Friday, February 19, 2010

UPDATE 2-Buyers resubmit "final" A400M offer -Germany

* Nations ready to accept 2 bln eur cost increase -ministry
* Nations refuse to discuss financial, technical matters
* Statement leaves uncertainty over key loan definition
By Sabine Siebold
Defense News ~ BERLIN, Feb 19 (Reuters) - Buyer nations resubmitted a 3.5 billion euro bailout plan for the A400M military transporter plane on Friday and told Airbus parent EADS (EAD.PA) it was their "final" offer, a German defence ministry spokesman said.
The spokesman said the terms of the rescue package were unchanged from a previous offer of aid for the troubled European troop plane and suggested buyers had snubbed efforts by EADS to keep negotiating on some of the finer details of the rescue plan.
Spiralling costs and delays have threatened Europe's largest defence project and left EADS with a 5.2 billion euro loss.
Fearing damage to its core airliner business, the Airbus parent is negotiating a rescue plan with buyers representing Britain, France, Germany, Spain, Belgium, Luxembourg and Turkey.
The German spokesman said the seven NATO partners were ready to accept a cost increase of 2 billion euros for the transporter and to offer export guarantees of 1.5 billion euros.
However, they were rejecting further negotiations on financial or technical matters, at least for now.
"The buyer nations put forward their final offer on February 19th," the spokesman said.
"They are sticking to the position they took on February 15th. They accept price increases of 2 billion euros and said they were prepared to offer export guarantees of 1.5 billion euros."
EADS declined comment.
Sources familiar with the matter said on Thursday EADS had agreed a core package of 3.5 billion euros of support with buyers but that it had asked to renegotiate a price inflation clause and defer installation of some complex military kit.
An official from one buyer nation said the purpose of the latest letter was to send EADS a reminder that its offer was the last one on the table following months of talks. EADS is under pressure to accept and end suspense over the future of 10,000 jobs.
The German statement did not say how the 1.5 billion euro guarantees would be structured -- another key point holding up completion of EADS results due to be published on March 9.
Even with the proposed support, EADS faces losses of 1.7 billion euros on the multinational project, on top of 2.4 billion euros already provisioned in its accounts.
This could rise to 3.2 billion euros if guarantees are classified as a loan, forcing it to provision for extra losses.
In France, an aide to defence minister Herve Morin said the country remained optimistic of a long-awaited final deal.
"There are discussions. We let them take their course and are not commenting for now. We are fairly optimistic," he added.
Germany and France, with 60 and 50 aircraft respectively, are the largest customers for the propeller-powered A400M, which first flew in December and is due to be delivered in 2012.
Buyers have ordered a total of 180 planes to support global operations and fill a gap between the Lockheed Martin (LMT.N) C-130 Hercules and the larger jet-powered Boeing (BA.N) C-17.
(Additional reporting by Tim Hepher, Gerard Bon; editing by John Stonestreet)

General Dynamics Awarded USD$29 Million for RG-31 MRAP Independent Suspension Kits

Defense News ~ LONDON, Ontario, Feb. 19 /PRNewswire-FirstCall/ -- U.S. Marine Corps Systems Command (MCSC) has awarded General Dynamics Land Systems-Canada a USD$29.2 million delivery order to supply 127 independent suspension kits for its Mine Resistant Ambush Protected (MRAP) vehicle program. Â General Dynamics Land Systems, the Canadian company's parent corporation, is a business unit of General Dynamics (NYSE:GD - News).
The TAK-4 independent suspensions, produced by Oshkosh, will be installed in-theatre on to previously delivered RG-31Mk5EM vehicles to enhance their ride quality and robustness.
The contract was signed through the Canadian Commercial Corporation, a Crown Agency of the Canadian Government.
General Dynamics Land Systems – Canada, located in London, Ontario, Canada, is a business unit of General Dynamics Land Systems of Sterling Heights, Michigan.  For over 30 years, more than 2000 highly skilled technical employees have designed, manufactured, delivered and supported to global customers a unique family of light armoured vehicles (LAV).  More information on the company is available at
General Dynamics, headquartered in Falls Church, Va., employs approximately 91,700 people worldwide. Â The company is a market leader in business aviation; land and expeditionary combat systems, armaments and munitions; shipbuilding and marine systems; and information systems and technologies. Â More information about General Dynamics is available online at

Lockheed Martin F-35 Poised to be Backbone of USAF Fighter Fleet

Defense News ~ ORLANDO, Fla., Feb. 19 /PRNewswire/ -- The United States Air Force officially becomes the first F-35 Lightning II customer later this year, when the first of the stealth fighters is delivered to Eglin Air Force Base, Fla. The delivery will initiate a massive recapitalization of the Air Force's multi-role fighter fleet, and will usher in profound increases in capability, a Lockheed Martin (NYSE:LMT - News) executive said Friday.
"The first two production F-35s are in final assembly at Lockheed Martin's Fort Worth plant, and the training wing at Eglin is primed to receive them and get their pilots in the seats," said Steve O'Bryan, Lockheed Martin vice president of F-35 Business Development and Customer Engagement. "The Air Force is by far the biggest F-35 customer, and the fact that the largest and most powerful air force in the world is staking its future on the capabilities of this aircraft speaks volumes." The Air Force plans to operate 1,763 F-35As, which along with the F-22, ultimately will replace all of the Air Force's current fighter fleet.
"The F-35 will be flown by the U.S. Air Force, Navy and Marine Corps, as well as our closest allies. This means that the USAF and the rest of the world's great air forces will be flying the F-35 together in the future," O'Bryan said. "The F-35 provides 'best value' in a package that not only deters hostilities but enhances interoperability."
Speaking Friday at the Air Force Association's Air Warfare Symposium at the Rosen Shingle Creek Hotel, O'Bryan pointed to the pillars of the F-35 program – affordability, survivability, lethality and supportability – and highlighted the F-35's value proposition. "As a 5th generation fighter, the F-35 is redefining the term 'multirole fighter' combining unprecedented situational awareness, net-enabled systems, sensor fusion, advanced sustainment, stealth and fighter performance in an affordable and supportable package."
With more than 150 test flights completed, all systems operating in F-35 aircraft, other surrogate test aircraft and laboratories, and 35 aircraft in assembly, the program is demonstrating steady progress toward meeting its commitments to the U.S. Air Force. Last November, AF-1, the first optimized conventional takeoff and landing variant (CTOL) aircraft, celebrated its initial flight, piloted by Lockheed Martin test pilot David "Doc" Nelson.
Of particular interest to the Air Force, the CTOL variant establishes new levels of operational availability. With simplicity and ease of maintenance designed in, the aircraft has unprecedented reliability and maintainability requirements, along with a reduced deployment footprint. The F-35A will provide unequaled multimission capability with a fraction of the support required by legacy fighters.
The F-35 Lightning II is a 5th generation fighter, combining advanced stealth with fighter speed and agility, fully fused sensor information, network-enabled operations, and lower operational and support costs. Lockheed Martin is developing the F-35 with its principal industrial partners, Northrop Grumman and BAE Systems.
Headquartered in Bethesda, Md., Lockheed Martin is a global security company that employs about 140,000 people worldwide and is principally engaged in the research, design, development, manufacture, integration and sustainment of advanced technology systems, products and services. The Corporation reported 2009 sales of $45.2 billion.
F-35 and Lightning II are trademarks of Lockheed Martin Corporation.
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