German defense spending has hampered plans to increase production of Eurofighter Jets, Airbus’ chief said.
Despite a push from NATO to increase production, the company was unable to scale down as the Russian war against Ukraine nears its first anniversary.
Michael Schoellhorn, chief executive of Airbus Defence and Space, said that Berlin’s restrictive attitude on arms exports to Ukraine played a part in the delays.
He said that defense exports in the billions were being held up.
Since the start of war in Europe, NATO members have pledged billions of dollars in additional defense spending. Germany alone has promised EUR100bn. Orders for the most costly hardware, like fighter jets and ships, have not yet materialised.
Germany’s slow approach to arms donations has been criticized. This has prevented exports from Germany as well as other countries with German equipment. After months of pressure from its allies, Berlin finally agreed to send the Leopard 2 tanks Ukraine last month.
Reuters was told by Mr Schoellhorn that several orders, including for the A400M military transport aircraft, had been placed with the Berlin government. Although he declined to provide details, he said that the deals were worth “multiple billions of euros”.
At the Munich Security Conference, he stated that “Currently we do not have the orders to increase our speed. We are waiting for the orders to confirm that we can continue to run the lines.”
“Several countries are interested the A400M. We are having difficulty getting the German export licenses in time.
Last year, Olaf Scholz, the German chancellor, promised a Zeitenwende (or’seachange’) in the country’s approach to military expenditures, promising to increase investment in offensive capabilities.
Schoellhorn stated that he had not received any contracts from Zeitenwende yet and that important exports were not being approved. This leaves us in an extremely difficult situation.
Airbus will instead concentrate on the production of ammunition and tanks for Ukraine, as plane orders are being delayed.
A top Airbus investor has also accused Airbus of providing a bailout to a French company.
Chris Hohn, City of London hedge fund manager, demanded that Airbus stop purchasing a mere 30 percent stake in Evidian.
Atos, a French software company, is in deep debt and is currently spinning off Evidian (its online identity management business).
TCI wrote to Airbus claiming that the deal was not good for shareholders but rather “politically motivated”. TCI cited an Atos press release that stated the deal would ensure “technological sovereignty” in France.
According to Mr Hohn’s TCI hedge-fund, Evidian counts the French military among its customers. Airbus should instead focus on building aircraft.
Airbus claimed that the move was beneficial for its cybersecurity efforts.