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How Do You Think The Eads Crisis Will Be Solved?  
User currently offlineAminobwana From , joined Dec 1969, posts, RR:
Posted (7 years 4 months 1 week 4 days 17 hours ago) and read 4876 times:

I would like to hear opinions about how (and if) it can be solved and its consequences.

Thanks in advance

aminobwana

92 replies: All unread, showing first 25:
 
User currently offlineBasefly From Denmark, joined Apr 2007, 205 posts, RR: 0
Reply 1, posted (7 years 4 months 1 week 4 days 17 hours ago) and read 4862 times:

They are in the middle of Power 8, and it seems that the consequences is going to be 10,000 jobs lost.


Of course it is going to be solved, the next couple of years are going to be Airbus comeback years i am sure...

Just my  twocents 



757/777-A340/A380, Love them.
User currently offlineSphealey From United States of America, joined May 2005, 377 posts, RR: 0
Reply 2, posted (7 years 4 months 1 week 4 days 17 hours ago) and read 4862 times:

In order to discuss that it seems to me we would need to first define (1) what exactly the "EADS crisis" is (2) what concerns the key stakeholders actually have with the current situation/direction. Particularly on point 2, it seems to me that there may not be anywhere near as much unhappiness as is being reported in the aviation press and (of course) the aviation blogs.

sPh


User currently onlineStitch From United States of America, joined Jul 2005, 30889 posts, RR: 87
Reply 3, posted (7 years 4 months 1 week 4 days 17 hours ago) and read 4852 times:
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Yes it will be solved, because it has to be, therefore it will.

How it will be solved will probably involve a number of things we do know about:

  • Power8 or some other restructuring program
  • Partnerships with foreign countries (like Russia and Qatar)
  • Additional support and investment from the four core EU members [UK, France, Germany, Spain]

And a number of things yet to be discovered.


User currently offlineNAV20 From Australia, joined Nov 2003, 9909 posts, RR: 36
Reply 4, posted (7 years 4 months 1 week 4 days 16 hours ago) and read 4783 times:

Good question, Aminobwana!  Smile

Quoting Sphealey (Reply 2):
In order to discuss that it seems to me we would need to first define (1) what exactly the "EADS crisis" is (2) what concerns the key stakeholders actually have with the current situation/direction.

The crisis would appear to be rooted in the fact that Airbus currently has no truly competitive models to offer in competition with the 787 and 777. That problem will not be solved overnight; at least a five-year timescale will be required. Ideally, Airbus should produce two new models, not the single one - the A350XWB - that is currently proposed. Two models are probably out of the question on grounds of cost - so they HAVE to make sure that the XWB, at any rate, is highly-competitive.

A possible new problem is that Boeing are 'making noises' about developing a new single-aisle, which would give them a competitive advantage over the A320 as well. I really don't see what Airbus can possibly do about that, starting from here.

So it's clear that Airbus are facing a number of 'lean years,' whatever they do. In all probability much more severe cutbacks than those proposed in Power 8 will be required.

The underlying problem, though, remains political interference. There is more and more evidence that the French and German Governments are at complete loggerheads with each other - and that, as a result, the company is unable to take key decisions. The latest deadlocks are over whether to pay a dividend, and how to raise further capital:-

(Excerpts - link to full story below)

"PARIS (AFP) - Directors at European aerospace giant EADS said Tuesday they had failed to reach agreement on paying shareholders a 2006 dividend, underlining a crisis at the group and its aircraft manufacturing subsidiary Airbus.

"The members of the board were not able to come to an agreement on a dividend proposal," the European Aeronautic Defence and Space company said in a document submitted to shareholders ahead of its May 4 general assembly.

"The group has therefore allowed shareholders themselves to decide on the question, it said.

"In the absence of a proposal from the board the shareholders will be able to propose that the net result of the 2006 tax year, or 99 million euros (133 million dollars), should be added to the profits maintained or distributed in the form of a dividend, wholly or partially," EADS said.

"But the principal EADS shareholders, German automaker DaimlerChrysler, 15 percent, a consortium of German investors, 7.5 percent, French media and technology group Lagardere, 15 percent, and the French state, 15 percent, have been at loggerheads over whether to pay a dividend.

"Lagardere is in the process of selling 7.5 percent of its 15 percent holding.

"The French government has opposed rewarding shareholders, given the dramatic fall in profits and thousands of job losses planned at Airbus this year.

"Industrial logic should come before financial logic," Prime Minister Dominique de Villepin said in early March.

"The EADS board also has decided against proposing a capital increase to shareholders at the annual general meeting, according to the document obtained by AFP.

"The group has said it will require external finance at some point, either through a share capital increase or via a bond issue, because of production problems at Airbus and the cost of new projects.

"A capital increase would be a delicate operation at EADS, a highly politicised company with a fine balance of power between French and German shareholders.

"Any capital increase would have to be financed by all shareholders equally if the balance were to be maintained and they have been unable to agree on the operation, according to sources.

"EADS co-chief executive Louis Gallois, who is also chief executive of Airbus, said last month there was "no urgency for a capital increase" by EADS.

"EADS is to confirm at the general assembly that its operating profit will be stable in 2007 compared to the 2006 level but that Airbus will report another "substantial loss" this year as it undergoes a painful restructuring."


http://au.biz.yahoo.com/070410/33/16oss.html

Getting Airbus out of its present mess will be a difficult and lengthy business anyway. There would appear to be no possibility of even STARTING the job if the two key governments go on disagreeing at every turn.

The picture may become clearer after the French elections (which finish on 6th. May). But only MAY......



