries pulling out.

Dougloid · Wed Mar 11, 2009 8:49 pm

Keez said in the last thread that Europrop is made up of a number of partners that all are working on large projects.

that is true, but the issue of whether they can work together in an efficient manner on this project is a tossup.

Also, the knowledge base for really huge turboprops that will have no civil counterpart is pretty thin. The only thing I can think of in the class is the RR Tyne.

Developing an engine from a clean sheet of paper is not an easy task, even under one roof and even a relatively simple powerplant.

I'll give you an example. Garrett started building the TFE731 in the middle sixties, and when I hired on in the engine shop we were still doing reliability based planetary gear service bulletins in the early eighties. The ATF3 was the same way. Pratt's been working on the GTF in various iterations for the last twenty years or so accordin' to Lightsaber-where IS that fellow?

osiris30 · Thu Mar 12, 2009 12:37 am

Quoting Kaitak (Reply 8):
Moreover, if countries do abandon these orders, that means throwing a lot of VERY highly qualified people - engineers, software designers, aerodynamicsts etc etc - out of work and losing capabilities which may be needed; OK, there may be future projects, civil and military, which will require BAe's wing design expertise, but if there is a cancellation, a lot of these people will go elsewhere.

If EADS drops partners at this point it will only mean more delays and costs for EADS. No one really risks much if they cancel a few planes. (I'm not talking about the primary customers here)

Quoting Dougloid (Reply 9):
I'll give you an example. Garrett started building the TFE731 in the middle sixties, and when I hired on in the engine shop we were still doing reliability based planetary gear service bulletins in the early eighties. The ATF3 was the same way. Pratt's been working on the GTF in various iterations for the last twenty years or so accordin' to Lightsaber-where IS that fellow?

You gave two and both illustrate the point perfectly. New engines are hard enough by themselves.. political noise on top of that must make it miserable.

osiris30 · Thu Mar 12, 2009 2:01 am

Some *huge* news from EADS themselves:

Quote:
Gallois told reporters that France, Germany and Spain were ready to renegotiate the contract but Britain had not yet made up its mind. The Tories have said they would cancel.

Gallois indicated that governments could cancel orders for individual planes but insisted: "This plane meets the needs of our customers."

http://www.guardian.co.uk/business/2.../mar/10/eads-airbus-profit-warning

That is very interesting news. It sounds like we'll see unit count reductions and the UK is very questionable to continue at this point.

Stitch · Thu Mar 12, 2009 2:30 am

Well I expect the UK is the country most in need for planes ASAP because they are involved in sustained overseas combat operations which the French, Germans and Spanish are not.

So it is possible that the RAF may feel forced to walk away and take additional C-17s and C-130Js to meet their needs and revisit the A400M at a later date when the plane is in service.

osiris30 · Thu Mar 12, 2009 2:50 am

Quoting Stitch (Reply 12):
So it is possible that the RAF may feel forced to walk away and take additional C-17s and C-130Js to meet their needs and revisit the A400M at a later date when the plane is in service.

More information:

Quote:
Under the latest EADS proposals, first delivery will not take place for at least three years after the first flight. But six years after the programme started, EADS is unable to set a date for that flight.

Still no first flight date set and...

Quote:
Development of the aircraft is in trouble, with EADS unable to agree a new schedule with governments. It said talks with Occar were due to start “in coming weeks”.

http://www.ft.com/cms/s/0/ca278124-0d44-11de-8914-0000779fd2ac.html

finally:

Quote:
The disarray has left EADS unable to provide forecasts for the group’s financial outlook.

WOW! Makes the 787 and 380 issues look like nothing!

More rumblings that hint at UK cancellation:

http://business.timesonline.co.uk/to...ors/engineering/article5884208.ece

Quote:
One possibility is to scrap the project altogether, which is thought to be favoured by the Royal Air Force. The Commons Defence Committee also recommended last month that Britain should pull out of the A400M programme. The MoD may also choose to reduce the number of aircraft ordered and replace them with C17s from Boeing or C130Js from Lockheed Martin.

Now while none of this is 'carved in stone' yet, there is certainly a growing volume of information that suggests heavily the UK is going to drop out. The problem with that is what will happen to the pricing for the remaining customers. The UK dropping 25 frames would put approximately 12.5% more R&D cost on the other customers. That may force others to reduce order size (particularly Germany.. I don't see them needing 60 A400Ms)...

This is going to get ugly before it get resolved. It's a little bit of a house of cards right now. Depending on how things happen it could go any number of ways.

[Edited 2009-03-11 20:15:25]

JoeCanuck · Thu Mar 12, 2009 5:46 am

Quoting Dougloid (Reply 9):
Lightsaber-where IS that fellow?

