Airbus criticises Poland for cancelling helicopter deal

Poland had been testing the Caracal helicopter with a view to replacing its Soviet-era equipment

The head of Airbus has criticised Poland for cancelling a planned $3.5bn military helicopter contract.

The Polish government abandoned plans to buy 50 French-designed Caracal helicopters last week.

It spurred a diplomatic row, with French President Francois Hollande calling off a visit to Warsaw and threatening to review other defence cooperation.

Now Airbus chief executive Tom Enders has attacked the decision.

He said the company had been "misled for months" and would be seeking compensation.

The European aerospace giant won a tender to supply the Polish armed forces with helicopters in April 2015.

The two sides began to negotiate the detail of a so-called offset contract, under which Poland would buy 50 helicopters, and in return, Airbus would set up manufacturing facilities in Poland.

Soured relations

Such deals, in which a contractor provides incentives to a country buying its products, are relatively common in the aerospace and defence industries.

However, relations have soured since the election of a right-wing government under Beata Szydlo in October last year.

Last week, Poland called off talks, claiming that the proposed contract was not in the country's economic and security interests.

The reaction from France, where Airbus Helicopters has its headquarters, and where the Caracal has been designed and developed, was swift. President Hollande had been due to visit Warsaw for talks this week, but his visit has been cancelled.

Satisfactory offer

A separate visit by the French defence minister, Jean-Yves Le Drian, was also called off.

Poland blamed Airbus for the breakdown in negotiations, suggesting it failed to offer adequate incentives in exchange for the contract.

Defence minister Antoni Macierewicz told reporters at the time: "Airbus Helicopters did not make a satisfactory offer in the last phase of talks. They didn't respond to the Polish position and this is why negotiations on the contract stopped."

However, in an open letter to the Polish prime minister published on Tuesday, Airbus rejected that claim.

The company insists that its investment offer "would have generated more value in Poland than the revenues that would have been generated for Airbus Helicopters through the helicopter supply contract".

'Slammed the door'

It says it offered to build a full assembly line in the city of Lodz, mirroring the capabilities of its existing plant at Marignane, in southern France. The facility would have been 90% owned by the Polish government. There would also have been a parts factory.

Airbus believes the project would have led to the creation of 3,800 jobs.

According to Mr Enders, Airbus "wanted to invest in Poland big time", but the Polish government had "slammed the door on us".

"We have an impression that we have been misled for months by the current Polish government," he said.

"We spent a huge amount of efforts and money in recent years trusting that we were in a fair and professionally-conducted competition. We will of course seek remedies."