"Once you have flown, you will walk the earth with your eyes turned skywards.." - Leonardo da Vinci
User currently offlineSphealey From United States of America, joined May 2005, 377 posts, RR: 0
Reply 5, posted (7 years 4 months 1 week 4 days 13 hours ago) and read 4701 times:

NAV20,
I don't disagree with your analysis, but I think you are leaving out two factors. First, the major airplane buyers are not going to allow a situation to develop where there is only one viable manufacturer. Lockheed and McDonnell-Douglas are gone, and it doesn't currently appear that Embraer will move into the 150-550 market. Russia and the PRC are long-term wildcards for now, so that leaves the definition of "one viable" somewhere around 40% market share for Airbus (or whoever is down in the current cycle). Clearly there are limits to this; airlines won't buy planes that are utterly uncompetitive just to prop up a manufacturer. But Airbus' offerings are nowhere near uncompetitive at this point even against the 787.

Second, what I was hinting at in my OP was that I suspect the true Airbus stateholders are not really dissatisfied with the jobs and technology "juice" that Airbus provides to the EU economy. They might be perfectly happy to slap around a few scapegoats in public and do a bit of reorganizing, then just continue as before.

sPh


User currently offlineIkramerica From United States of America, joined May 2005, 21507 posts, RR: 60
Reply 6, posted (7 years 4 months 1 week 4 days 13 hours ago) and read 4691 times:

Quoting Sphealey (Reply 5):
First, the major airplane buyers are not going to allow a situation to develop where there is only one viable manufacturer.

the airlines do not collude. they will not ask their friends before buying.

yes, SOME carriers, like EK and SQ will try to split orders. But that doesn't mean that the whole industry will split orders, as they want to be profitable, and the Boeing or Airbus give the best plane, they will go with it.

So you get a situation where some carriers buy a "token" number of the "wrong" model in an effort to keep the other man. afloat, but that alone can't actually keep the other manufacturer afloat.

Further, if Airbus or Boeing falters, why would a third party come to the table? For example, Airbus is leaving a big hole in the 788 class, and you might see China fill it before Airbus gets around to it.

Ditto the 752 replacement. If Boeing or Airbus don't get off their asses and create a real replacement, that EXCEEDS the abilities of the 752, you might see Brazil or the Chinese jump on that, too...



Of all the things to worry about... the Wookie has no pants.
User currently offlineSphealey From United States of America, joined May 2005, 377 posts, RR: 0
Reply 7, posted (7 years 4 months 1 week 4 days 13 hours ago) and read 4688 times:

> But that doesn't mean that the whole industry will split orders, as
> they want to be profitable, and the Boeing or Airbus give the best
> plane, they will go with it.

That wasn't my experience in another capital-intensive industry where there was a duopoly on the supply side. No one ever wrote it down, but every executive in the industry knew where the viability point for the weaker supplier was and nudged the purchasing decisions as needed.

sPh


User currently offlineConcordeBoy From , joined Dec 1969, posts, RR:
Reply 8, posted (7 years 4 months 1 week 4 days 13 hours ago) and read 4672 times:

Quoting Aminobwana (Thread starter):
How Do You Think The Eads Crisis Will Be Solved?

If you want the short answer:
when Airbus starts being run solely as a market-driven corporate entity rather than any vestiges of social employment program.

Simple, but not easy (for them) at all.

Quoting NAV20 (Reply 4):
The underlying problem, though, remains political interference.

Underlying?
The case could easily be made that it's the root problem.


User currently offlineAminobwana From , joined Dec 1969, posts, RR:
Reply 9, posted (7 years 4 months 1 week 4 days 13 hours ago) and read 4661 times:

Quoting Aminobwana (Thread starter):
QUOTE SELECTED TEXT_

NAV20 From Australia, joined Nov 2003, 4357 posts, RR: 10
Reply 4, posted Sun Apr 15 2007 09:12:35 your local time (52 minutes 12 secs ago) and read 53 times:

Quoting Sphealey (Reply 2):
In order to discuss that it seems to me we would need to first define (1) what exactly the "EADS crisis" is (2) what concerns the key stakeholders actually have with the current situation/direction.

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
Pls. see below the comments Iinserted in your text.
After you have read my posting I indicate above, i would be happy to hear your further comments
Good question, Aminobwana!
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

The crisis would appear to be rooted in the fact that Airbus currently has no truly competitive models to offer in competition with the 787 and 777. That problem will not be solved overnight; at least a five-year timescale will be required. Ideally, Airbus should produce two new models, not the single one - the A350XWB - that is currently proposed. Two models are probably out of the question on grounds of cost - so they HAVE to make sure that the XWB, at any rate, is highly-competitive.
---------------------
--------------------
Comment No.1
-------------------
The interesting points you raise refer to the technical induced problems of AIRBUS

To compare your further points with my assessment, which are very compatible, pls refer to:
"EK A350 Audit A350 Closes Gap On B787
Aminobwana Reply 244, posted Fri Apr 13 2007 23:21:23 your local time (1 day 10 hours 55 minutes ago)
and read 1134 times"

To ask "which Crisis" as SPHEALEY does seems ironic, as the world press is full of it, being one of the principal issues of the French elections, all candidates, the prime-minister and several other are using the word CRISIS continuously!
-------------------
End comment No.1
-------------------
A possible new problem is that Boeing are 'making noises about developing a new single-aisle, which would
give them a competitive advantage over the A320 as well. I really don't see what Airbus can possibly do
about that, starting from here.
-------------------
Comment No.2
------------------
Fully agreed; Factually, the present models of the Cash-cow A320 are based on a 20 year concept and it is
clearly visible that the B737NG is beginning to cut away their market-share, as well CANADAIR and
EMBRAER on the lower end. It seems obvious that they have not developed the A320NG because all the
resources were swallowed by the A380 !
------------------
End comment No.2
------------------

So it's clear that Airbus are facing a number of 'lean years,' whatever they do. In all probability much more
severe cutbacks than those proposed in Power 8 will be required.
FACT IS THAT POWER 8 NOT ONLY FAILS TO ADDRESS THE MAIN PROBLEMS, BUT TO SHOW
THAT THEY ARE WILLING TO BE ENERGETIC, CUT JOBS, WHEN THE PROBLEMS DO NOT LAY
WITH THE WORKFORCE. THIS WILL ONLY WORSEN THE PROBLEM, AS AND Irtysh-Avia (Kazakhstan)">IT WILL DELAY THE SHIPPING
OF THE HUGE BACKLOG AND CREATE MORE CASH FLOW AND FINANCING PROBLEMS.

