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A380 Production Could Be Moved Outside Europe!  
User currently offlineHalibut From , joined Dec 1969, posts, RR:
Posted (8 years 1 week 4 days 13 hours ago) and read 12193 times:

http://business.guardian.co.uk/story/0,,1877182,00.html

Airbus superjumbo faces even longer delays

· Plane now two years behind schedule
· Production could be moved outside Europe


David Gow in Brussels
Thursday September 21, 2006
The Guardian


EADS, majority owner of Airbus, is planning a radical costcutting at the European planemaker to offset the strong euro, replenish its earnings and restore investor confidence which has been battered by fresh delays to the A380 superjumbo.
The plans are being drawn up by Christian Streiff, the new Airbus chief executive, for an EADS board meeting on September 29 and could see cost cuts of at least €2bn (£1.35bn) a year, including job losses and eventually moving production to plants outside Europe


82 replies: All unread, showing first 25:
 
User currently offlineHalibut From , joined Dec 1969, posts, RR:
Reply 1, posted (8 years 1 week 4 days 13 hours ago) and read 12193 times:

Quoting Halibut (Thread starter):
Production could be moved outside Europe

The question is where ???

Hhmm scratchchin 

Halibut


User currently offlineSK909 From Denmark, joined Nov 2005, 261 posts, RR: 0
Reply 2, posted (8 years 1 week 4 days 13 hours ago) and read 12140 times:

Quoting Halibut (Reply 1):
The question is where ???

There is no question... I think it's just statement.
But hey, it just adds to the joke...



Life's for Living!
User currently offlineFuturecaptain From , joined Dec 1969, posts, RR:
Reply 3, posted (8 years 1 week 4 days 13 hours ago) and read 12140 times:

Another Airbus plant in China rumor?

User currently offlineNAV20 From Australia, joined Nov 2003, 9909 posts, RR: 36
Reply 4, posted (8 years 1 week 4 days 12 hours ago) and read 12051 times:

This is the first time we've heard job losses mentioned:-

The plans are being drawn up by Christian Streiff, the new Airbus chief executive, for an EADS board meeting on September 29 and could see cost cuts of at least €2bn (£1.35bn) a year, including job losses and eventually moving production to plants outside Europe."

And yet another profit warning is foreshadowed:-

"It comes as Airbus is hit by a further delay of up to six months in deliveries of the A380 planes, putting them two years behind schedule. The delay is likely to trigger a further profits warning from the EADS board next week."

I bet Putin, Chirac, and Merkel have a really joyous meeting in Paris tomorrow!  Smile



"Once you have flown, you will walk the earth with your eyes turned skywards.." - Leonardo da Vinci
User currently offlineCentrair From Japan, joined Jan 2005, 3598 posts, RR: 20
Reply 5, posted (8 years 1 week 4 days 12 hours ago) and read 12051 times:

Though moving a small business to another country to cut costs can work. I think moving the A380 which already has heavy investment and facilities outside Europe would cost more than keeping it in Euorpe and cause more delays. I mean...they aren't making shoes.

Build new hangers for construction of A380 in another location...$€$€$€
Train local workers in the construction of the A380 $€$€$€
Bring in engineers (and their families) already on the A380 to the new location so they can maintain quality control $€$€$€
Moving the parts already built in Europe over land or sea to the new facilties $€$€$€

I say cut costs locally and find a more efficient and economical way to operate and build the plane.

Where would they move it? I think there are only a few options. Russia, China or the US. All have enough workers already in aviation that could handle it. China is too far for many of the larger parts constructed in Europe and would require more training of new staff. The US...well right...again transport of items and a higher standard of living which is $€$€$€. That leaves Russia. There are many out of work engineers, people with aviation experience who can work at a lower scale, and would allow easier transport of items.

The previous was opinion and not based on much but observations from A.net and other places.



Yes...I am not a KIX fan. Let's Japanese Aviation!
User currently offlineStirling From Italy, joined Jun 2004, 3943 posts, RR: 21
Reply 6, posted (8 years 1 week 4 days 12 hours ago) and read 12029 times:

Is not Russia considered a part of Europe?

