Airbus: Will the EU’s Champion Go Airbust?

From the desk of Elaib Harvey on Sat, 2007-02-17 09:01

I understand that this week there was a general board meeting of Airbus Industries. At that meeting the executives were presented with a plan to save the troubled European National Champion. These plans, called Power8, should be made public on Tuesday next week. I also understand they won’t be.

Airbus needs to save over 1 billion Euro a year.

The plan was, I was told, to lay off all contract staff, which would mean thousands of job losses across the EU, in particular in France, Germany, Spain and the UK. Of course if this was a business in the normal fashion the executives would have hummed and haahed about the severity of the measure, then looked at the hatchet face of the CFO, gritted their teeth and accepted this as the only way to save the company.

But Airbus is not a normal industry. It is industrio-political. It is the EU’s champion in the great joust with the US and Boeing.

So the suggestion was taken off the table. Essentially the four Governments had made it clear that they wouldn’t complete any orders with Airbus if their own contract workers were sacked.

Economics Minister Glos said before the talks that he wanted to ensure that Germany was not hit disproportionately by any job cuts, and repeated his warning that German defence orders for Airbus parent company EADS could be cancelled.

Now what? Well as far as I can gather the Board is in a tight spot. It knows that they have to do this, but politically they cannot. The upshot is probably that they will just slowly sink into the sand.
 
The other possibility is that we will witness a round of governmental chicken, with the first to blink to see redundancies. Any betting that Bristol is doomed?

Lifson

Submitted by Bob Doney on Tue, 2007-02-27 13:25.

Another very good article with a lot of interesting themes. Thanks.

Airbus

Submitted by dll2000 on Thu, 2007-02-22 16:53.

Here is the another article on the subject:

http://www.americanthinker.com/2007/02/the_selfhumiliation_of_airbus.html

... American partisans of Boeing should take no comfort, though. The world desperately needs viable competition in this business. ...

In the end, bureaucrats and governments being what they are, nobody is likely to want to see Airbus fail, and so French and German taxpayers are likely to be on the hook for even more billions of dollars. And American trade lawyers will be likely to stay busier than a Boeing factory launching trade complaints against European subsidies.

Those are logical conclusions.



@ Peter Vanderheyden

Submitted by USAntigoon on Thu, 2007-02-22 12:13.

Airbus has more problems then "just not being on schedule".. I strongly suggest you do read some more about EADS and its political influences..(Don't rely too much on your "media", I hope you know that "resource" is limited.....)

To remove that political influence, the EADS structure needs to be scrapped and overhauled.. But this will NOT happen soon.   

The  Power8 restructuring plan is on HOLD whilst they all are playing a big chess game on the backs of Germany, UK and Spain....
The sourcing plan for the new A350XWB will give France a big opportunity to solidify their grip hence lots of jobs will be lost in the UK and Germany. The new  A350XWB will enter the market too late and the money makers A320/330 will become obsolete..  Now Russia has entered the equation as France loves to expand in some "military" alliances with Vladimir Putin.
This "politicaL/commercial control will undoubtedly has its effects.

 

It seems that your same "fussy" view about the car industry also needs some "education" ... Sure there is a big issue/crisis within the USA car industry, but this has more to do with supply, demand and out of control unions demands then anything else. Rest assured the answer is NOT to import expensive EU cars...Health care reform (about $ 1,500.00 per car which is more then the cost of steel) are one of the key cost burdens which need to be tackled...

Enjoy..

"Any betting that Bristol is

Submitted by Amsterdamsky on Thu, 2007-02-22 09:45.

"Any betting that Bristol is doomed?"

 

Seeing that the UK is the only place Scarebus is operating where you can actually lay off employeed I suspect this is correct.  Airbus is going to crater so badly it will reverberate throughout the european economy.  Of course this will prompt lefty polits to call for greater state involvement and more protectionism.  CO2 tax on Boeing maybe?

on schedule

Submitted by peter vanderheyden on Thu, 2007-02-22 11:00.

"Airbus is going to crater so badly it will reverberate throughout the European economy."
The EU is not Malawi. It can have some job cutting without "reverberation" trough its entire economy. Yes Airbus has problems. They're not on schedule. But that’s indefinitely less worse then the biggest car manufacturer that seems to produce cars nobody wants, and is obliged to import from its European daughters.

Lifson

Submitted by Bob Doney on Tue, 2007-02-20 19:48.

Thanks for the link. Interesting articles.

Why do I get this nagging feeling that it won't only be German and French taxpayers picking up this tab?