Indeed...I thought the CSeries/GTF news would have him tingling all over...

XT6Wagon · Thu Mar 12, 2009 6:18 am

Quoting Osiris30 (Reply 5):
Keesje: I don't think anyone in this thread has suggested a whole sale replacement of the 400M with C17s. Rather many people (including myself) have suggested augmenting the A400Ms with some heavier lift. Replace 400 C-130s with C17s would be silly when C-130s are available. I would say the same about the 400M expect, well, none are available and won't be for what 3,4 maybe 5 years?

The problem is that right now the A400M => C17 1 for 1 is starting to make HUGE sense. Order up 200 (ie 100% coversion of A400M) and the price per frame Boeing can offer you drops by a very large amount. Potentialy placing the C17 as CHEAPER than the A400M.

You also need to look at the fact that the missions the A400M is *NEEDED* for, the C17 can do far more and rarely would it fail to fly less than fully loaded... Why? When hauling large vehicles for the military on a deployment they don't need just one, but several.

Politics will prevent it, but C17 shopping today looks like a very good option now that the C17 development costs are all gone, and production rates are stable with the possiblity of higher production w/o heavy investment.

Revelation · Thu Mar 12, 2009 11:51 am

Quoting Osiris30 (Reply 13):

http://www.ft.com/cms/s/0/ca278124-0d44-11de-8914-0000779fd2ac.html

finally:

Quote:
The disarray has left EADS unable to provide forecasts for the group’s financial outlook.

WOW! Makes the 787 and 380 issues look like nothing!

Careful now, you may be accused of making wild exaggerations.

On the other hand, FT titled their article, EADS warns on A400M debacle

It's OK, because FT is a "nothing" source.

Quoting Osiris30 (Reply 13):

More rumblings that hint at UK cancellation:

http://business.timesonline.co.uk/to...ors/engineering/article5884208.ece

Quote:
One possibility is to scrap the project altogether, which is thought to be favoured by the Royal Air Force. The Commons Defence Committee also recommended last month that Britain should pull out of the A400M programme. The MoD may also choose to reduce the number of aircraft ordered and replace them with C17s from Boeing or C130Js from Lockheed Martin.

It's interesting to hear these reports out of the UK. They no longer hold EADS stock, and felt that they got ripped off when selling their stock due to the withholding of information about the A380 program by Forgeard et al. On the other hand, they are making the wings for the A400M and the rest of the Airbus products. It'll be interesting to see how this all shakes out. Will EADS take away some of the wing work in punishment should the UK refuse to accept their A400Ms?

I don't really think the UK is in the greatest need of replacement airframes since they do operate C-17 and C-130J already, but they may be the most likely to cancel A400Ms since they do have the familiarity with the C-17 and C-130J, they seem to want more links to the US defense industry and they do feel somewhat burned by EADS.

Germany would be second most likely since they are active in Afghanistan and they are currently leasing airlift and seem to need new airplanes quickly. Also they seem to be the most sensitive to budget cost overruns. However they still are big EADS share holders and ordering American planes would be a very difficult sell politically. At best, I think they would maybe push for more NATO C-17s and find a way to wait for A400Ms, unless the contract negotiations go terribly wrong.

The program could survive the UK walking away on their own. If somehow Germany walks away also, that'd be 85 airframes less, and it'd be hard to see how the program could survive, but I don't think Germany will walk away completely, unless Airbus pushes them over the edge during the contract negotiations.

Lumberton · Thu Mar 12, 2009 1:33 pm

Quoting Revelation (Reply 16):
Will EADS take away some of the wing work in punishment should the UK refuse to accept their A400Ms?

IMO, that possibility will factor into any UK decision. Germany and Spain have made no secret of their desire to garner the wing manufacture for the A350XWB program. The RAF A400M order may be, partly, a hostage to continued wing manufacturing in the UK.

[Edited 2009-03-12 06:34:28]

baroque · Thu Mar 12, 2009 2:07 pm

Quoting Lumberton (Reply 17):
The RAF A400M order may be, partly, a hostage to continued wing manufacturing in the UK.

If it don't have wings it won't fly applies not only to the A400M. As any UK gov looks around and admires its fast declining oil production, its unaffordable city and banking sector, it will surely fasten on the EADS wing facility and RR as two of its remaining assets. It would persuade me if I was in charge of the joint! Especially as losing the A400M would surely be a precursor to losing the A350 and all later wings. Those guys all work for Airbus now as I understand so they could be transferred with the click of a mouse to pay off the RLI.

