NEWPORT, Wales - EADS brandished the cost stick in threatening to halt Eurofighter Typhoon production if the four launch customers fail to commit to buying a third installment of the combat aircraft by the first quarter.
The Eurofighter industrial consortium needed to know government clients' intentions on tranche three "by the end of the first quarter;" otherwise, the assembly line will be suspended, Stefan Zoller, EADS defense and security CEO, said Jan. 13 on the sidelines of the company's New Year's press conference here.
Zoller added that EADS is in talks with the customers over development of a next-generation radar for the Eurofighter Typhoon, which would boost the combat jet's chances in India's international tender for 126 fighter aircraft.
A production halt would be costly, and EADS would "charge the nations," Zoller said. EADS halted production for about six months while governments hesitated between the tranche one and two orders, he said.
EADS last year submitted a range of procurement options to the Eurofighter launch customers - Britain, Germany, Italy and Spain - intended to offer flexibility in national orders. Zoller said on the eve of the Farnborough Airshow last summer that official commitments on the third and final tranche were already late.
One procurement option would split the tranche into two smaller orders.
Britain, which is on the hook for 88 Typhoons under tranche three, faces severe budgetary problems, and Defense Secretary John Hutton announced Dec. 11 an interim package of program delays and cuts until the Ministry of Defence completed a planning round in March. The Eurofighter program is subject to that planning review.
Germany holds national elections in September, which complicates the procurement process.
A market analyst said the main concern was the electronics development work needed to bring the aircraft up to full specification under tranche three, even before production begins.
Eurofighter charged its customers for the production halt between tranches one and two, which added to overall program cost, the analyst said.
The Army's Future Combat Systems (FCS) program is ready to test a few components that soldiers may have in their hands by 2010.
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