My guess is the obvious no-brainer of China. Maybe even India, or Indonesia, Canada, South Africa, Malaysia, and Korea.

I can't imagine there would be any economies of scale in the U.S., depends on how weak the dollar becomes, then wages and everything else become mott.



Delete this User
User currently offlineMCIGuy From United States of America, joined Mar 2006, 1936 posts, RR: 0
Reply 7, posted (8 years 1 week 4 days 12 hours ago) and read 11985 times:

Quote:
Is not Russia considered a part of Europe?

Technically, Asia, but a lot of the former Soviet states are considered Europe.

[Edited 2006-09-21 04:59:58]


Airliners.net Moderator Team
User currently offlineTeamAmerica From United States of America, joined Sep 2006, 1761 posts, RR: 23
Reply 8, posted (8 years 1 week 4 days 12 hours ago) and read 11932 times:

And of course the joke is that the article says nothing about moving production of the A380 outside of Europe. The plan to open an A320 plant in China is old news...here's just one example: http://www.businessweek.com/magazine/content/06_17/b3981058.htm

Halibut, you're a fisherman! Bound to wind up immersed in brine...with a hint of dill...  Smile



Failure is not an option; it's an outcome.
User currently offline707lvr From United States of America, joined Jun 2004, 585 posts, RR: 2
Reply 9, posted (8 years 1 week 4 days 12 hours ago) and read 11902 times:

I'm wondering if this ridiculous story caused such an uproar that it busted every one of The Guardian's servers.

User currently offlineLTBEWR From United States of America, joined Jan 2004, 13120 posts, RR: 12
Reply 10, posted (8 years 1 week 4 days 11 hours ago) and read 11883 times:

To even consider moving any part of final or major component A-380 production out of the EC won't happen. To me this is a ploy to get more Euros out of the EC countries to help them subsidise production costs or to get looser labor laws specific to them.
Perhaps they could do like Boeing has done with the 787 and to have partners make major components in other countres (Austraila, Japan) Those potential countries could include Japan, PRC, Taiwan, Russia, Eastern Euro countres like Poland, Brazil, USA or Canada. I am quite sure Airbus could get subsidies/incentives from andy of those governemnts as well as investors and companies that already make aircraft components in those countries.


User currently offlineWjcandee From United States of America, joined Jun 2000, 5194 posts, RR: 22
Reply 11, posted (8 years 1 week 4 days 11 hours ago) and read 11883 times:

I thought that one purpose of Airbus receiving "launch aid" and such was to generate jobs within the socialist economies of its owning states. Guess not.

User currently offlineJustloveplanes From United States of America, joined Jul 2004, 1060 posts, RR: 1
Reply 12, posted (8 years 1 week 4 days 11 hours ago) and read 11830 times:

Launch aid may not be forthcoming for the A350XWB and hence the reference to the overseas outsourcing. If this is the case, A may HAVE to take a B787 like approach to spread the capital requirments and lower costs. In light of this, I am expecting another year added to the A350XWB launch to deal with setting up this new supply chain. I think pre Streiff A would say 6 months, but not now. I think we will be looking at another year. I think A will get a big chunk of the US tanker deal, but there will be no launch aid as a condition (not made public of course). My dos centavos.

JLP


User currently offlineStitch From United States of America, joined Jul 2005, 31057 posts, RR: 87
Reply 13, posted (8 years 1 week 4 days 11 hours ago) and read 11830 times:
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I can't see A380 production moving outside of TLS. The logistics make it fiscally...foolhardy.

It's possible Airbus could assemble the A350 outside of TLS, but I find that also unlikely since the closure of the A300/A310 line should provide sufficient space to create an A350 assembly line.


User currently offlineNAV20 From Australia, joined Nov 2003, 9909 posts, RR: 36
Reply 14, posted (8 years 1 week 4 days 11 hours ago) and read 11830 times:

With respect, Halibut, I think you maybe headlined the wrong point in the story.

"........could see cost cuts of at least €2bn (£1.35bn) a year, including job losses and [b]eventually moving production to plants outside Europe."