Revelation · Thu Mar 12, 2009 2:21 pm

Quoting Baroque (Reply 18):
Especially as losing the A400M would surely be a precursor to losing the A350 and all later wings.

I think that's a very grave concern to the UK government. It'll be interesting to see what comes out of the contract negotiations. If the UK stays on for the full 25 frames and Airbus gets the budget relief they want, then we can conclude that EADS played this card with great effect. But the question is what price will the customers be willing to pay to keep their work shares? It'll have to anger the UK if they end up paying as much for the A400M as they do for C17s. It can easily be $5B to get the 25 airframes. That's a pretty steep price to hold on to the A400M wing and to stay in the running for the A350 wing. I'd say they will want to leave the room with a guarantee to get the A350 wing in exchange for staying on-board the A400M program.

osiris30 · Thu Mar 12, 2009 2:31 pm

Quoting Lumberton (Reply 17):
IMO, that possibility will factor into any UK decision. Germany and Spain have made no secret of their desire to garner the wing manufacture for the A350XWB program. The RAF A400M order may be, partly, a hostage to continued wing manufacturing in the UK.

Moving any wing product that is currently in the UK elsewhere would add additional delays and costs that EADS cannot afford on the 400M or 350XWB or anything else at this point. There may be a long-term impact (10 years down the road), but politicians don't concern themselves with such things.

EADS is not in a position of strength with the UK on this. The UK can walk from the deal according to the contact. If EADS reciprocates by wanking wing production you can bet there will be a political s**t storm the likes of which you haven't seen in a long time.

The UK needs lift. They can't wait for it. It's not like the decided to bail out of an on-time, on-cost programme. Hell even EADS admits the program is a disaster. The only country that has been truly 'for' the 400M even continuing has been France (no big surprise). Germany has been far less 'understanding' than I would have thought at the outset.

Stitch · Thu Mar 12, 2009 2:38 pm

But if EADS pulls the A400M and A350X wings out of the UK, that just delays both programs as the new facility is built and personnel are trained which could end up making Boeing's military and commercial offerings that much more attractive and lead to orders being switched.

That strikes me as rather counter-productive...

Lumberton · Thu Mar 12, 2009 3:06 pm

Quoting Osiris30 (Reply 20):
The only country that has been truly 'for' the 400M even continuing has been France (no big surprise).

I would add Spain to the list of countries that will stay with this program to the end of human history, and possibly beyond. Wink

757gb · Fri Mar 13, 2009 12:24 am

Quoting Stitch (Reply 21):
That strikes me as rather counter-productive...

That's what I was thinking as I read the last posts too. It would be a great way IMO to bring troubles to a program that so far has not had any delays announced (I mean the A-350XWB, not the A-350).

osiris30 · Fri Mar 13, 2009 1:20 am

Quoting Lumberton (Reply 22):
I would add Spain to the list of countries that will stay with this program to the end of human history, and possibly beyond.

I omitted Spain because I see them following the popular opinion whichever way that goes. I don't think they've said a peep about the whole thing. They seem to be very passive in the whole mess.

Quoting Stitch (Reply 21):
That strikes me as rather counter-productive...

Exactly my thoughts. The UK wouldn't see any potential fall out from a cancellation for at least 10 years IMHO. If Airbus pulled the wing from the UK they would set the programme back so far all nations would cancel (imagine now if delivery moved to 2016.. eeesh, so no way Airbus moves the wings).

Also for the UK, if Airbus did pull their wing manu out of the UK I can see Boeing quite happily giving that same plant some 737 replacement wing work, so really what would they lose in the UK in the long-run. Plus you have BBD making their wings in Belfast. The C-Series could be very good if executed right.

Quoting 757GB (Reply 23):
That's what I was thinking as I read the last posts too. It would be a great way IMO to bring troubles to a program that so far has not had any delays announced (I mean the A-350XWB, not the A-350).

Quite simply; yep.

XT6Wagon · Fri Mar 13, 2009 5:27 am

Quoting Osiris30 (Reply 24):
Also for the UK, if Airbus did pull their wing manu out of the UK I can see Boeing quite happily giving that same plant some 737 replacement wing work, so really what would they lose in the UK in the long-run. Plus you have BBD making their wings in Belfast. The C-Series could be very good if executed right.

Given that the BA order for A380's came at the same time as a deal to give the UK some power in the running of EADS... I wonder if the BA order might disappear if UK workshare disappeared.

Revelation · Fri Mar 13, 2009 9:27 am

Quoting Osiris30 (Reply 24):
Exactly my thoughts. The UK wouldn't see any potential fall out from a cancellation for at least 10 years IMHO. If Airbus pulled the wing from the UK they would set the programme back so far all nations would cancel (imagine now if delivery moved to 2016.. eeesh, so no way Airbus moves the wings).

