July 6, 2017 / 7:56 PM / 20 days ago

'No free passes' for German firms in helicopter tender - German ministry

3 Min Read

BUECKEBURG, Germany (Reuters) - The German defence ministry on Thursday said there would be no "free passes" for any bidders in a nearly 4-billion-euro helicopter deal, a day after Europe's Airbus urged the government to ensure German firms got a big share of the pie.

German defence officials have said they want a low-risk heavy-lift helicopter that already exists, which means the likely supplier will be one of two U.S. firms - Lockheed Martin Corp (LMT.N) with its CH-53K, or Boeing Co (BA.N) with its CH-47 Chinook.

Airbus on Wednesday said choosing German firms to manage and service the new helicopters would secure German jobs, speed certification and ensure German sovereignty. Any other decision would harm the German helicopter industry, it said.

A spokesman for the ministry said Germany had no “buy German” requirement for helicopters, only key technologies such as encryption.

"Competition is a very important factor in this case," he said. "There won't be any free passes for anyone."

Airbus, MTU Aero Engines and six other firms on Wednesday announced at a helicopter conference in northern Germany that they had signed a partnership agreement to push for a big German role in managing the new helicopter.

Airbus, which currently services nearly all German military aircraft, and the other companies, urged Berlin to award separate contracts for buying and servicing the helicopters.

The defence ministry said it would decide this summer how to structure the deal and a "request for proposals" would likely go out to industry next year. But it said its general preference would be to deal with one lead contractor.

A second source said the decision was expected this month, but it could become a political football ahead of the Sept. 24 national election, given the jobs at stake.

Lockheed Martin's Sikorsky helicopter unit said it was finalising "exclusive relationships" with several German companies, but did not name them.

Nathalie Previte, vice president of strategy and business development for Sikorsky, said the company's goal was to sign agreements with German firms that would be "strategic partners in the areas of sustainment and aircraft content."

Boeing already has close ties to over 100 companies in Germany as part of its global commercial and military supply chain, and those could grow if Boeing wins the competition, David Koopersmith, who heads Boeing's vertical lift programmes, told Reuters at the conference.

Boeing last month awarded German firm COTESA GmbH a five-year contract to manufacture key components for the Chinook heavy-lift helicopter.

Melanie Wolf, a spokeswoman for MTU, said her company wanted to support the German aerospace industry.

"We want to maintain technology competencies in Germany, but for that we need German industry and orders for that industry," Wolf said.

Reporting by Andrea Shalal; Editing by Elaine Hardcastle

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