As several people have pointed out, moving production is a very expensive and time-consuming process. So it's a case of job losses now, moving production 'eventually.'

I would expect that the sub-plot. though, is "...job losses now, involving massive problems with the unions and European voters, just before the French elections - UNLESS the EU bails Airbus out with a huge wad of Euros...."

[Edited 2006-09-21 05:46:13]


"Once you have flown, you will walk the earth with your eyes turned skywards.." - Leonardo da Vinci
User currently offlinePtugarin From United States of America, joined Sep 2006, 326 posts, RR: 0
Reply 15, posted (8 years 1 week 4 days 11 hours ago) and read 11830 times:

This idea may sound crazy, but moving parts of A380 production to Russia would make a lot of sense for various reasons.

1) Russia already has aircraft industry infrastructure.
2) Labor is cheaper than in Western Europe
3) Russian government wants to cooperate with EADS on various space projects. In fact, there are some rumors in
Aeroflot May Split Plane Order Between Boeing, Air (by NYC777 Sep 12 2006 in Civil Aviation) that state that Russian government is pressuring SU to favor airbus.

Any thoughts?


User currently offlineKen777 From United States of America, joined Mar 2004, 8296 posts, RR: 8
Reply 16, posted (8 years 1 week 4 days 11 hours ago) and read 11754 times:

Looks to me like another rumor before the announcements to reduce reactions to the actual announcements.

I would be surprised if Airbus is not looking at the 787 approach to development & production of the 350. If it's profitable for Boeing why wouldn't they give it a very close look. If the competitive environment supports it then I think Airbus will maximize their earnings - not EU jobs.

The question now is the potential for more pre-announcement leaks and more rumors.


User currently offlineWingedMigrator From United States of America, joined Oct 2005, 2214 posts, RR: 56
Reply 17, posted (8 years 1 week 4 days 11 hours ago) and read 11703 times:

Quoting Halibut (Reply 1):
The question is where ???

Ah, yes, another classic Halibutian tactic, replying to yourself.

Your question is answered in the article:

Quote:

Under Mr Streiff's plans, work that is currently shared between the main Airbus plants in Toulouse and Hamburg would be given to just one.

There you have it! Prepare for the A380 to be built entirely in Toulouse. I would imagine this would entail giving Hamburg some sort of consolation prize, like the A350 line.


User currently offlineN1786b From United States of America, joined Sep 2005, 560 posts, RR: 17
Reply 18, posted (8 years 1 week 4 days 11 hours ago) and read 11654 times:

Quoting WingedMigrator (Reply 18):
There you have it! Prepare for the A380 to be built entirely in Toulouse. I would imagine this would entail giving Hamburg some sort of consolation prize, like the A350 line.

Or simply the A320 line.......

- n1786b


User currently offlineCHIFLYGUY From United States of America, joined Aug 2006, 141 posts, RR: 0
Reply 19, posted (8 years 1 week 4 days 10 hours ago) and read 11647 times:

I also did not interpret it as saying existing production would move overseas. Rather, it strikes me as more likely that EADS is angling for another round of government handouts to save jobs. Future production could be moved elsewhere, however, if money to invest in high cost locations is not forthcoming.

Quoting Justloveplanes (Reply 12):
I think A will get a big chunk of the US tanker deal, but there will be no launch aid as a condition (not made public of course). My dos centavos.

I believe it is highly unlikely that Airbus will win any high profile US defense contracts in the near future, including the tanker deal. Even if they somehow won the selection process, I don't see how funding would make it through Congress. Problems facing EADS in this regard:

- Potential Russian stake in EADS - need I say more?
- Dependency on foreign suppliers who are at the mercy of their governments' political whims. France decides no more parts for US military planes because they disagree with stirkes on Iran or whatnot. This is a risk the US can't take.
- Long history of launch aid for commercial products that compete with Boeing
- EU's determination to build redundant, competitive systems for major US technology (e.g. Galileo)
- The A400M highly subsidized transport, and especially the way Pratt & Whitney was treated during the engine tender.

Europe has no grounds to stand on in wanting the US defense market opened up and it is going to be a political non-starter in Congress.

