HELICOPTER DEAL

Airbus Takes Poland to Task

FILE - Airbus Group President and CEO Tom Enders attends the annual press conference of Airbus Group in Blagnac, Southern France, 26 February 2014. EPA/GUILLAUME HORCAJUELO (zu dpa «Airbus Zahlen 1. Quartal» vom 13.05.2014) +++(c) dpa - Bildfunk+++
Airbus CEO Tom Enders has some uncharacteristically harsh words after Poland cancelled a major order.
  • Why it matters

    Why it matters

    The decision by the Polish government to cancel the Airbus helicopter deal could damage its close military relations with France.

  • Facts

    Facts

    • The previous Polish government awarded Airbus a €2.7-billion contract to deliver 50 Caracal military helicopters.
    • Airbus says it offered to build a factory in Poland, share its technical know-how and create 6,000 jobs as part of the deal.
    • The right-wing Law and Justice party, which came to power at the end of 2015, canceled the Airbus deal citing Poland’s national security interests and has opted to go instead with Sikorsky, a subsidiary of Lockheed Martin.
  • Audio

    Audio

  • Pdf

The Polish government’s abrupt decision to cancel a €2.7-billion ($2.9-billion) contract with Airbus for 50 Caracal military helicopters has triggered a fierce backlash not just from the European aerospace giant, but also from the government of France – one of Poland’s oldest and closest allies.

In response to the failed helicopter deal, Paris has announced that it will cut military aid to Poland. French President Francois Hollande and his defense minister, Yves Le Drian, have also canceled a long-planned meeting with Polish officials in Warsaw.

Airbus, which has its headquarters in France, has taken the unusual step of publishing an open letter to the Polish government, publicly refuting Warsaw’s claims about why the helicopter deal was canceled.

“We have never before been treated by a government customer like the way the Polish government has treated us,” said Airbus Chief Executive Tom Enders.

The incumbent Law and Justice Party, which came to power at the end of 2015, opposed giving the helicopter contract to Airbus from the very start. Poland’s previous administration had awarded Airbus the lucrative deal over its competitors Sikorsky and Leonardo.

The cancellation couldn’t have come at a much worse time. Airbus is already dealing with delays in deliveries in military transporters that have dented its reputation – even in France and Germany, the two countries that effectively control the aerospace giant.

“Poland's government has slammed the door in our face. We have taken note of this.”

Tom Enders, Airbus CEO

Now, the right-wing Polish government led by Law and Justice has opted to go instead with Sikorsky, a subsidiary of the U.S. aerospace giant Lockheed Martin. There’s speculation in Paris that Law and Justice’s euroskepticism may have played a role in the decision to go with the Americans.

Law and Justice also has an economic interest in awarding the contract to Sikorsky. The company has factories in the electoral districts of several Law and Justice parliamentarians.

The Polish government invoked the country’s national security interests to justify canceling the deal and claimed that Airbus didn’t offer sufficient economic compensation for the fact that the company doesn’t have factories in Poland.

Airbus has adamantly rejected Warsaw’s claim that it didn’t include enough sweeteners. The European aerospace company said it offered to build a complete production line for Caracal helicopters in Poland, which would have been 90-percent owned by the Polish government.

“For the first time in Polish history, the country would have had a state-owned helicopter factory,” said Guillaume Faury, the head of Airbus helicopters.

Airbus also said it agreed to share its technology and offered to create 6,000 jobs in Poland in addition to the positions at the proposed helicopter factory.

“Airbus intended to invest in Poland in a major way and wanted to contribute to the creation of a competitive aerospace industry in the country,” Mr. Enders said. “But Poland’s government has slammed the door in our face. We have taken note of this.”

Mr. Enders threatened to take “appropriate measures” against the Polish government for canceling the helicopter deal, without going into further detail.

016 Airbus Group WTB 2015 - Neu 2016-03-11-01

 

While the argument with Poland may be more political, it’s not the first country that has shied away from an order with Airbus. Both the French and German defense ministries have recently announced plans to purchase new military planes from Lockheed Martin.

Their moves come after Airbus has struggled to deliver on major orders the two countries already placed for its A400 transporters. Germany has denied it is switching to Lockheed Martin because of the delays, insisting it merely wants to diversify.

 

Thomas Hanke is Handelsblatt’s France correspondent, based in Paris. To contact the author: hanke@handelsblatt.com 

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