The underlying problem, though, remains political interference. There is more and more evidence that the French and German Governments are at complete loggerheads with each other - and that, as a result, the company is unable to take key decisions. The latest deadlocks are over whether to pay a dividend, and how to raise further capital:-

Getting Airbus out of its present mess will be a difficult and lengthy business anyway. There would appear to be no possibility of even STARTING the job if the two key governments go on disagreeing at every turn.

The picture may become clearer after the French elections (which finish on 6th. May). But only MAY......

-----------------------
*********************************************************
COMMENTS No.1 and 2 are inserted in your text !!
*********************************************************
COMMENT No. 3
-----------------------
The deadlock problems you refer and the issues as addressed in the excerpt you quote further bellow are not
even the most grave problem, which is that no state dominated enterprise will be able to solve these problems,
as theyprecisely originated in the fact that such enterprises always put the political and here also the
chauvinistic interests in front of the needs of the company Obviously, if the company is multi-state and subject
to conflicting interest, this increase quadratically!.
A separate even if related issue is that AIRBUS through all its history has been living on Life Support by gigantic
subsidies, and what is really outrageous, the French politician as well the German, even with less enthusiasm,
have openly indicated that they will continue this path, WTO and US be screwed.
And, as I know be long personal experience dealing with state or state supported enterprises, the fact that
Papa State will always be there to cover their fracas, let the political appointed or supported managers and
Boards act irresponsibly, the now very public ex-CEO FORGEARD is a typical example.
And when a real manager as M. CHRISTIAN STREIFF states the true, telling that the company is limping
10 years behind BOEING, he is "ceremoniously" fired (pardon: he resigned !!)

If AIRBUS were a private company, it would have declared bankruptcy a long time ago, restructured and c
ontinued business with its strong parts. Instead, they are trying to cope with most serious problems with the widebodies, as the A340, A350 and A380, as well as the A400 (as they have admitted publicly), the only
bright point beeing the A330, which will probably become obsolete after the B787 becomes more available

As for the typical misleading comment from GALLOIS that EADS n o w doesnt need money: This in true
if refrred to 2007, but totally untrue and critical from 2008 on, and so there is a very short time to raise it!!

I have only one point I do not agree with you: the problems will not alleviate after the French elections, the
policy of their governments always followed the path of state intervention and subsidies, as well as bullying
the partners. This got somewhat better in the last years of MITTERAND, but as it is "presque" sure that
Sarkozi, Chirac's candidate, will win, all will continue as it is.

AMINOBWANA

(Excerpts - link to full story below)

"PARIS (AFP) - Directors at European aerospace giant EADS said Tuesday they had failed to reach agreement on paying shareholders a 2006 dividend, underlining a crisis at the group and its aircraft manufacturing subsidiary Airbus.

"The members of the board were not able to come to an agreement on a dividend proposal," the European Aeronautic Defence and Space company said in a document submitted to shareholders ahead of its May 4 general assembly.

"The group has therefore allowed shareholders themselves to decide on the question, it said.

"In the absence of a proposal from the board the shareholders will be able to propose that the net result of the 2006 tax year, or 99 million euros (133 million dollars), should be added to the profits maintained or distributed in the form of a dividend, wholly or partially," EADS said.

"But the principal EADS shareholders, German automaker DaimlerChrysler, 15 percent, a consortium of German investors, 7.5 percent, French media and technology group Lagardere, 15 percent, and the French state, 15 percent, have been at loggerheads over whether to pay a dividend.

"Lagardere is in the process of selling 7.5 percent of its 15 percent holding.

"The French government has opposed rewarding shareholders, given the dramatic fall in profits and thousands of job losses planned at Airbus this year.

"Industrial logic should come before financial logic," Prime Minister Dominique de Villepin said in early March.

"The EADS board also has decided against proposing a capital increase to shareholders at the annual general meeting, according to the document obtained by AFP.

"The group has said it will require external finance at some point, either through a share capital increase or via a bond issue, because of production problems at Airbus and the cost of new projects.

"A capital increase would be a delicate operation at EADS, a highly politicised company with a fine balance of power between French and German shareholders.

"Any capital increase would have to be financed by all shareholders equally if the balance were to be maintained and they have been unable to agree on the operation, according to sources.

"EADS co-chief executive Louis Gallois, who is also chief executive of Airbus, said last month there was "no urgency for a capital increase" by EADS.

"EADS is to confirm at the general assembly that its operating profit will be stable in 2007 compared to the 2006 level but that Airbus will report another "substantial loss" this year as it undergoes a painful restructuring."

http://au.biz.yahoo.com/070410/33/16oss.html


User currently offlineAminobwana From , joined Dec 1969, posts, RR:
Reply 10, posted (7 years 4 months 1 week 4 days 13 hours ago) and read 4626 times:

Quoting Aminobwana (Thread starter):
ConcordeBoy From United States, joined Feb 2001, 15352 posts, RR: 70
Reply 8, posted Sun Apr 15 2007 11:56:28 your local time (21 minutes 42 secs ago) and read 38 times:


Quoting Aminobwana (Thread starter):
How Do You Think The Eads Crisis Will Be Solved?

If you want the short answer:
when Airbus starts being run solely as a market-driven corporate entity rather than any vestiges of social employment program.

Simple, but not easy (for them) at all.

Quoting NAV20 (Reply 4):
The underlying problem, though, remains political interference.

Underlying?
The case could easily be made that it's the root problem

Very well said !