[Edited 2006-09-21 06:23:56]

User currently offlineSonic67 From United States of America, joined Jan 2005, 292 posts, RR: 0
Reply 20, posted (8 years 1 week 4 days 10 hours ago) and read 11611 times:

Long Beach California will have some extra floor space soon.  laughing 

User currently offlineIkramerica From United States of America, joined May 2005, 21534 posts, RR: 59
Reply 21, posted (8 years 1 week 4 days 10 hours ago) and read 11606 times:

It doesn't say A380 to be moved, but just plants. Read: A320. Have a nice day.


Of all the things to worry about... the Wookie has no pants.
User currently offlineWingedMigrator From United States of America, joined Oct 2005, 2214 posts, RR: 56
Reply 22, posted (8 years 1 week 4 days 10 hours ago) and read 11577 times:

Quoting Ikramerica (Reply 22):
Have a nice day.

Any other pearls of wisdom?  devil 


User currently offlineAstuteman From United Kingdom, joined Jan 2005, 10071 posts, RR: 97
Reply 23, posted (8 years 1 week 4 days 8 hours ago) and read 11408 times:
Support Airliners.net - become a First Class Member!

Quoting NAV20 (Reply 14):
With respect, Halibut, I think you maybe headlined the wrong point in the story.

In fact, Halibut, you headlined WRONG. Full-stop.!  Yeah sure

Quoting NAV20 (Reply 14):
As several people have pointed out, moving production is a very expensive and time-consuming process.

And yet considered perfectly reasonable business by Boeing as they outsource more and more on the 787, to gain overall efficiencies  Yeah sure

Quoting Ken777 (Reply 17):
I would be surprised if Airbus is not looking at the 787 approach to development & production of the 350.

I'd be astonished - particularly as they have publicly stated , before today, that their strategy is EXACTLY that.  Yeah sure

Congratulations, Halibut, for turning a very ordinary, but mildly interesting story into quite the most ridiculous thread I've ever come across on Civ Av.

Outsourcing to achieve lower cost is a standard business strategy that is being adopted by both Boeing and Airbus (and just about every other major businss you could ever think of, including every insurance comany and every financial institution)

So where's the story?
This should have been deleted long ago.

Astuteman


User currently offlineJustloveplanes From United States of America, joined Jul 2004, 1060 posts, RR: 1
Reply 24, posted (8 years 1 week 4 days 8 hours ago) and read 11401 times:

Quoting CHIFLYGUY (Reply 20):
I believe it is highly unlikely that Airbus will win any high profile US defense contracts in the near future, including the tanker deal. Even if they somehow won the selection process, I don't see how funding would make it through Congress. Problems facing EADS in this regard:

- Potential Russian stake in EADS - need I say more?
- Dependency on foreign suppliers who are at the mercy of their governments' political whims. France decides no more parts for US military planes because they disagree with stirkes on Iran or whatnot. This is a risk the US can't take.
- Long history of launch aid for commercial products that compete with Boeing
- EU's determination to build redundant, competitive systems for major US technology (e.g. Galileo)
- The A400M highly subsidized transport, and especially the way Pratt & Whitney was treated during the engine tender.

Let me clarify my points a bit here.

1) The U.S. tanker deal is not a given to be a winner take all Boeing or Airbus. It is Airbus' recent statements that say they believe they have an excellent chance of getting a significant PORTION (I can't recall the exact phrasing) of the US Tanker Deal. A did not say they had an excellent chance at the whole thing.

2) I think the reason they (Airbus) in fact are confident of getting a portion of the tanker deal is that they will be forgoing launch aid as a condition. I think the US is forcing the EU hand here, and a portion of the largest widebody deal on the planet will go to Airbus as a consolation prize.

3) Reason 2 especially is supported by BAE's comments that they would not be surprised if Airbus asks investors for a cash call. Take that in conjunction with the Guardian's points on drastic cost cutting and production restructuring at the expense of jobs and the conclusion is clear: Airbus has gotten itself into a severe cash crunch and the draconian nature of the actions Streiff is taking indicates to me no launch aid is coming in to help. I don't think he is bluffing, he is giving A an honest to goodness top to bottom re-engineering for the long term on a more standard commercial footing.

