01 September 2013

The A350 XWB enters in the campaign for the German Federal Election.

Airbus presses current German government to complete the pending payment in order to avoid missing the 19% of the workload and Germany wants commitments on job allocation not only for A350 XWB program.

With the German election looming over the horizon in September, as well as the French economy in the doldrums, jobs are a sensitive issue where political interference props up again.

German daily newspaper Die Welt has reported that talks between Airbus and the German government had broken down over the payment of a loan of 623 million Euros ($825 million) for the development of the A350 XWB, citing documents sent by Airbus to its sites in Germany. The payment is due for 26 months.

Germany's economics ministry has said it remains open to talks with Airbus and expects a "constructive solution" in the row between the company and the government over funding for the A350 XWB and guarantees for jobs in Germany.

Airbus tends to finance the development of new models with loans from Germany, France, Spain and the U.K., and repays them once the models are sold.

Germany has already paid EUR500 million toward the A350's development cost and is holding back on freeing up the remainder of the loan to get assurances that it will get its fair share of work on the next-generation Airbus medium-haul, single-aisle aircraft.

Die Welt reported Airbus blames the government for the "failure" of negotiations due to its withholding of the funds, and the article said the company warns of far-reaching consequences for German sites and employees.


According to Airbus, the German share of the work on the A350 is 34%, but so far Berlin has only paid for 15%, Die Welt said, meaning Airbus will have to reduce the amount of work conducted in Germany, with hard consequences for German locations and employees.

The ministry said the announced step by Airbus is "not comprehensible" since the 2 sides have come closer on their positions in recent talks.

"The outstanding loan amount is about taxpayer money, and its payment can therefore only be carried out under certain conditions," ministry spokesman Holger Schlienkamp said in an emailed response to the Welt article. "Airbus has agreed to strengthen Germany's R&D research and development capacities, on this point the economics ministry expects concrete suggestions and their implementation".

“The German government will work closely (with EADS) during the upcoming restructuring process and will place great importance on Germany’s interests as an industrial location,” German economy minister Philipp Roesler commented some weeks ago.

At issue is Germany's insistence on getting more work on future A30X series, notably some responsibility for design and research, work that is currently carried out at Airbus' headquarters in Toulouse, France.

Based on the article “A350-Streit zwischen Regierung und Airbus eskaliert” published in Die Welt and based on the article “German Economics Ministry: Solution Possible on Airbus A350 Launch Aid” published in Wall Street Journal.

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