I also feel Airbus wouldn't move the A400M wing work, but they certainly would threaten to move the A350 wing work. How effective that threat would be depends on who is involved in the negotiations.

Lumberton · Fri Mar 13, 2009 9:40 am

Quoting Revelation (Reply 26):
but they certainly would threaten to move the A350 wing work.

Quoting Lumberton (Reply 17):
Germany and Spain have made no secret of their desire to garner the wing manufacture for the A350XWB program. The RAF A400M order may be, partly, a hostage to continued wing manufacturing in the UK.

I take it we agree on this? I never felt the A400 wing work was on the table. The A350 work could be very much in play. Of course EADS would not move existing work! New work is open to question.

Revelation · Fri Mar 13, 2009 11:16 am

Quoting XT6Wagon (Reply 25):
Given that the BA order for A380's came at the same time as a deal to give the UK some power in the running of EADS... I wonder if the BA order might disappear if UK workshare disappeared.

I don't see that linkage myself. BA took a good look at what was on offer and chose A380 on its own merits, and it was a big blow to 747-8i, given that Boeing redid the program forecast after BA chose the A380.

Quoting Lumberton (Reply 27):
I take it we agree on this? I never felt the A400 wing work was on the table. The A350 work could be very much in play. Of course EADS would not move existing work! New work is open to question.

Yes, I agree EADS will threaten to move the A350 wing work. How effective that threat is depends on who is involved in the negotiations. Clearly some in the UK are very attached to their role in Airbus and would react strongly. Clearly the ones who declined to get BAe et. al. involved in the EADS merger to begin with and who didn't press the UK government to pick up BAe's shares in EADS when they were available won't react as strongly.

I feel EADS will make the threat because it doesn't have much else to keep the UK on board the A400M. I think it's a plausible enough threat. Even though I understand concrete is being poured for the A350 wing factory in the UK, concrete is relatively cheap and other countries that are EADS shareholders want the work badly. The hard part to replace is the R&D team, but with time, that could be relocated and/or replaced as well.

Would it be stupid for EADS to do that? Yes it would, just like we can now say it was stupid for Boeing to put large pieces of the 787 in the hands of Vought et al in South Carolina, but if it fits the "strategic master plan" it is plausible.

Hypothetically, let's say UK walks away from the A400M and Germany is wobbling. If EADS was to say to Germany "we'll give you the A350 wing manufacturing if you let us increase the A400M cost by X percent and let it be Y years late and not have Z functionality", it'd go a long long way to keeping Germany on the A400M. I think we all agree without Germany's 60 frame order, A400M is dead.

keesje · Fri Mar 13, 2009 11:34 am

Quoting Osiris30 (Reply 24):
I omitted Spain because I see them following the popular opinion whichever way that goes. I don't think they've said a peep about the whole thing. They seem to be very passive in the whole mess.

Off topic, but almost all work an Airbus wings in done in the UK hundreds of A320, A330, A340, A380 and A400 shipsets every year. Most knowledge is concentrated around Filton. No easy way to switch everything.

Quoting XT6Wagon (Reply 25):
Given that the BA order for A380's came at the same time as a deal to give the UK some power in the running of EADS... I wonder if the BA order might disappear if UK workshare disappeared.

No, I think the BA order is based on network capasity development requirements and a proven performance aircraft to replace the aging 747 fleet.

Revelation · Fri Mar 13, 2009 1:02 pm

Quoting Keesje (Reply 29):
No easy way to switch everything.

Certainly not easy, but still a plausible threat IMHO. Not many thought Boeing would ever outsource their wing manufacture, but it is now being done by the Japanese heavies for the 787.

Quoting Keesje (Reply 29):
No, I think the BA order is based on network capasity development requirements and a proven performance aircraft to replace the aging 747 fleet.

Wow, we agree on something! Smile

baroque · Fri Mar 13, 2009 1:02 pm

Quoting Revelation (Reply 19):
I'd say they will want to leave the room with a guarantee to get the A350 wing in exchange for staying on-board the A400M program.

The basic work on the A350 seems committed
http://www.flightglobal.com/articles...-a350-xwb-wing-spar-prototype.html
GKN manufactures A350 XWB wing-spar prototype
But later work might not be so sorted out although the old RLI proposal was in relation to defined parts of the wings. But:

Quoting Revelation (Reply 28):
Hypothetically, let's say UK walks away from the A400M and Germany is wobbling. If EADS was to say to Germany "we'll give you the A350 wing manufacturing if you let us increase the A400M cost by X percent and let it be Y years late and not have Z functionality", it'd go a long long way to keeping Germany on the A400M. I think we all agree without Germany's 60 frame order, A400M is dead.

might still be possible. Which will probably keep GoUK "attentive".