Could I ask you how far you agree with my posting:
"EK A350 Audit A350 Closes Gap On B787
Aminobwana Reply 244, posted Fri Apr 13 2007 23:21:23 your local time (1 day 10 hours 55 minutes ago)
and read 1134 times"

A stupid question ! As I saw that you underlined the ROOT word in your posting (I am a new member)
How I can make underlinings and boldings ??

Thanks in advance

Aminobwana


User currently offlineMEA-707 From Netherlands, joined Nov 1999, 4313 posts, RR: 36
Reply 11, posted (7 years 4 months 1 week 4 days 12 hours ago) and read 4604 times:

They are on their way. 2007 HAS to generate more positive news then 2006, like a successful entry of service of the A-380 and a major order for the A-350 (think of Emirates or Qatar confirming 60-ish, or a surprise new top client like United, BA or Lufthansa). Combined with a continued strong orderbook for the A-320 and A-330 that will mean the worst is over and they will remain the manufacturer close to Boeings market share for years to come.


nobody has ever died from hard work, but why take the risk?
User currently offlineConcordeBoy From , joined Dec 1969, posts, RR:
Reply 12, posted (7 years 4 months 1 week 4 days 12 hours ago) and read 4588 times:

Quoting MEA-707 (Reply 11):
2007 HAS to generate more positive news then 2006, like a successful entry of service of the A-380

Which hasn't happened yet....

Quoting MEA-707 (Reply 11):
and a major order for the A-350 (think of Emirates or Qatar confirming 60-ish, or a surprise new top client like United, BA or Lufthansa).

...nor has this.


Something about counting-your-eggs cher?


User currently offlineRheinbote From Germany, joined May 2006, 1968 posts, RR: 53
Reply 13, posted (7 years 4 months 1 week 4 days 12 hours ago) and read 4574 times:

Quoting Basefly (Reply 1):
They are in the middle of Power 8, and it seems that the consequences is going to be 10,000 jobs lost.

- Expect no more details on Power8 execution until after the French election.  Wink
- Airbus XFW will hire an additional 1.000 blue collars this year. How's that?  scratchchin 
- Upper ranks are being mopped up in the right places without much fanfare.  thumbsup 


User currently offlineBasefly From Denmark, joined Apr 2007, 205 posts, RR: 0
Reply 14, posted (7 years 4 months 1 week 4 days 12 hours ago) and read 4573 times:

Quoting ConcordeBoy (Reply 12):
Quoting MEA-707 (Reply 11):
2007 HAS to generate more positive news then 2006, like a successful entry of service of the A-380

Which hasn't happened yet....

That like saying that you doubt that the 787 will enter service, just because it havent done so yet.

The A380 WILL enter service this year, even if it mean that Airbus will install the seat from their cafeteria, they will get that whale flying this year, rest assure....!
 silvermedal 



757/777-A340/A380, Love them.
User currently offlineBasefly From Denmark, joined Apr 2007, 205 posts, RR: 0
Reply 15, posted (7 years 4 months 1 week 4 days 12 hours ago) and read 4562 times:

Quoting Rheinbote (Reply 13):
Expect no more details on Power8 execution until after the French election.
- Airbus XFW will hire an additional 1.000 blue collars this year. How's that?
- Upper ranks are being mopped up in the right places without much fanfare.

I did not know about them hiring 1000 more.....

I must admit that i fear the French no matter how the election turns out, will go national on EADS, and demand no layoffs.


The biggest problem Airbus have (at the moment) , i think we can all agree, is French politics, and to a much lesser extent German politics.....
 ashamed 



757/777-A340/A380, Love them.
User currently offlineConcordeBoy From , joined Dec 1969, posts, RR:
Reply 16, posted (7 years 4 months 1 week 4 days 11 hours ago) and read 4524 times:

Quoting Basefly (Reply 14):

That like saying that you doubt that the 787 will enter service, just because it havent done so yet.

Your comparison is utterly ridiculous.

Quoting Basefly (Reply 14):
The A380 WILL enter service this year, even if it mean that Airbus will install the seat from their cafeteria, they will get that whale flying this year, rest assure....!

....the same may have been surmised in 2006, after the first year's delay. As you don't see the future, nor the internal workings of Airbus production for that matter; you cannot with any such assuredness guarantee an EIS until it's actually occurred. End of story.


User currently offlineMEA-707 From Netherlands, joined Nov 1999, 4313 posts, RR: 36
Reply 17, posted (7 years 4 months 1 week 4 days 11 hours ago) and read 4499 times:

Quoting Basefly (Reply 14):
That like saying that you doubt that the 787 will enter service, just because it havent done so yet.

Come on, you are reading too much in it. It's like 95% sure the A-380 will enter service this year, and otherwise early in 2008, same as that the 787 will enter pax service next year. But this small chance of major snags or further delays would be a nightmare. Or that the aircraft IS entering service but all kind of reliability and efficiency issues will dominate the news. But actually I am pretty sure Airbus will have a nice 2nd half of 2007 with some good news on the A-380. Enthousiast first passengers, a few small orders here and there.



nobody has ever died from hard work, but why take the risk?
User currently offlineAminobwana From , joined Dec 1969, posts, RR:
Reply 18, posted (7 years 4 months 1 week 4 days 11 hours ago) and read 4499 times:

Quoting Aminobwana (Thread starter):
SEND INSTANT MSGADD TO RESP MEMBERSSUGGEST DELETIONQUOTE SELECTED TEXT_

Sphealey From United States, joined May 2005, 140 posts, RR: 0
Reply 5, posted Sun Apr 15 2007 11:41:26 your local time (1 hour 13 minutes 16 secs ago) and read 109 times:


NAV20,
I don't disagree with your analysis, but I think you are leaving out two factors. First, the major airplane buyers are not going to allow a situation to develop where there is only one viable manufacturer. Lockheed and McDonnell-Douglas are gone, and it doesn't currently appear that Embraer will move into the 150-550 market. Russia and the PRC are long-term wildcards for now, so that leaves the definition of "one viable" somewhere around 40% market share for Airbus (or whoever is down in the current cycle). Clearly there are limits to this; airlines won't buy planes that are utterly uncompetitive just to prop up a manufacturer. But Airbus' offerings are nowhere near uncompetitive at this point even against the 787.

