EADS Reportedly Cancels Acquisition of U.S. Defense Contractor

Louis Gallois, EADS CEO, speaking at the traditional French New Year's Address said that the company ended plans to buy a U.S. defense contractor to preserve cash. The company was not identified Business Week reported but Gallois said it had recently won a large contract from the Pentagon. EADS like many other companies is facing issues with getting credit and must retain cash to bridge that gap. The company is also being required to support some of their suppliers due to the general downturn in the world economy. Continued delays in the A400M military transport program are also affecting the company. Reuters reports that EADS shares fell as further delays to this program were announced. The initial flight of the aircraft was supposed to take place last year and still hasn't with series production and delivery three or more years away for a variety of European customers.