Perhaps worth quoting Hansard at some length even though it was back in 2005 and presumably not about the current model 350. It does give a summary of the concerns of HMG at that time.

http://www.publications.parliament.u...nsrd/vo050525/debtext/50525-28.htm
Following the successful first flight of the A380, attention is now focused on the A350, the new long-range aircraft---the hub-to-point aircraft, as it is known. That market is expected to grow by 35 per cent. over the next 20 years, and the A350 would provide a competitive Airbus product to meet that need.

For Airbus UK, the A350 poses both opportunity and threat. The company, which employs 13,000 people and supports an estimated 135,000 UK jobs, plays a leading role globally in wing design, technology and manufacturing. Airbus UK and its supply chain undertake the design and production of the wing, landing gear and fuel systems integration. However, that leadership is based on a metallic wing solution, while the A350 marks the beginning of the next era in wing technology, which is the large-scale use of composites.

The future for Airbus overall is composites. However, because many composites have already been used in current products, namely the A380 and the planned A400M, the military transport aircraft, composite design and technology expertise has been built up over the years in many Airbus sites, namely those in Germany and Spain. While the UK has developed experience in this technology, the A350 is the first Airbus civil product with the wing primary structure made largely from composite. Airbus is now considering investments for this product and the decisions on work-sharing activities, and it is important that those decisions be taken in the near future.

Success for the UK in winning the A350 would mean the creation of almost 11,000 jobs in the aerospace sector and a further 21,600 jobs being supported in the wider economy through induced employment. Those will be long-term jobs and many of them will be highly skilled. It is well known that other Airbus countries, namely Germany and Spain, are keen to see those high-value jobs brought to their sites. Whoever secures the work on the A350 will be much better placed for the future and the next generation of aircraft, as the decision on the A350 will have a significant bearing on where that work and investment will go.

In order for Airbus UK to win this vital wing business, considerable investment in new engineering and manufacturing facilities and work force training in composite processes is needed. Airbus has therefore applied to the Government for repayable launch investment for the A350. As Airbus is a successful company, one may ask why the British taxpayer should stump up repayable launch aid for it. But why should we not invest in success? In the past Governments of all political colours have tended to respond only to crisis and collapse, often with little long-term gain. For aircraft manufacturers, development costs in the industry are often greater than the total share capital of the company developing a new aircraft, while the pay-back period for these costs can be over a 15 to 20-year cycle. The financial markets do not find that particularly attractive, so Government commitment via repayable launch investment is a key method of ensuring market

On GKN, this article indicates that the UK is intent on protecting intellectual property from previous work as well future work.
http://www.telegraph.co.uk/finance/n...in-gives-UK-a-shot-in-the-arm.html

"The main concern for the UK Government was about the protection of intellectual property rights, making sure that core technology was kept in the UK," says Tom Williams, Airbus's executive vice-president for programmes and former head of UK operations. "Both bidders had a plan that would have allowed that to happen but in the end the best offer we had commercially was the one from GKN.

"This will bring a stronger capability into the UK. It will strengthen the position of Airbus UK in terms of wings and what is good for Airbus UK is also good for the 400 suppliers that depend on Airbus UK."

GKN's victory has been hailed as a shot in the arm for Britain's civil-aerospace industry. The UK is one of just six countries involved in the design, manufacture and marketing of the full range of aircraft products. Since 1997, the Government has invested more than £1bn in repayable launch investment to help companies like Airbus and Rolls-Royce.

scouseflyer · Fri Mar 13, 2009 1:07 pm

Quoting Baroque (Reply 18):
Those guys all work for Airbus now as I understand so they could be transferred with the click of a mouse to pay off the RLI.

Isn't Filton being sold / has been sodl to GKN so A350 components and A400M wing work isn't / won't be being done by Airbus so it wouldn't be EADS' decision anyway

XT6Wagon · Fri Mar 13, 2009 9:37 pm

Quoting Revelation (Reply 28):
I don't see that linkage myself. BA took a good look at what was on offer and chose A380 on its own merits, and it was a big blow to 747-8i, given that Boeing redid the program forecast after BA chose the A380.

I agree that the A380 is a good fit, but the timing of the whole arrangement coupled with a long standing stated preference for the 748 makes me think that it was a 3 way deal.

BA gets thier planes at a very good deal, the UK gets some actual say in Airbus, and Airbus gets political support + a good order.

