What's German For "To The Mattresses"?
Accused of mounting a "misinformation campaign" by Dr. Bruno M.
Kuebler, the director overseeing insolvency proceedings at Thielert
Aircraft Engines, on Wednesday Diamond Aircraft came back
swinging... saying statements Kuebler made at a press conference
during this week's Berlin Air Show were, frankly, ridiculous.
As ANN reported, Diamond was
initially optimistic an amicable solution would be reached in
securing needed engines and spare parts from the foundering
enginemaker, following Thielert's April 24 insolvency filing. In a
customer letter sent this month, however, Diamond's tone shifted...
and the company pinned the blame squarely on Kuebler, whom Diamond
accused of acting against not only its best interests, but also
This week at ILA 2008, Kuebler took up the gauntlet -- stating
Diamond is conducting a "misinformation campaign" to make customers
of its DA40 tdi and DA42 feel "massively insecure." Furthermore,
Kuebler said Diamond isn't being entirely truthful in telling
customers it tried to secure available engines at fair prices, but
was turned down when Kuebler refused to play ball.
"In actual fact,
Diamond offered to buy a large quantity of engines and spare parts
-- but at a price considerably lower than the price that would be
charged to end customers," Kuebler said. "That’s how Diamond
tried to negotiate special conditions."
Representatives with the London, Ontario planemaker immediately
responded to Kuebler's comments. "Diamond has distributed
information to its customers that accurately describe the current
situation," they said. "The single information letter that
describes the current situation hardly constitutes a 'campaign'.
The interests of Diamond and its customers are the same; those of
the insolvency administrator and TAE are not.
"Diamond has no possible motive to make its customers feel
'massively insecure'," Diamond added. The planemaker notes the
facts speak for themselves in that regard: over 50 TAE-powered
Diamond planes are currently AOG (aircraft-on-ground) due to lack
of support and parts from Thielert, and 60 percent of Diamond's
annual production is stopped due to lack of available engines.
The planemaker also refuted Kuebler's claims that Diamond
attempted to negotiate cut-rate prices on engines and parts,
"considerably lower than the price that would be charged to end
customers. That's how Diamond tried to negotiate special
Kuebler adds Thielert made a counteroffer to Diamond on May 13,
"in which ninety percent of the required spare parts available
would be delivered to Diamond. Now that more than one week has
passed, we will release the parts for the market."
"This statement is intentionally misleading in that our offer
was made prior to publishing of the latest TAE price list and in
that there was never any negotiation of more favorable terms after
the price list was published," Diamond responds. "Dr. Kuebler knows
better, since he personally conducted the meeting with senior
Diamond management when our offer to purchase all available parts
and engines was made."
Thielert has since resumed delivery of spare parts and engines
to its customers, and the company is even seeking new orders to
raise badly-needed capital. "However, in accordance with German
insolvency law we are forced to demand payment in advance," Kuebler
added. "The same provision applies also to maintenance work. At the
present these measures are indispensable for maintaining the
company’s business operations."
Diamond says Thielert -- and Kuebler -- are being disingenuous
in trying to attract new business. "We can’t speculate on the
motives, but we question how one would reasonably expect to attract
either significant orders or investors with a now financially
non-viable product and a policy of bleeding a captive customer
base," Diamond said. "This is not fear-mongering -- it is the
current factual situation and Diamond is pursuing all possible
avenues to provide relief to its customers. As these bear fruit, we
will be communicating news to our customers. We attempted
constructive cooperation with Kuebler, making explicit sensible
offers that would have cost Diamond significant amounts of money
and would have not required cash infusion on the part of TAE;
however, these offers were bluntly rejected.
"We remain committed to finding the best solution for our
customers and we would far prefer constructive cooperation with
TAE/Kuebler vs non productive public exchanges."
In the meantime, Diamond is also working closely with Austro
Engines (AEG), which is developing its own heavy fuel/diesel
engine. That engine has already flown on the DA40, the DA42, and a
DA50 prototype, and EASA certification is expected later this
summer. Diamond expects to make the engine retrofittable to
Thielert-powered aircraft in the future.