Second, what I was hinting at in my OP was that I suspect the true Airbus stateholders are not really dissatisfied with the jobs and technology "juice" that Airbus provides to the EU economy. They might be perfectly happy to slap around a few scapegoats in public and do a bit of reorganizing, then just continue as before.

1) As for
"the major airplane buyers are not going to allow a situation to develop where there is only one viable
manufacturer. Lockheed and McDonnell-Douglas are gone"
Pls. refer to a posting I already made under another title, which I attach on the end of this message. I would be
happy to hear your opinion regarding the content.
As you see, I had addressed the monopoly issue on the end of said message.
I agree with you that it cannot be said that AIRBUS is not competitive, but have extreme serious deficiencies
mainly in planning (market adaptation A340 and original A350, market assessment and airport adaptation
A380, irrational manufacturing and assembling chain)) and compliance with specs (A340 and A 380 weight
problems). But of course: this per se are not reasons to liquidate them. Basicly, if the top management would
do its job instead to try to please the politicians of their country, and the managers cease to be named by a
quota system instead of merits,many of these problems would disappear. This is typical of state enterprises,
I have 40 years experience to deal
with such. Of course, multi-state is even worse !
And as you mention Lockheed (and I add Northrop): As far I hear, they are looking carefully at the situation.
They
have not lost their VLA and LA building capacity and would come back immediately if AIRBUS is out from
the wide-body business. Obviously AIRBUS, or successor will and should not leave the single aisle one!
So a joint venture Lockheed-Northrop and eventually BAE could provide the needed competition, possibly
not even much later than AIRBUS would be able to clear its act, which possibly will be never as long they do
not get rid of the politicians and only if they are able to attract private investors

2) as for
",what I was hinting at in my OP was that I suspect the true Airbus stockholder's are not really dissatisfied
with thejobs and technology "juice" that Airbus provides to the EU economy. They might be perfectly happy
to slap around a few scapegoats in public and do a bit of reorganizing, then just continue as before.[/quote]

Here I most definitively disagree.
* Daimler and LAGARDERE are on they way out taking huge losses. especially Daimler, having lost already
a lot of money by getting arrogant and overvalue their capacities by going international (Chrysler, Mitsubishi,
the joint venture of the mini-hybrid).
* there is anybody private remotely interested to invest money as long the French state is in, and such
candidates as Russia, Qatar and China lurk in the background, each one having special interests not
convenient for the company.
* the smaller investors on the Stock exchange, with the stock going south continuously, obviously are most
unhappy, also because of the negative impression of the bickering within EADS, the public customer
corruption accusations and the official investigation of insider trading of MM. Lagardere and Foregeard, in
the last days enhanced by the Golden Parachute of the latter, something not so usual in Europe as
in the US.
* The French state obviously considers the contribution of EADS/AIRBUS to the economy, but cannot be
happy given the situation and the perspective to inject additional 8-figure billions Euros in subsidies and
capital increase.when they have already a too high budget deficit.

What you possibly mean that there are a lot of AIRBUS admirers (many of them by a reverse anti-US
attitude), but obviously this can go only so far...

And, as you say, after spending billions, all will revert to the present handling, then AIRBUS will limp
along and progressively be a token competitor for BOEING, which would make the latter very happy (


As said, see below my posting No. 244 Apr.13

best regards

aminobwana


"EK A350 Audit A350 Closes Gap On B787 Aminobwana Reply 244, posted Fri Apr 13 2007

I am German-Venezelan, from a pure European family, over 70, a former Director from the largest German
E-Konzern and therefore surly not anti-European. I find it bizarre that anythink somebody says in favor or against Boeing or Airbus immediately gets many emotional and inobjective comments !

This said, I cannot understand how anybody can put the fortune of his airline on stake ordering (at least)
anythingfrom Airbus other then A320/330. The A380 has still a lot of problems and the A350XWB exists only
on paper and again I find it preposterous that anybody (including the overrated Mr. Tim Clark, if he is not only
posing) can say it is better or worse than the almost already flying B787. What you draw on a paper is one
thing, the reality is an other !!
I notice that our Forum, where I am a newcomer, is highly qualified technically, but does not consider much
the economical and financial problems (outside the directly to the Aircraft related) of the enterprises, which
unfortunately from our point of view of us engineers are more weighty then the purely technical . Therefore I
can understand that it can be thought that above technical problemens, and other (as the misplanned A340)
can be solved, but the main reason not to place orders is the state of the company, which is structurally 10 years+ behind Boeing (quoting the former CEO of Airbus the very prestigeous and succesful (as CEO of
St. Gobain, between other, now he is CEO of Peugot) former CEO of AIRBUS M. CHRISTIAN STREIF. Dual
top management, other managers appointed by quotas instead merits, the same for manufactring sites and subcontractors, subject to political pressures by the French government, with the private EADS shareholders DAIMLER and LAGARDERE on they way out (BAE laredy gone) and none other private investors interested ,
the only way out (meaning the schievement of the capital for EADS to be able to susbsist) is a takeover by
the French state and such other state interests as Russian, Qatari and possibly Chinese, which have each
one its own nationalistic agenda much in front of the interest of the company. And such not only state, but
multistate bureaucratic company will never be able to solve the existing organizational problems, probably
they would get worse, and the company would only be able to function with increased level of the already
high subsidies.
In the meantime, due to the fight on the top and labor unrest, the comapny is nearly paralyzed.

And of course, order annoucements as the Qatari und Russian for the A350, inspite thatt both countries
declared these were merely LOIs (and -as not declared but generally known- conditioned to that their
investment is accepted and the obtention of board seats,) as well as the increasingly loud public accusations
of customer corruption and insider trading on the highest level, do not contribute to the confidence of present
and future shareholders.

