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AIRBUS DELAYS A400M ENGINE AWARD

30 Apr 03. At a time when European defence leaders are requesting more R&D funds (See’EUROPEAN EXECUTIVES CALL FOR BETTER EUROPEAN DEFENCE COORDIANTION’, this issue and ‘HAS OBSTRUCTION TO US WAR IN IRAQ COST EUROPE VITAL ACCESS TO US DEFENCE TECHNOLOGY?’, April on-line issue), the announcement that Airbus was about to choose a Canadian engine from Pratt & Whitney could not have come at a worse time. Does this decision indicate confusion in the European procurement process at a time of dwindling engine orders for European manufactures or could it be a turning point to establish a truly international European engine industry. The European consortium includes French-owned engine maker Snecma, Britain’s Rolls Royce, Germany’s MTU and Spain’s ITP.

The engine element of a new aircraft accounts for 25% of the value of the project; the technology and jobs associated with engines including through life support are vital for the health of the European industry. It will not have escaped P&W’s notice that this is the largest military turbine order around in Europe today and to win it for the Canadian (P&W Canada parent is the giant U.S. UTC) would create a large gap in European capability and technology. Tow of the European bidding partners Rolls-Royce and SNECMA are world leaders with Rolls supplying all the engines fore the C130 project through its Allison subsidiary.

On April 30th, the head of Airbus said that Pratt & Whitney (NYSE:UTX – News) had made a bid to supply engines for the A400M military transport plane that was 20 percent lower than its rival.

But Noel Forgeard told reporters he had been asked to delay a decision to award Pratt the contract in order to give its European rival time to make a more competitive offer.

“If we had to choose today it would be Pratt. They made an offer that was much cheaper,” Forgeard said, noting that the offer was 20 percent below that of a rival European consortium. He added that he had planned to make an announcement on Wednesday choosing Pratt & Whitney to supply the engines for the A400M, but had received a call asking him to delay his decision. Asked whether the French government or European arms procurement agency OCCAR had contacted him, he replied “I will say OCCAR.” He said the EuroProp International consortium was working on reducing its offer and said it would have to cut it by around 20 percent to be competitive.

Europe used such projects as Meteor and Storm Shadow to cement the MBDA alliance, now a major power in missiles, why should the A400M project not create a European giant of similar nature?

Comment: Technology and R&D does not come cheap as the Americans have recognised. For Europe to succeed in these large projects the procurement process must be streamlined and a policy for R&D and industry put in place. The Editor visited the Science Museum in London last week and it is a sad reflection of the current U.K. engineering and science capability that so little of the latest technology comes from the UK or even Europe. This government has turned its back on industry preferring to shower its largesse on such industries as the legal profession where PFI projects have made huge sums for City lawyers and the Bloody Sunday Enquiry has alone cost the taxpayer a staggering £150m, with reports that three participating lawyers have been made millionaires in the process.

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