EADS relents on UAV spending deadline


EADS is prepared to keep spending its own cash on keeping the Talarion UAV project afloat till around the end of the year in order to give governments time to review their defence spending, a top executive says.

The European group had previously threatened to stop funding the roughly 3 billion euro drone project by summer if France, Germany and Spain did not decide whether to place an order, Reuters says. Government decisions have been stalled by urgent reviews being carried out in several European countries over weapons spending in the light of the region’s debt crisis.
“The project is on schedule. We have a preliminary design review coming up shortly and after that it would be good to have a commitment,” Stefan Zoller, who heads the EADS Defence and Security division, told Reuters in an interview. “But I am not blind to the fact that … a firm political commitment will be difficult at short notice, so we will somehow shift to the right and continue to pre-finance Talarion.”

EADS has so far spent around half a billion euros of its own cash on the medium altitude, long endurance drone project. “All nations are reviewing their defence priorities so I would assume things will become clearer more towards the end of the year,” Zoller said. Asked how long EADS would keep funding studies, he said, “we won’t continue forever but there is not a fixed deadline.”

French Defence Minister Herve Morin said this week France was looking at buying Predator drones from the United States as a possible money-saving alternative to either Talarion or a second local option which is being developed in France. France’s Thales and Dassault are pushing an alternative to Talarion based on an Israeli platform, arguing this is more cost effective and more reliable to produce.

EADS argues it has the only genuinely European product, building up technology that would ultimately go into the next generation of fighters, which could well be unmanned. “Once we are out of the technology we won’t recover. We have to find ways to sustain this industry,” Zoller said.

Germany announced sharp cuts in defence spending last week.

Industry analysts say Talarion may also have been delayed by worsening relations between EADS and Germany over a series of delays including helicopters and the Airbus A400M. Germany’s defence minister Karl-Theodor zu Guttenberg delivered a public snub to EADS by boycotting the Berlin air show last week.

EADS was created from a merger of French, German and Spanish interests a decade ago to compete with US defence giants. Zoller said the main priority for the EADS defence and security business lay in internally managed growth but he was open to acquisitions wherever these could “amplify” growth. He identified India, Middle East and Brazil as the top three priority areas in emerging markets. EADS has also said it plans to expand in defence services in the United States.