Obviously, many airlines are reticent and try to delay to act basing on these facts, by a logical fear of a
BOEING quasi monopoly on the wide-body sector, some of them also due to their exceedently cordial past
relations with EADS and possibly a few because of their anti-US political position, but there is no way to go
around the facts. Obviously, there exist solutions, bur as these are very hard and painful, they are not even
seriously considered, as the POWER 8 restructuring plan shows, which as one of its main "ideas" is to fire a
part of the workforce (ignoring that the crisis was originated by the same Board and EADS co-CEOs (one of
them being the CEO of AIRBUS) which invented the plan, at a moment where one of the most grave
financial problems is the lack of cash flow due to the slowness to get rid of the enormous order backlog, which
only would produce more slowdown composed by labor unrest,

AN UNORTHODOX AND PROBABLY UNREALISTIC IDEA: IF THIS FORUM COULD PRODUCE AN ASSESS-
MENT OF THE SITUATION AND PROPOSE SOLUTIONS, THIS WOULD BE A GREAT THING !!

aminobwana


User currently offlineConcordeBoy From , joined Dec 1969, posts, RR:
Reply 19, posted (7 years 4 months 1 week 4 days 11 hours ago) and read 4491 times:

Quoting MEA-707 (Reply 17):
It's like 95% sure the A-380 will enter service this year, and otherwise early in 2008

You just contradicted your own previous arguement.... rendering your assessment more worthless now, if such a thing is indeed possible, than it was to begin with.  Yeah sure


User currently offlineAminobwana From , joined Dec 1969, posts, RR:
Reply 20, posted (7 years 4 months 1 week 4 days 11 hours ago) and read 4472 times:

Quoting Aminobwana (Thread starter):
SUGGEST DELETIONQUOTE SELECTED TEXT_

MEA-707 From Netherlands, joined Nov 1999, 2407 posts, RR: 14
Reply 11, posted Sun Apr 15 2007 12:44:28 your local time (1 hour 21 minutes 17 secs ago) and read 105 times:


They are on their way. 2007 HAS to generate more positive news then 2006, like a successful
entry of service of the A-380 and a major order for the A-350 (think of Emirates or Qatar confirming
60-ish, or a surprise new top client like United, BA or Lufthansa). Combined with a continued
strong orderbook for the A-320 and A-330 that will mean the worst is over and they will remain
the manufacturer close to Boeings market share for years to come

I agree with you under condition that these confirmation were not conditionesd. A order from
Qatar Air means very little, as nobody knows if they are able to convert their struggling
organization in a large airline (money alone doesn't makes it, th competion is also very hard).
As the A350XWB is a paper aircraft, as not even carefully studied because of the time lost with
the first A350, obviously the final specs will differ a lot from the offered and they would be able
to cancel the order anytime. But to place such a token order would ensure them an extremely
low price, delivery slots and a improved chance to be admitted as a institutional investor at EADS.
If they are not, adieu order!!

The Russian position is the same, only Aeroflot is already a big airline.

A real probable for Airbus are their misleading announcements. In above cases, first they
announced ORDERS. later both Russian and Qataris had to clarify that this were LOI's
So unfortunately their statements are to be taken very cautionably!

aminobwana


User currently offlineAminobwana From , joined Dec 1969, posts, RR:
Reply 21, posted (7 years 4 months 1 week 4 days 10 hours ago) and read 4461 times:

Quoting Aminobwana (Thread starter):
MEMBERSSUGGEST DELETIONQUOTE SELECTED TEXT_

Rheinbote From Germany, joined May 2006, 630 posts, RR: 5
Reply 13, posted Sun Apr 15 2007 13:13:46 your local time (1 hour 17 minutes ago) and read 102 times:


Quoting Basefly (Reply 1):
They are in the middle of Power 8, and it seems that the consequences is going to be 10,000 jobs lost.

- Expect no more details on Power8 execution until after the French election.
- Airbus XFW will hire an additional 1.000 blue collars this year. How's that?
- Upper ranks are being mopped up in the right places without much fanfare

1)" Expect no more details on Power8 execution until after the French election"
I agree !! Then it will be probably scrapped, which would be a good thinj, as the
Plan does not address any real issue. The personnel reduction makes no sense.
the problem is not labor originated, but mismanagement. With less personnel
the cash flow problem will become wors, nor better
2) "Airbus XFW will hire an additional 1.000 blue collars this year. How's that? :
If this is true, it seems not compatible with Power 8. But this is unimportant.
Fact is that AIRBUS has only a purely theoretical design, where they promised any-
thing custmers as TIM CLARK asked. To hire personnel strictly assigned to this
project seems more or less similar to play AIRBUS assets at Montecarlo !!
3) "Upper ranks are being mopped up in the right places without much fanfare[/quote"
Again, if this is true, this would be a positive announcement, as showing that
they get rid of failing managers without caring which politician protects him!
So why this is anot announced ??

aminobwana
-


User currently offlineAminobwana From , joined Dec 1969, posts, RR:
Reply 22, posted (7 years 4 months 1 week 4 days 10 hours ago) and read 4436 times:

Quoting Aminobwana (Thread starter):
ConcordeBoy From United States, joined Feb 2001, 15367 posts, RR: 70
Reply 16, posted Sun Apr 15 2007 13:55:45 your local time (49 minutes 34 secs ago) and read 63 times:


Quoting Basefly (Reply 14):

That like saying that you doubt that the 787 will enter service, just because it havent done so yet.


Your comparison is utterly ridiculous.

Quoting Basefly (Reply 14):
The A380 WILL enter service this year, even if it mean that Airbus will install the seat from their cafeteria, they will get that whale flying this year, rest assure....!

