Naval Group vows to reduce billions of dollars on suspended water deals

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The French contractor, who has defended himself against any tensions over negotiations on the new “Aukus” in the Indo-Pacific, has promised to repay tens of millions of dollars from Australia on a $ 90bn (US $ 65.4bn) water deal.

“We will protect our rights and all that we have done. . . any costs we incur and any costs associated with dismissal, “Pierre-Eric Pommellet, chief executive of Naval Group, told the Financial Times.

French officials and officials say this in writing removal to order a submarine. 12, 12 to meet the cost of lowering the main work and construction to build ships in Adelaide.

Pommellet said Naval Group, in which the French government has a large share and Thales is 35%, had already been paid $ 840 million before the project. When the prices of other contractors such as Lockheed Martin, a former naval producer, were considered, the Australian government must have doubled the cost of doing nothing.

Australia must also pay tribute to French lawsuits. Although Pommellet declined to say whether the agreement included the components, the Australian ABC network had previously stated that it had acquired a portion of the partnership agreement signed in February 2019 indicating that Australia would have been at fault For the “90” of the “break break” if they want to cancel when the Naval Group has already offered its design, it is rising to € 250m for a detailed design – which has not been offered.

Despite all its funding being met, Naval Group faced a major challenge due to the dismissal of a major project. It represents 10% of revenue, or about € 500m a year as the average for years to come, says Pommellet. “Reducing 10% interest rate is huge.”

Meanwhile, Thales Group, which had a joint venture to fund US security company Lockheed Martin water program and its share in the Naval Group, has criticized the terms of the suspended agreement, he said. not hitting its 2021 goals.

Although they had saved only € 30m for the program, Thales stood firm to secure € 1bn from a deal in the coming years, according to some experts. And a broken agreement could have a significant impact on their relationship with the Australian government, which has become a key market for the company in recent years, some researchers said.

For Naval Group, a lucrative, high-level partnership that was not just a job but a “corporate transformation” and a “transformation of France”, suddenly became a “major problem” that the company had to overcome on its own through growth elsewhere and with other customers, “Pommellet said. .

Pierre-Eric Pommellet: ‘We will defend our rights and all that we have done. . . any costs we incur and any costs associated with the discount ‘© Fred Tanneau / AFP / Getty

Australian Prime Minister Scott Morrison kept the Aukus secret from a small group of trusted advisers so much so that Pommellet confirmed that none of his spokespersons for French talks earlier this year knew what was about to happen.

In fact, Naval Group received a letter from the Australian government on September 15 confirming that everything is in line with the next phase. Mr Pommellet said he heard colleagues in Paris celebrating the news at a nearby office when he phoned and explained that the deal had been canceled. “Just imagine coming in and telling your team, ‘I have something to tell you’… It’s hard.”

In addition to doubting the future of the 1,000 French workers in France and Australia, their dismissal also affected 80 Australian families who had moved to one of the Naval Group locations in France. “Cherbourg has made it a world school. . . They hear these stories the same day as we do, and therefore, to them, every day – nothing to do. ”

After ousting the Naval Group’s work and frustrating France in pursuing their Indo-Pacific ambitions, Australia now has years of negotiations to find more expensive and difficult to build ships, not to mention nuclear weapons.

French officials have been outraged by the ambiguity of the Aukus plan, which one says is “the only framework for vocational training” and Pommellet in the past as no more than a “word”.

“We don’t know what it is,” he told FT. “It’s very secretive. But for us, the Aukus alliance is an alliance that ends, 1,000 job-seekers, 80 remaining Australian families, and a train station where there were hundreds of people just standing in the middle of Adelaide. ”

Additional reports of Anthony Klan in Sydney.

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