Airbus fury as Poland scraps helicopters deal and gives Lockheed $3.5bn order instead

October 11, 2016 Updated: October 11, 2016 06:19 PM

Airbus has lashed out at Poland for scrapping a 13.5 billion-zloty (US$3.5bn) helicopter deal and handing orders to rivals apparently without a tender process, saying it will seek remedies in a dispute that has boiled over into an international diplomatic incident.

The Airbus chief executive Tom Enders said on Tuesday that the Polish government had “slammed the door” on his company, which appeared to have “been misled for months”, adding that it has expended huge amounts of effort and cash on the bid and “will of course seek remedies”.

“Never have we been treated by any government customer the way this government has treated us,” Mr Enders said hours after the Polish defence minister Antoni Macierewicz revealed that a batch of helicopters would be bought from the US defence giant Lockheed Martin and that Leonardo-Finmeccanica of Italy could also expect orders.

France-based Airbus is fuming after an April 2015 outline deal to supply 50 H225M Caracal multi-role helicopters in Poland’s second-biggest military order ever was scrapped on October 4, with the prime minister Beata Szydlo saying it represented poor value in terms of the so-called offset work granted to the country for placing the order.

The French president François Hollande postponed an October 13 visit to Poland following the decision and will review the continuation of military pacts between the nations, according to French defence ministry advisers.

Airbus followed up on Tuesday with an open letter to Mr Szydlo saying the Caracal deal would have provided more offset revenue than the helicopters are worth, creating 1,250 new jobs plus 2,500 in the wider economy and transforming a maintenance plant in Lodz into a “world-class” production facility.

Airbus – which is already reviewing helicopter output as part of a broader restructuring as demand shrinks – had also agreed to extend the validity of its pitch until November 30 and made further concessions the day before the deal fell apart, it said.

Poland said that Lockheed Martin and Leonardo, which lost out to Airbus in the original bidding, will now be asked to supply helicopters from their existing plants in Poland, with the US company producing two Black Hawk models this year followed by eight more in 2017. A further 11 machines are likely to be purchased for 2018, it said.

The deal with Airbus, part of Poland’s plan to boost defence spending amid conflict in neighbouring Ukraine, was signed by the former government and opposed by Mr Szydlo’s Law & Justice party at the time. The prime minister said this week that the award had ignored the capabilities of Lockheed’s Sikorsky plant in Mielec and the Swidnik facility of Leonardo’s AgustaWestland.

While Mr Szydlo stressed that equipment for the Polish army should be “produced in Poland”, Airbus said its offer was the only one that would have created new jobs in the country, guaranteeing production of at least 50 Caracals there and creating a new state-owned business with export potential.

Airbus said the Caracals themselves would have cost 10.8bn zloty, whereas Poland had sought an offset value of 13.4bn zloty that included value added tax, something which while “not standard practice” it accepted. Poland has said the helicopters alone would have cost 13.5bn zloty and that the offset sum would have been less than that.

Unspecified new offsets sought by Poland in August would have broken European Union rules, Airbus added

Dominika Bochnak, a spokeswoman for Lockheed Martin’s Polish unit, declined to comment or elaborate on the status of the Black Hawk orders.

Original post @thenational.ae


Related post:

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Poland breaks off negotiations with Airbus Helicopters over military tender

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