Germany walks away from Lockheed, Boeing cargo helicopter offers

COLOGNE, Germany — The German Defence Ministry wants to start fresh on a new heavy transport helicopter after finding that offers from American firms Boeing and Lockheed Martin for the Chinook and the King Stallion, respectively, were too expensive, officials announced Tuesday.

The surprise decision halts an acquisition race that was scheduled to a see a contract awarded in 2021. The two companies delivered their initial proposals for the program, aimed at replacing Germany’s aging CH-53G helicopters, in January 2020. A request for a second proposal was expected by the end of this year.

The move comes as the budget implications of the coronavirus crisis are starting to materialize, despite leaders’ pledges to keep military spending high. Given that context, other programs are also expected to be on shaky ground, according to sources in Berlin.

Switzerland’s $6.5 billion fighter jet plan narrowly passes referendum

Officials canceled the helicopter race — locally known as Schwerer Transporthubschrauber, or STH — because the government deemed offers by the defense giants as “uneconomical,” a Defence Ministry statement read. The chance of meeting all requirements while adhering to the envisioned multibillion-dollar budget would be “unlikely,” officials wrote.

The STH program was initially planned to be a poster child for a no-frills, off-the-shelf purchase that’s easy on the defense budget. But acquisition officials kept piling on requirements to such a degree that it surprised some industry executivesassociated with the bidders, Defense News reported earlier this year. Also included in the government’s requirements was a decades-long maintenance scheme under which contractors had to guarantee certain availability rates.

Tobias Lindner, the Green Party’s point man in the Bundestag for defense issues, called the helicopter program’s a “bitter sign” for Germany’s soldiers. He argued the Defence Ministry had been naive in its approach to the much-needed acquisition. “A new competition alone won’t solve that problem,” he said.

About The Wall Street Analyzer 1208 Articles
The Wall Street Analyzer's staff of writers, analysts, publishers, producers, market researchers, and PR professionals aim to provide investors with the tools they need to make informed decisions on buying stock. Our staff is a mix of financial professionals and media savvy individuals whose experiences bring the best talent from both ends of the spectrum.