Dutch Court Rules for Aerospace Giant Airbus in Battle Over Rocket Parts

An ArianeGroup facility in Les Mureaux, France, hosts the largest friction stir welding machines in Europe for producing cryogenic tanks for the Ariane 6 rocket’s core stage. (Photo via European Space Agency/ArianeGroup)

ALMELO, Netherlands (CN) – Airbus, the world’s second largest aerospace and defense company, will finally be moving the parts needed for its Ariane 6 rocket to its manufacturing facility after winning a contract dispute with one of its suppliers.

The Ariane rocket family is a group of launch devices used to take satellites and other objects, including spacecrafts, into space. The Ariane 6 is the latest model and was commissioned by the European Space Agency in 2012.

ESA accepted a joint proposal from Airbus and French rocket manufacturer, Safran, for which the two companies formed Airbus Safran Launchers, later called the ArianeGroup.

One of the aerospace giant’s subsidiaries, Airbus Defense and Space, was contracted to be the major parts supplier for the Ariane 6. In turn, Airbus Defense and Space subcontracted some of the rocket component production to the Dutch company Spacetec BV.

The Ariane 6 project uses a top-down pricing model, which requires suppliers to agree to maximum prices for projects. The ArianeGroup agreement included strict price controls and deadlines for the completion of components. Failure to meet them could result in substantial fines for Airbus. In turn, Airbus required the same of its suppliers.

Spacetec outsourced the manufacturing of some of the components to its sister company, PM Aerotec. Both companies are owned by the same holding group, PM. In this agreement, however, Spacetec didn’t require the same strict controls.

PM Aerotec had cost overruns in the project and demanded 1.2 million extra euros, more than double the original agreed price.

In turn, Spacetec demanded that Airbus pay the extra costs. When it refused, citing the terms of the contract, Spacetec refused to handover completed parts.

Concerned about the components, Airbus had them seized and stored at the Nederlands Taxatie en Adviesbureau, an independent appraisal agency. Airbus also canceled its contract with Spacetec and the dispute went to court.

A court in Almelo, a town in the eastern part of the Netherlands, heard arguments in the case on June 18. In its filing, Airbus claimed Joep Henk Lüth, the CEO of the holding group PM, is known for his “emotional and unpredictable way of doing business” and described the case as “pure blackmail.”

Airbus also claimed it was unaware that Spacetec’s manufacturing had been subcontracted.

The court ruled in favor of Airbus on Wednesday, finding that the “contract between Airbus and Spacetec is clear in terms of ownership and right of retention.”

Spacetec was ordered handover any remaining parts and pay Airbus’ legal fees.

In response to the ruling, Airbus said in a statement, “For decades, Airbus Defence and Space Netherlands has been working with thousands of partners and suppliers for the development of high-tech space products, also with good results for the production of the engine frames for the new European Ariane 6 launcher.”

Airbus also said the production of the Ariane 6 launcher was on schedule.

Spacetec and PM did not respond Wednesday to requests for comment.

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