....the same may have been surmised in 2006, after the first year's delay. As you don't see the future, nor the internal workings of Airbus production for that matter; you cannot with any such assuredness guarantee an EIS until it's actually occurred. End of story

I agree that the B787 comparison from Basefly is not objective. If he would have written this
3 years ago, then it would apply, but not knowm when the aircraft is nearly flying.

But even what you say is normal if referred to a normally working enterprise, as AIRBUS is
desperate. I agree here with Basefly !! I have already said the similar a few days ago when
posting a response regarding that they are already painting (!!!) this unit.

Fact is that Airbus has already admitted that wiring will not be the definitive.

In this posting I had already stated that I heard that SQ has accepted such strange
proceedings as a part of the negotiation where they got enormous direct and indirect
discounts for the already ordered A380 andfor the additional ones.
It was agreed that this unit SQNo.1 will be later returned to Germany or France to be
upgraded to specs.

Of course, this becomes handy for SQ too, as if the unit is not delivered in October,
their shareholder will begin to ask questions regarding their relation with AIRBUS !!

I am happy that colleage BASEFLY has the same opinion as I regarding the
negotiation methods of Mr. John Leahy !!

AMINOBWANA


User currently offlineNAV20 From Australia, joined Nov 2003, 9909 posts, RR: 36
Reply 23, posted (7 years 4 months 1 week 4 days 4 hours ago) and read 4372 times:

It's all too easy in business (particularly the 'slow-burning' aviation field) to confuse 'future prospects' with the day-to-day business

Quoting MEA-707 (Reply 11):
2007 HAS to generate more positive news then 2006, like a successful entry of service of the A-380

In cash flow terms the A380 will have a negative effect for several years to come. The first 90 or so that Airbus delivers will COST it money, not make it money. The scale of the adverse cash flow is worsening daily as the $US depreciates against all other currencies. In strict business terms, leaving 'prestige considerations' out of it, Airbus would be better off cancelling, or at least deferring, A380 deliveries.

Quoting MEA-707 (Reply 11):
and a major order for the A-350 (think of Emirates or Qatar confirming 60-ish,

A350 orders are irrelevant to Airbus' medium-term prospects as there can be no deliveries until 2014. The cash flow implications of the A350 programme are downright 'dire' as Airbus will have to find of the order of $E10B. (rather more than half of what the whole of EADS is worth) to develop the design. More mere orders will not improve that situation. However, it's interesting to note that Airbus only have a total of 11 firm orders for the A350XWB (and those from Finnair, a government-controlled airline); that doesn't look to me like a firm basis on which to commit E10B. in development costs.

Quoting MEA-707 (Reply 11):
Combined with a continued strong orderbook for the A-320 and A-330 that will mean the worst is over

Agreed on the A320 (117 orders so far this year); but, of course, the profit margin on single-aisles is very low (for Boeing as well). As regards widebodies, there is currently an order backlog of about 2.5 years for the A330/A340. But the A330 order situation cannot currently be described as 'strong'; Airbus have only sold six of them so far this year, and that was back in January.

Looking at all that (particularly the certainty of heavily-adverse cash flows for years to come) 'Power 8' looks a ridiculously-feeble response. Particularly since none of the governments concerned, and none of the unions, have yet agreed to any part of it.



"Once you have flown, you will walk the earth with your eyes turned skywards.." - Leonardo da Vinci
User currently offlineBaroque From Australia, joined Apr 2006, 15380 posts, RR: 59
Reply 24, posted (7 years 4 months 1 week 3 days 19 hours ago) and read 4348 times:

Quoting NAV20 (Reply 4):
Good question, Aminobwana!

Which crisis would that be?  Smile  Wow!
Is it the one of having delivered more planes in 2006 than ever before? The low dollar and the high Euro? Orders running at a higher rate than they can deliver for another year? Or perhaps, bearing in mind the current situation of Qantas, is it the problem of EADS having an ownership structure that effectively rules out a takeover by private equity while presumably its US rival remains vulnerable to such a takeover.
It is a worrying situation, I must agree.  Big grin