BAE has sold out, and the Russians are stepping in and trying to influence things (so far - not happening).


25 Jacobin777 : Think "Lou Dobbs".....its going to be an uphill battle for Airbus on the tanker contract..even part of it......
26 Post contains images Baroque : That ties the fate of a slab of Airbus to the tanker order. The dollars might be tempting, but someone in Airbus is going to ask how much they should
27 Post contains images Columba : Never heard of the KC380
28 David L : Technically? It's partly in Europe, mostly in Asia. West of the Urals, e.g. Moscow, is in Europe.
29 Sebolino : You obviously don't know what the "socialist economy" model is.
30 Post contains links NAV20 : EADS press release confirming further delays, duration and cost unknown:- "Consequently, from what is known today, there will be further delays. "The
31 Post contains links Halibut : My apologies fellas if I mis-titled the thread . However , the moving of production is mentioned ! Just not specific regarding the a/c . I saw the tit
32 Post contains images NAV20 : Sorry if I seemed overly critical, Halibut. But it does look as if moving production abroad is the least of Streiff's worries. When the trousers you'r
33 Post contains images Halibut : Agreed NAV20, It looks as though the A380 " at this time " has become a burden for Airbus . So much for job creation ! Halibut
34 Revelation : From the Guardian article: So a quick re-read of this yields: Current (assembly) work shifted from Hamburg to Toulouse More "components" bought from c
35 CHIFLYGUY : I would agree. The "dollar zone" is the US plus those countries which more or less peg their currency to the dollar. China would be Exhibit A here.
36 Baroque : That all makes a lot more sense, bit of a revelation you might say! Interesting if the main driver is the Euro rate, as it appeared for some years th
37 DAYflyer : Perhaps SEATTLE....wouldnt that be a kick in the pants....
38 Post contains images Lumberton : IIRC, EADS was hedged, but the hedges are expiring, or have already done so. The real irony here is that if EADS were to win the USAF tanker order an
39 Stitch : Airbus would be elligible for the same 20-year incentives we gave Boeing, so come on over! Rolls-Royce is considering (may have already agreed) to mo
40 Justloveplanes : I am thinking the launch aid resolution is between the US and EU as part of a larger trade agreement. Those two entities would be making the deal for
41 Baroque : Yes, I think that was part of the secret of walking on water for Airbus, but I thought the other half was that they bought so much from the US that t
42 Baroque : I suggest that the EU/US trade agreement would have to leave a fairly level playing field before the EU would give up the RLI card. But even half of
43 F22KA : OHHH NOOO! If they "eventually" move production outside EU, no one from EU could point its finger at Boeing and say: "it is not an American plane, it
44 Justloveplanes : When you think about force projection, a great (and expensive) portion of the US and EU air arsenal is mission constricted without the tankers. They
45 Post contains links Revelation : One thing that interests me is that Airbus's current planning is based on the high euro/dollar ratio. Interestingly enough, as it moves high-value pr
46 Zone1 : Well I think they will either move it to China or to the location they plan on building the KC30--Mobile, Alabama.
47 Baroque : Yes but, with the caveat that reducing sensitivity to changes in rates would be their target, not a direct benefit. Just having a stable environment
48 Thorben : Airbus will probably get a $20 bln tax break for moving the production to Seattle, WA. I can already see Halibutt as the plant manager.
49 Rheinbote : The idea of moving a stalled program of this order of magnitude anywhere is incredibly stupid. The idea of moving part of a company that suffers from
50 A342 : Halibut, your ridiculous posts never cease to amaze me. Did you know that Airbus is DESPERATELY looking for engineers, for its EUROPEAN plants ? Obvio
51 Art : The UK is not a socialist state. France is not a socialist state. Germany is not a socialist state. Apart from those points, I think there is somethi
52 Post contains images Glideslope : This is the BEST decision Airbus could make. The entire EU "everyone needs to be happy" crap is half the problem with this beast. For the Love of Pete
