Russia to buy 20 percent of Airbus? EADS says no.

European news services are reporting that EADS is negotiating to sell Russia a 20 percent stake in its Airbus division. But EADS has issued a categorical denial that such discussions are taking place.

Sources in Moscow tell Capital, a French business magazine, that Russian Vice Prime Minister Boris Aleshin will travel to Paris for talks with EADS CEO Louis Gallois. The Kremlin-owned Vneshtorgbank (VTB) bought up 5 percent of EADS stock, an action that the regime of Vladimir Putin calls a "strategic action" on the part of the Russian state.

The Spanish financial news website Finanzas.com carries a report. Airbus and EADS CASA have substantial Airbus manufacturing facilities in Spain.

According to the report in Finanzas and other Spanish media, EADS rejected Russia's stated desire to buy up to 20 percent of the entire company, but now "has finished convincing its Russian interlocutors of another, more acceptable scheme: instead of increasing its stake in EADS - that manufactures strategic military materials - politically, Russia would be admitted with greater ease as an important shareholder of its civilian brother Airbus."

EADS insists to the Spanish news agency EFE that the report is untrue.

French & Russian EADS ownership seen as problem for US national security

The large ownership stakes of the French and Russian governments in EADS are becoming more and more of a problem on Capitol Hill and in the Pentagon.
The British defense company BAE, which is co-building the stealthy F-35 joint strike fighter, has had problems getting some of the super-sensitive US technology it needs to be part of the American-led project.

But the Guardian reports, "EADS faces even stiffer hurdles: its main owners are German and French, with the French state's 15% holding unpalatable to US political leaders."

And EADS is fighting to grab a big part of the Pentagon budget.

What's worse is that the Kremlin has quietly bought up another 5 percent of EADS through a state-owned bank, and it may seek to buy more. That troubles more and more people in Washington as they learn about it.

Promised EADS facilities in US will give Eurosocialists & Putin political clout

With EADS CASA suppliers, assembly plants and service facilities carefully chosen among key congressional constituencies, the Eurosocialists and the Kremlin are building a powerful political base to lobby Washington.

"The company has been busy building domestic political support for a program that would ultimately involve billions of dollars and thousands of jobs. In 2005, EADS bought a facility in Mobile, Ala., close to a port that can handle oversize cargo. The company has pledged to convert the plant into an Airbus assembly line if the Air Force buys the A330 tanker," Air Force magazine reports.

"The company also has been recruiting talent with the technical know-how (and political connections) to get deals done in Washington. In 2004, EADS hired retired Air Force Lt. Gen. Charles H. Coolidge Jr., who had just retired as vice commander of Air Force Materiel Command at Wright-Patterson AFB, Ohio, to oversee the tanker program and other Air Force efforts.

"Other retired military officers have come on board. Last year, the company elected Les Brownlee, former Senate Armed Services Committee staff director, and acting Secretary of the Army for 18 months, to the EADS North America board of directors.

EADS hopes military orders will keep company afloat

EADS is hoping that the American taxpayer will ease the financial collapse precipitated by its Airbus division.

According to El Pais of Madrid, Airbus financial chief Hans Peter Ring is hoping "that the rest of the activities in defense, space, helicopters, military transport, etc., will neutralize the fall of Airbus."

National Guard Association doesn't want C-295

The National Guard Association of the United States does not want the EADS CASA C-295 transport plane, preferring a faster aircraft.

The NGAUS's annual report for fiscal year 2004 recommended that Congress fund a competitor, the C-27, produced by EADS CASA rival Finmeccanica of Italy.

NGAUS doesn't say why it didn't want the C-295. But there's no better judge about what plane is better for the troops than the troops themselves.

'Gross management blunders' plague EADS

"The average jetliner is struck by lightning twice a year," columnist George Will writes of EADS in today's Washington Post. Airbus, he says, "has recently struck itself twice. The government-created European consortium decided to build the wrong aircraft, then built it badly."

Will looks at how the once-highflying EADS is now in a corporate freefall, with the market judging its "A350 inferior to the [Boeing] 787" and forcing "costly redesigns," and making "a bad $16 billion bet on huge demand for its A380, a double-deck superjumbo."

The A380, he says, has been plagued by "gross management blunders."

EADS: Canada unfairly requires planes that fly

No fair! That's what EADS is crying about Canada's requirement that it won't agree to buy aircraft until there's proof that the planes can fly as advertised.

The European aircraft manufacturer is competing with Lockheed Martin to supply Canada with military transport planes. EADS is upset that the Canadian Department of National Defence acquisition policy "stipulated that competing aircraft had to complete a flight test by the time the contract was awarded in summer 2007. That rule automatically eliminated the EADS Airbus A400M, which would not be available until 2008, leaving the [Lockheed] C-130J as the only option," DefenseNews.com reports.

US Coast Guard receives the HC-144A - But do the pilots want to fly them?

The United States Coast Guard has received the first EADS CASA HC-144A, a derivative of the CN-235/C-295, with advanced equipment for coastal patrol and surveillance, Finanz Nachrichten of Germany reports.

"The HC-144A's delivery is further proof of EADS North America's continuing strong support for the US Coast Guard and its mission to keep America safe and secure," puffs EADS North America Chairman and CEO Ralph Crosby.

But do Coast Guard pilots prefer the plane over others? One Coast Guard vet involved with the program in Washington loves the HC-144A, and says that critics are only trying to sabotage the mission. But we hear differently from pilots, and top Coast Guard officers have expressed safety concerns about the planes. Did Senator Richard Shelby of Alabama improperly pressure the Coast Guard to take the planes, at the behest of his former aide who is a lobbyist for EADS? Stay tuned.

