Airbus says Poland misled it for months over botched deal

By MONIKA SCISLOWSKA

Associated Press

WARSAW, Poland — A dispute between Poland and a France-based helicopter producer over a scrapped multibillion-euro deal broke into the open Tuesday, with the company saying it had been misled for months over the agreement.

Poland’s conservative government unexpectedly ended negotiations with Airbus Helicopters last week over a $3.5 billion deal to purchase some 50 Caracal helicopters, saying it was against the nation’s economic and security interests.

Instead, Poland will buy Black Hawk helicopters made at a plant in Poland by U.S. company Sikorsky, part of the Lockheed Martin group. The motivation seemed to be to support the jobs at the local plant.

“Foreign investments in Poland should be modern, long-term and should guarantee good prospects of employment for Polish workers,” Prime Minister Beata Szydlo said Tuesday. “The conditions of cooperation should be beneficial to both sides.”

The decision to pull the plug on the deal, which had been in the works since Airbus won a tender under a previous Polish government last year, raised questions over Poland’s reliability in negotiating deals. It also strained ties with France, which partly owns parent company Airbus Group.

President Francois Hollande put off a visit to Warsaw planned on Thursday, allegedly to show his discontent. Poland’s opposition politicians were saying that the one-year-old government was alienating one of the few allies it had in Europe, and called for an investigation of the decision.

Airbus Group CEO Tom Enders said his company had negotiated in good faith and been “misled for months” by Poland whereas Airbus wanted to invest in the country “big time.”

“Never have we been treated by any government customer the way this government has treated us,” Enders said in a statement. He said the negotiations “created the impression of unprecedented confusion.”

His company will seek “remedies,” he added, without providing further details.

Airbus Helicopters also wrote an open letter to Szydlo, saying its offer had met all requirements, would have created some 6,000 new jobs in Poland, and developed a state-owned servicing plant in Lodz, in central Poland.

The issue the sides disagreed over was an offset agreement that was supposed to see France invest in the Polish defense industry on a level comparable to the value of the main deal. Poland made that a key condition.

Deputy Development Minister Radoslaw Domagalski-Labedzki said the negotiations were terminated because Poland realized its expectations would not be met and there was no chance for compromise. He said Airbus was long aware of Poland’s reservations.

Defense Minister Antoni Macierewicz also said that the Airbus deal would have allowed the company to take over the plant in Lodz, something the government was against.

The ruling right-wing Law and Justice party won elections last year largely on promises to put Poland’s local interests above those of the wider European Union.