I do not know if there is any deal between BA and the UK government, but I think its very safe to say that the pressure FOR airbus on BA that the UK government was putting on them would reverse in full if Airbus told the UK to piss off over the A400M deal.

baroque · Sat Mar 14, 2009 12:23 pm

Quoting Scouseflyer (Reply 32):
Quoting Baroque (Reply 18):
Those guys all work for Airbus now as I understand so they could be transferred with the click of a mouse to pay off the RLI.

Isn't Filton being sold / has been sodl to GKN so A350 components and A400M wing work isn't / won't be being done by Airbus so it wouldn't be EADS' decision anyway

Done and if you look at the Flightglobal link, GKN are already on the case and have built A350 spars at least.

I put in the Tele link above (sorry about using the Tele causes me more angst than you probably!) to show the arguments about the intellectual property issues about how to build plastic fantastic wings is a live concern.

The click of a mouse relates to a situation where Airbus COULD be in a position to move the wing work AND keep all the knowledge in the staff just by the transfer of the work with the click of a mouse on a contract change and another to offer work for all those guys and gals in Germany, Toulouse, or Spain where I rather gather quite a few of them spend quite a bit of time as it is.

It could end up with the A400M purchase being the stick to allow the donkey to get at the A350 carrots as it were. I thought the Hansard extract was useful in showing the general attitude of government to the A350 in particular and continuation of manufacture for aircraft in general. There may be much later and more relevant bits of the HoC proceedings but I don't watch it as a regular occupation!!! So I will just have to hope that one of you good folk or Google will sic it as they say to sheepdogs around here.

Interesting question, if the Conservatives get back in what would they want to do? Continue the Thatcher policies and say ta ta to the rest of industry or put the ship of state into a selective form of reverse?

Alessandro · Sat Mar 14, 2009 2:20 pm

Let say that some big customer pulls out of this project, I´m then convinced that they lose the parts they´ll manufacture. Others non buyers could be very interested in buying A400Ms
(like Finland and Sweden) if they get some parts to manufacture.

redflyer · Sat Mar 14, 2009 2:31 pm

Quoting Alessandro (Reply 35):
Others non buyers could be very interested in buying A400Ms
(like Finland and Sweden) if they get some parts to manufacture.

Would Finland and/or Sweden have a need for more than a handful of airframes? I don't think any orders they could place would make up for the loss of an order from the UK.

Stitch · Sat Mar 14, 2009 5:27 pm

Quoting Alessandro (Reply 35):
Let say that some big customer pulls out of this project, I´m then convinced that they lose the parts they´ll manufacture.

But that just delays the project even more, because new suppliers need to be found and those suppliers need to build-up infrastructure and train staff before they can start delivering. Also, Airbus Military unilaterally breaking a contract with a supplier would be expensive either because it triggers compensation already written in or the supplier would sue for breach of contract.

So if, for example, the RAF just outright says to the MoD "we cannot wait - give us a mix of C-17s and C-130Js to meet the same need" and the MoD cancels their A400M order, I don't see Airbus Military calling Filton and telling them to stop production of A400M wings. I also don't expect Airbus Commercial to call Filton and tell them to not bother preparing to build A350X wings, either.

baroque · Sat Mar 14, 2009 8:11 pm

Quoting Stitch (Reply 37):
So if, for example, the RAF just outright says to the MoD "we cannot wait - give us a mix of C-17s and C-130Js to meet the same need" and the MoD cancels their A400M order, I don't see Airbus Military calling Filton and telling them to stop production of A400M wings. I also don't expect Airbus Commercial to call Filton and tell them to not bother preparing to build A350X wings, either.

