Airbus Says Jobs At Risk If A400M Fails

European governments must weigh carefully whether they are ready to put the A400M military plane project and tens of thousands of jobs at risk over budget cuts, the head of Airbus told a Spanish newspaper.

Britain and Germany have threatened to withdraw from the EUR20 billion euro (USD$26.4 billion) military transporter project due to production problems, but Airbus CEO Tom Enders said governments had to look beyond delivery delays to focus on investment and jobs.

"Are budget restrictions going to put at risk the program, which still needs investment?" Enders told Spanish newspaper ABC in an interview published Thursday.

"It means asking if Europe is prepared to not go ahead with the A400M and what alternatives there are."

Enders said 40,000 jobs in Europe were directly linked to the A400M project, including 15,000 in Spain.

"You can't just look at the plane as a product," he said.

Britain, Germany and five other countries involved in the project have agreed to put its fate on hold while they decide whether to back a new contract with Airbus parent EADS.

Defense companies globally have stepped up efforts to draw attention to high-tech employment in their sector, as they try to tame speculation of further defense cuts to pay for massive government bail-outs to the financial and car sectors.

Airbus is also locked in a battle over blame for A400M delays with a consortium of engine makers, saying vital control software for its large turbo-prop engines is not yet ready. Engine makers say they have delivered test engines on time.

The aircraft's maiden flight, originally due in January last year, has been postponed indefinitely. EADS says it will be able to deliver the first A400M three years after the plane first takes off from its assembly site in southern Spain.

First deliveries had previously been due in 2009.

In Paris, the head of one of the engine makers in the consortium, France's Safran, said engine tests on board a converted Hercules C-130 transporter were going smoothly.

"They have done about 10 hours of tests on the (C-130) flying testbed. It's going well and no negative elements have been reported on the behavior of the engine," CEO Jean-Paul Herteman said.

The wing-mounted engine tests carried out in Britain follow some 2,500 hours of grounds tests.

The first airborne test of an A400M engine, fitted in place of the one of the C-130's normal ones, took place in December but since then most test information has been kept under wraps.

Herteman said several more flights were needed to complete the tests, but said he could not predict when this would be.

One of the next key steps is to have the FADEC control software, which is blamed by Airbus for derailing the massive defense project, approved by civil certification authorities to pave the way for test flights using the A400M itself.

That should happen in June, Herteman said.

Enders predicted earlier this year that the A400M could make its first flight in the second half of 2009.

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