53 Post contains images Glideslope : This mind set is exactly why it is failing. To think people talk about arrogant Americans. ROFLOL.
54 Scorpio : That has got to be the biggest pile of steaming doodoo I've read on here in a very long time. I don't even know where to begin tearing it apart. The
55 Katekebo : I have been slammed several times on this forum for, accordingly to our EU friends, my repetitive defence of "predatory, ruthless capitalist practices
56 A342 : There is an important flaw in your theory. Yes, maybe production costs are high, but the company still remains competitive. This can be done by 2 dif
57 Halibut : Oh , you forgot 1 ! The Concorde ! Halibut
58 Post contains images A342 : Still better than no product at all ! But what about the Convair 880/990 ? I mean, we could go on endless, bu there is no reason for doing so.
59 Shenzhen : Simply can't see where in the article it states that the 380 production might be mooved outside of the EU. Maybe a little piece here or a little piece
60 Katekebo : Have you realized that European car manufacturers have been consistently loosing share to Japanese (and lately Korean) manufacturers? The profitabili
61 Post contains images Rolfen : Living prices in europe are outrageous, moving production to cheaper countries (and there are lots of these ) will result in drastic cost reduction i
62 Post contains images Socal : North Korea.....I think....
63 Post contains links Halibut : http://www.businessweek.com/globalbi...news+index_businessweek+exclusives Another A380 Delay Rocks Airbus A Sept. 21 announcement confirms rumors of m
64 Gbfra : The need for ongoing oursourcing had already been expressed by former Airbus-CEO Gustav Humbert. So that's nothing new. As for Russia: You cannot prev
65 Shenzhen : Guess it would be up to those in Government to determine if EADS is a strategic assest with sensative information, before it was sold to the Russians
66 DeltaJet757 : That's just going to cause more delays in production.
67 Bnamaxx : Move it to Russia. Change the name to Airbuski. Seriously, where do people come up with some of these idiotic rumors?
68 Baroque : I do wonder what a socialist is thought to be by some on a.net. Time to get the kids back up the chimneys, and knock down the monuments to Early Grey
69 Katekebo : You're absolutely right that some American companies are in deep trouble and need to reform or will die. The specific example of Ford and GM is that
70 Elvis777 : katekebo, I dont agree with your last few posts. I think that you are misinformed and are making very superficial statements that completely miss the
71 A342 : As already stated, the future isn't too rosy for for or GM, too. VW and Mercedes may be in some trouble, too, but other good examples, which are bigg
72 Baroque : I know that was to Katekebo, but here are my two cents. I am not really sure I understand the Aus system and I live here, so I AM sure I don't unders
73 Post contains links Halibut : http://bloomberg.com/apps/news?pid=c...conews&tkr=EAD:FP&sid=a3Z9PbJehdMY Airbus, which delayed the A380 superjumbo jet for a second time in three mon
74 Lumberton : Well, in this case we have a wire service citing an article in a French newspaper, quoting unnamed company officials. Yikes! A couple of thoughts and
75 Baroque : If you have access to a wire service Lumberton, perhaps you should advise Airbus quickly, they seem to have need of one of those! Peace!!
76 Speedbird747BA : Never gonna happen! Cheers, Kyle
77 Parabolica : I think that outsourcing more of the aircraft to countries outside the EU like Russia, other former Soviet states as well as Asia is going to have to
78 DeltaDC9 : GM is rebounding just fine, sales are far beyond expectations and concessions by the unions and employees are happening as we speak. It is simply a r
79 A342 : I did - and still, my point of view hasn't changed. it may look a bit better now, but certainly not rosy.
80 Hb88 : What. Crap. No disrespect to our American friends, but this is a chrome-plated example of why some people in the US (and elsewhere) need to inform th
81 Post contains links Lumberton : Latest news I could find: http://www.easybourse.com/Website/dy...wsID=64104&lang=fra&NewsRubrique=2 "a profound reorganization of Airbus"?
82 Post contains images TeamAmerica : Seconded, Hb88, but let's please recognize that the reverse is true as well. We'd all do better to stick to talking about aviation, and leave out the
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