All true, but the call would be about redistribution of later work on the A350 wings and how this could be moved to G, F or S. Or an "invitation" to GKN to move its plant (again!). RLI was in part to assist BAe as it was and RR but equally to located production facilities within the UK. The HoC report makes that more than clear.
http://www.publications.parliament.u...0405/cmselect/cmtrdind/151/151.pdf
7. The SBAC told us that the UKAI is one of the most significant sectors in the UK economy, comprising 2,500-3,000 companies, and adding: "high value in economic, technological and social returns both nationally, and across the regions".7 Table 3 (above) shows the size of UKAI companies relative to companies elsewhere in terms of aerospace turnover in 2003.
8. The considerable economies of scale available to the aerospace industry and the ever increasing cost of developing new aircraft and engines, have encouraged greater international collaboration and fewer 'prime manufacturers' of complete airframes or engines.8 There are currently two 'prime' manufacturers of large civil aircraft: one American (Boeing) and one European (Airbus) with British participation. There are three prime manufacturers of civil aero-engines: two American (General Electric and Pratt & Whitney) and one British (Rolls-Royce), all of which manufacture both civil and military engines. There are also a number of manufacturers of airframes and engines for smaller regional aircraft. Each prime manufacturer obtains components from many different parts of the world, and all have collaborative arrangements with firms in other countries.
9. In the UK, and elsewhere, there is considerable interdependence between the military and civil sides of the aerospace industry. Not only do the major UKAI companies produce for both markets, but much of the technology is common to both.
...
Contribution to GDP
11. In 2003, UKAI turnover for UK-based aerospace activity stood at £17 billion and its
contribution to UK gross value added (GVA) was just under £6 billion. This was
approximately 0.6 percent of UK GVA and four percent of value added by the UK's
manufacturing industry as a whole.18 However, the SBAC told us that the direct economic activity of the UKAI was also supported by an additional indirect contribution of 0.7 percent of GVA from the industries' supply chain, raising its overall contribution to 1.2 percent of UK GVA.19
Contribution to UK Trade
12. The UKAI is one of the UK's major export sectors and is a "significant earner of foreign exchange for the UK",20 generating a trade surplus of just over £2.5 billion in 2003.21 The UKAI generated exports of an average £100,000 per employee between 1999 and 2003. This compared to an average in UK manufacturing overall of £42,000 per head in 2001. During the same period, the UKAI contributed an average of £17,000 per employee per
annum to the UK trade balance, compared with manufacturing overall, which had a trade deficit of an average £9,000 per employee per annum. UKAI's aerospace exports have increased their share of world markets from 6.5 percent in 1992 to ten percent in 2001.
....
Employment
13. Employment in the UKAI has increased steadily from around 99,000 in 1995 to 122,000 in 2003, 0.4 percent of total UK employment, and three percent of total UK manufacturing employment.23 The SBAC told us there are also an estimated 134,000 employees elsewhere in the UK which are supported in the supply chain to the UKAI, giving a total of both direct and indirect employment in the wider supply chain of just over 255,000.

2009 is not 2003, but I will bet many of the same considerations apply, but just a bit more so.

redflyer · Mon Mar 16, 2009 2:51 pm

Just released on Flight - a better insight into what EADS wants and what the alternative events might be:

Quote:
EADS has drawn up a shopping list of A400M contract renegotiation demands - it includes a revised delivery schedule, new delivery standards, slowed production ramp-up, lower penalties and generous allowances for inflation.

Or, the programme could be axed if OCCAR, the procurement agency representing European customer nations, decides to exercise its right, from 1 April, to get out. Swinging that sword of Damocles would force EADS to give back €5.7 billion ($7.27 billion) of advance payments.

http://www.flightglobal.com/articles...-reality-yet-to-bite-for-eads.html

Lumberton · Mon Mar 16, 2009 4:25 pm

Thanks for posting the link, RedFlyer. Curious that this article has no byline? Anyway, the salient point is this:

Quote:
But this being Europe, politics will probably save the programme. Termination, or even just cancellation of some individual aircraft, would destabilise intra-European relations at a time when economic crisis demands unity and jeopardises a huge number of jobs.

In the end, the airbus countries will cave and EADS will get their renegotiated contract.

757gb · Mon Mar 16, 2009 5:40 pm

Quoting Lumberton (Reply 40):
In the end, the airbus countries will cave and EADS will get their renegotiated contract.

Could be, however this other statement is loaded:

Quote:
EADS statements on the A400M look at best aspirational. "Revised industrial plans to complete the A400M programme could lead to a significant charge," it warns. It's an early contender for understatement of the year. [/quote]

I'm curious as to what will weigh more. No easy answer on that one... I suppose it depends on what real number that "significant charge" translates to. And there are probably too many uncertainties to even estimate a ballpark figure.

Stitch · Mon Mar 16, 2009 8:41 pm

At this point, it's likely more then just jobs at stake.

If the A400M program is canceled, that is going to be a huge blow to Europe being a major player in the tactical military airlifter business. Off the top of my head, I can only think of the Alenia C-27J Spartan and the EADS CASA C-295 and both of those are smaller then the C-130.

So a cancellation of the A400M would both secure the future of the C-17 and C-130 and breathe new life into the An-70. Additional improvements to the C-130 program could probably make it wider and taller to take larger modules and improved engines and wings could raise it's load lift, as well.

So at this point, I expect the desire to retain a credible defense industry will ensure the A400M enters full production and customer service, whatever the costs in time and money.

osiris30 · Mon Mar 16, 2009 9:36 pm

Quoting Stitch (Reply 42):
If the A400M program is canceled, that is going to be a huge blow to Europe being a major player in the tactical military airlifter business. Off the top of my head, I can only think of the Alenia C-27J Spartan and the EADS CASA C-295 and both of those are smaller then the C-130.

