Aerospace |
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It was up to the German government to decide whether or not to provide funding for the Eurofighter project. Last Friday, the German cabinet approved $485 million (850 million marks) in Eurofighter spending for 1998. And, according to the cabinet, an estimated $500 million more will be added to the funding over the next three years. Although the cabinet approved funding, the fight for the Eurofighter hasn't ended yet. Before anything becomes official, the cabinet's decision must be adopted by the German Parliament by this fall. And, according to reports, no one will be celebrating anything until "the moment the ink is dried on the contract'' between DASA and the government, which would follow the Parliament vote. Once fall comes, a lot of things will come into play. Daimler Benz's aerospace arm, DASA, will gain a lot from contracts and defense subsidie and analysts have concluded that it would undoubtedly do DASA's stock a lot of good as well. But questions have been raised about the necessity the twin-engined jet has in this age of military budget cutting. The Eurofighter is a plane which was initially intended to counter Soviet threat in the 1980s. And these days, the market for such fighters is limited. Critics say it faces a hard stance in the marketplace when placed against French, Swedish and American jets. Yet, the twin-engined fighter was designed for both ground attacks and air-to-air combat and the young fighter is attracting private-sector contractors from Germany, Britain, Italy and Spain -- in hopes of replacing their aged fighters. In fact, last Wednesday, Britain's intention to purchase 232 Eurofighter aircraft was reaffirmed. And with the recent news of GEC linking with Finmeccanica, it has been speculated that its defense division -- Alenia -- could also be a prime contractor in the four-nation Eurofighter project. Rather than be a supplier to Eurofighter, GEC could become a prime contractor, where the biggest value lies. The unit cost per plane is estimated at about DM 125 million. DASA plans to build the fuselage of 620 planes and oversee the assembly of 180 jet fighters. It should be noted that it is not of the intention of the German government to take advantage of an offer by DASA for early repayment of DM 1 billion in subsidies to the Airbus program in order to facilitate the Eurofighter financing. DASA intends to start repaying as early as 2000 or 2001. |