Canada calls EADS transport a 'paper airplane'

Smacking down the yet-to-be-produced EADS CASA A400 as a possible search and rescue plane, a Canadian Department of National Defence spokesman quips, "We don’t buy paper airplanes."

EADS CASA President Francisco Fernandez has acknowledged that the A400 is still suffering from about a dozen "difficulties" in "areas that present a critical risk," but said that the company was working on them.

The DND's apparent decision not to have a competitive bidding process to replace the Lockheed C-130 has irked some military observers, including a Halifax contributor who argues that Canada should not "sacrifice competition" (a reference to the EADS CASA C-295) for "speed" (the faster Alenia C-27J).

Spanish defense chief downplays EADS-Chavez deal

An American businessmen meeting with Spanish Defense Minister José Antonio Alonso asked an unwelcome question about the aborted EADS CASA plan to supply Venezuelan dictator Hugo Chavez with military transport planes.

Alonso seemed taken aback by the query, which was met with "murmurs and laughs" in the auditorium, Europa Press reports. He brushed off the American concerns, saying the issue was "old and antique."

The meeting took place at the Palace Hotel in Madrid on January 15 (pictured).

EADS CASA found itself in a pickle in Washington when it became known that the company was trying to sell Chavez the very same C-295 planes that it was attempting to sell the Pentagon as the new Joint Cargo Aircraft.

The Bush Administration embargoed US-made parts from the C-295s being sold to Chavez in early 2006. Faced with political pressure in Washington and considerable opposition from the blogosphere, EADS CASA canceled the deal a few months ago.

Poland: EADS CASA unreliable on C-295 deal

As part of its 2001 deal to sell Poland 10 transport aircraft for $300 million, EADS CASA was to have made good on "offset obligations," but Warsaw doesn't see signs that the company will meet them.

Deputy Economy Minister Pawel Poncyliusz intends to bring up the matter with Spain, according to Rzeczpospolita, a major Warsaw daily. EADS CASA has until 2010 to invest in a Polish offset program, but has made little indication that it will comply. Poland has already paid EADS CASA $212 million for delivery of C-295s.

"We are concerned, as so far the European manufacturer hasn't announced and submitted any completed projects to the government for appraisal," a Polish Department for Offset Programs official says.

Among Poland's complaints:

• EADS CASA has failed to fulfill its pledge to manufacture major Airbus components at the Okecie plant the company had acquired as part of the offset program;



• EADS CASA has not equipped a promised C-295 service plant in the country, requiring the Polish military to have its already-purchased planes serviced in Spain; and



• EADS CASA has not gone through with starting large-scale production of transport aircraft components at Okecie for the CASA plants in Seville and Cadiz, Spain.

"All that happened was that bundles of electric cable for aircraft and wing components were ordered from Poland," the official said.

Zbigniew Wasiucionek, who runs foreign marketing operations at EADS PZL Okecie, "declined to comment" on the company's policies.

According to the report, EADS CASA initially repaired the neglected Okecie plant, rebuilding a galvanizing shop, bringing in a new management system, repairing roofs and training employees. "But it lacked the will to do anything more."

Why would EADS CASA want to sell slow search & rescue planes to a country the size of Canada?

Comment: In search and rescue operations, speed and distance are essential. As one of the largest countries in the world, Canada needs fast planes to cover its huge landmass and coastline.

EADS CASA appears indignant that Canada would want a search and rescue plane that's faster than the European manufacturer's C-295.

Here's some news for EADS: Canada isn't Europe. France, Germany, Spain and a few other European countries could fit comfortably in Quebec alone. Canada's 125,000 mile coastline, stretched out, would reach halfway to the Moon.

From an American reference point, the state of Montana is larger than Germany. France is less than twice the size of Colorado. And Spain is even smaller than France.

No wonder EADS CASA doesn't build a search and rescue plane designed for speed. Its main customers are so small geographically that they don't need one. Which is probably why Canada is holding out for something better.

EADS partnership with Russians raises security questions

Defense policymakers in Washington are becoming increasingly concerned at the collaboration between EADS and Russian state-owned military aircraft enterprises.

"We value EADS as a defense partner, but we're troubled by the company's growing closeness with the Putin regime," says a veteran defense analyst close to the White House. "As it did with Hugo Chavez, EADS is getting to the point that it's going to have to choose between the Russian government and the United States military," he said.

Prompting was the comment was news from RIA Novosti, a Kremlin-controlled media outlet, that EADS is set to build transport Airbuses outside Moscow in partnership with Russian military aircraft companies.

The Russian partner is the United Aircraft Building Corporation (UABC), a state-controlled conglomerate that RIA Novosti says "will incorporate commercial and military aircraft makers such as MiG, Sukhoi, Ilyushin and Tupolev, as well as companies involved in distribution, including Aviaexport."

EADS CASA complains that Canada wants a better plane than it can deliver

EADS CASA has been complaining that the Canadian government has been setting standards too high for a new search-and-rescue aircraft.

Like the United States with its upcoming Joint Cargo Aircraft (JCA), Canada is deciding between the EADS CASA C-295 and the Spartan C-27J built by Finmeccanica of Italy.

However, EADS CASA is griping that Canada expects too much in terms of performance, and says it can't compete with the C-27J under such demands.

According to Reuters, "EADS-CASA has for years complained that Canada is looking for a plane faster than its C-295."