So a cancellation of the A400M would both secure the future of the C-17 and C-130 and breathe new life into the An-70. Additional improvements to the C-130 program could probably make it wider and taller to take larger modules and improved engines and wings could raise it's load lift, as well.

Stitch, here's the problem with that line of arguement. The US has their airlift, and will for the foreseeable future order homebuilt airlift. That leaves Russia, China, India and the EU. Russia won't order A400Ms, nor will China. That leaves India and the EU. If the EU decided they couldn't afford the A400M at the new prices (note liberal use of couldn't afford) then there is no market to give away to the US.

I keep hearing how cancelling the A400M would leave the lift market to the US, but really, it's not much of a market and may cost far more than it's worth at this point. Not saying this is the case, but I think it's worth discussing.

Stitch · Mon Mar 16, 2009 11:03 pm

I really just think they're in too deep to give up on it now unless the plane just doesn't work.

If the TP400 burns almost as much fuel as the F117-PW-100 or the plane lifts 17t instead of 37t then I can see a cancellation because at that point it is worthless, but I don't think we're going to see performance misses anywhere near that extreme. Wink

keesje · Mon Mar 16, 2009 11:07 pm

I think its very interesting to speculate on what would happen if the A400M. The comments I heard from Germany. France, UK and Spain point in another direction. But pls don't let that withhold you Big grin

On possible future customers, lets take for reference current C-130 operators, An24 / Ill 78 operators That gives something like http://en.wikipedia.org/wiki/List_of_C-130_Hercules_operators plus dozens of Antonov and IL-76 operators.

osiris30 · Tue Mar 17, 2009 1:41 am

Quoting Keesje (Reply 45):
I think its very interesting to speculate on what would happen if the A400M. The comments I heard from Germany. France, UK and Spain point in another direction. But pls don't let that withhold you Big grin

Not sure the point you were trying to make. If you average out the C-130 sales you get ~44 a year (over 50 years). If I look at c-17s I get roughly 12 a year at 15 years. I see the market for the 400M being somewhere in the middle (logical conclusion based on size), probably slightly more in the C-17 space than the 400M.. so let's say ~20-~25 a year. Hardly a huge marketplace.

That is also of course assuming we think military buying will ever get back to the levels it was during the cold war (probably not realistic).. That means the ~20 a year number is probably closer. That's a lot of investment in a small program (considering the investment eclipses that required for the 350XWB which is likely to see an average of far more than ~20 frames a year over its life).

I'm sorry, but I fail to see how the numbers add up any way you slice it.

astuteman · Tue Mar 17, 2009 6:58 am

Quoting Revelation (Reply 16):
It's interesting to hear these reports out of the UK. They no longer hold EADS stock, and felt that they got ripped off when selling their stock due to the withholding of information about the A380 program by Forgeard et al.

Spelling lesson for you guys..
1. Companies
2. Countries
Smile

UK didn't hold EADS stock - it was BAE Systems

Quoting Lumberton (Reply 17):
Quoting Revelation (Reply 16):
Will EADS take away some of the wing work in punishment should the UK refuse to accept their A400Ms?

IMO, that possibility will factor into any UK decision

No it won't. EADS have long-term contracts in place with GKN that are nothing to do with HMG

Quoting Osiris30 (Reply 20):
EADS is not in a position of strength with the UK on this. The UK can walk from the deal according to the contact. If EADS reciprocates by wanking wing production you can bet there will be a political s**t storm the likes of which you haven't seen in a long time.

No. There'll be one of the biggest law suits in history filed by GKN...

Quoting Revelation (Reply 28):
Yes, I agree EADS will threaten to move the A350 wing work

Respectfully I disagree.
Having made the commitment and technical investment in GKN's workstreams, across the whole Airbus range, the wings ain't going nowhere....

Rgds

SEPilot · Tue Mar 17, 2009 9:51 am

This talk of moving the wing work is the most ridiculous I have ever heard. It's not like there are a whole bunch of companies out there equipped and with the requisite experience to do it. If Airbus was foolish enough to make such an important decision on the basis of whether or not the British government decides to bail on the A400, then Airbus is in deep, deep trouble and will probably end up falling on their face. The biggest problem Airbus has is political influence in business decisions; if they make this one it will take the cake.

bennett123 · Tue Mar 17, 2009 10:01 am

Even if this was technically/financially viable it must impact on EIS.

What Airbus needs is EIS ASAP to minimise the lead built up by the B787.

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