25 Post contains images Astuteman : Emotional and Inobjective comments?......... Yup. That pretty much puts the emotion and inobjectivity to bed............. (PS, do you mind if I sugge
26 Post contains images Basefly : You know what i mean.... Do you see the future?? If so next week´s lotto numbers please. Listen, they are painting it they are done fitting it.....
27 Post contains links NAV20 : Well - to put it as shortly as I can, Baroque, Boeing's widebodies are outselling Airbus's widebodies at a rate of ten to one so far this year (177 t
28 Baroque : How much would you care to invest that Airbus widebody orders at 31 Dec 2007 will be 4*17 or less? Also what is the underlying loss/profit? The 2007
29 Post contains links and images Manni : I suppose you mean Qatar Airways? A firm order for 80 A350XWB's would mean the biggest widebody order ever placed. BTW. How is their organisation str
30 Post contains images AutoThrust : Yes, i readed that to, on a german newspage.They are really searching more qualified people. Behind the scenes ranks are indeed changing quite fast.
31 Flysherwood : Really? WN has never bought an Airbus aircraft. When was the last time CO bought one? When was the last time BA bought an Airbus widebody? etc... It
32 Post contains images Flysherwood : How exactly do you exclude a $6 billion drain on the company's cash flow? You cannot take only the winning parts of Airbus and exclude the losses. Th
33 Astuteman : $6Bn cash drain is not necessarily the same as lost profit BTW, but in answer to your question, the way that Airbus are doing (and most other compani
34 Post contains images MaverickM11 : As long as the politicians are involved, it will never be "solved" but rather window dressed in the hopes that outside stimuli will make it better, in
35 Flysherwood : A $6 billion loss is still a loss no matter how you report it. And it is my understanding that Airbus plans to take the losses on the first few deliv
36 BigJKU : There are different concerns at work here though. For example if one were considering lending to this company they are going to list the A380 loss as
37 Prebennorholm : First of all the shareholders will during the next 2-3 years get a lower profit from their investment than they hoped for when they invested their mo
38 Post contains images Astuteman : Sorry, its not the same. The $6Bn change in cashflow results from cash coming into the business much later than planned, but much of that cash WILL c
39 Flysherwood : The fact that they are looking to cut 10000 jobs during one of the biggest booms in the aircraft industries history would counter your assertions. On
40 NAV20 : Baroque, we pretty well know the 'underlying' profit situation - that there isn't going to be one for the foreseeable future, Airbus will make a loss
41 Ken777 : Airbus clearly has challenges, but I believe that they will work through them over the next few years. If cash becomes a major crisis then I have no d
42 Byrdluvs747 : I believe if Boeing can introduce products in time to take advantage of Airbus' mesteps, they will. As I've said before, in business you're lucky if
43 MCIGuy : If the A350 turns out to be close to what they say it will be, that'll go a long way to pulling them out. I don't expect full recovery until the 2020'
44 Post contains images Baroque : I don't understand financial matters as well as you, but I suspect the A380 is both, that is it is a one off, but the other part about negative cash
45 Bongodog1964 : IMO the Airbus problems are as follows: Complacency through operating for a number of years in a "comfort zone"; whilst orders are flowing in and ever
46 Post contains links and images NAV20 : All 'spelled out' (in EADS-speak anyway) back last October, Baroque. Doesn't say so in so many words, but it suggests that A380 cash flow won't turn
47 Post contains links and images Keesje : With a backlog of over 2500, two record sales yrs behind and issues like how to ramp production faster the word crises is perhaps more an opinion the
48 ConcordeBoy : ...nope, I just have enough life experience to know better than to proclaim with any manner of assuredness a set and narrowed timeframe for a product
49 Post contains images Astuteman : Calling the rest of 2007 for a successful EIS of the A380 is a pretty broad definition of narrow........ Would a 2008 EIS for the 787 qualify as equa
50 Aminobwana : Aminobwana,re Dear Astuteman: Hear I am again !! Re; your response 33: Having experience in a leading position of an European multinational company I
51 Post contains links and images Basefly : Quoting ConcordeBoy (Reply 48): Sad that you, elder than I, do not. Well then my young paddawan, listen up. The reason that i am so sure is that as we
52 Ikramerica : That assumes a 2 year delay just cascades the product 2 years into the future. That's not true. The lifecycle of the A380 as a viable marketplace pro
53 Stitch : That assumes a 2 year delay just cascades the product 2 years into the future. Yet isn't that the case here? Deliveries have been pushed back two yea
54 Post contains images Astuteman : Out of interest, which planet are you currently on? It's beautifully sunny just now on ours - you should visit sometime Repeat after me - there is NO
55 Rheinbote : Unfortunately, the success of a PLC business is not determined by backlog figures, production rates, or the number of product innovations. The key in
56 Atmx2000 : The lifespan for the A388 has been shortened by two years, because sales will drop off as the operating performance is met or exceed by newer planes,
57 Flysherwood : What a great summarization. Not all businesses collapse simply because they are not selling anything. In fact, many businesses enter bankruptcy with
58 Post contains links Keesje : Also in these terms it is clear EADS is able to overcome big set back like the A380 delay and the compensations. Based on a strong commercial momentu
59 Stitch : Maybe. Maybe not. There will always be some missions the A388 can perform better (or period) then others. True, it's "moment in the sun" is now when
60 Revelation : I guess this, and the recent payoff to Forgeard, shows that there is no penalty for failure at Airbus...
61 Aminobwana : [ As a colleage states, a loss is a loss, however you book it. . I am not referring to the development costs of the A380, but to its overrun !! I am,
62 Post contains images NAV20 : As is usual on threads about Airbus, any attempts to discuss its problems rationally encounters numerous 'faith-based' statements that there really i
63 Post contains images Baroque : Good so far. However, during those 4 years, one might expect Leahy, despite his total lack of credibility in some quarters, might just get an order o
64 NAV20 : Baroque, please note that I said:- With respect, you're not taking account of the phenomenally-long 'lead-times' in the aviation industry. An order ta
65 Post contains images Baroque : I guess all I can say is that 3 months a trend do not make. You could be right. We had a similar argument this time last year but about 32xs. I suspe
66 Flysherwood : If Airbus can only count on A32x orders for its future, they might as well close now and save the Euro taxpayers a hell of a lot of money. You cannot
67 Baroque : Not me, not me. Nav was suggesting that widebody order had collapsed in 2007. I was just pointing out that the narrow body business was quite substan
68 Post contains images Flysherwood : If anyone really believes the costs that they are suggesting, I have some really nice beach front property in Kansas to sell...!
69 Baroque : Only if it is in Douglas County.
70 Post contains images NAV20 : Not 'suggesting,' mate, it HAS undeniably collapsed. Sure, it may recover later this year, but it needs to do it damn soon. And at good prices, too.
71 Post contains images Astuteman : No argument there. But a change in cash-flow is not a loss. It's a change in cashflow. Your "colleague" didn't know the difference either. No you're
72 Flysherwood : How about this in simple terms. You buy a house that you plan to rent out because someone has said that they are going to rent it from you tommorrow
73 Post contains images Keesje : Yes apparently and it is growing around here.
74 Stitch : Yet it looks to do just that at Paris, with upwards of 150 A350XWBs to be formally confirmed by QR, SU, and SQ. Plus all the A350 orders that could b
75 Post contains images GBan : Great post ! Generating revenues from rentals isn't exactly the same thing as generating revenues from sales - at least from a conceptual standpoint
76 Post contains images Astuteman : That's a poor example, sorry...... four times.. As G-ban pointed out, Airbus are selling, not renting, so the "rental" income lost in the first year
77 Post contains images Astuteman : That's a poor example, sorry...... four times.. As G-ban pointed out, Airbus are selling, not renting, so the "rental" income lost in the first year
78 Post contains images Astuteman : Shit!
79 Prebennorholm : Dear Flysherwood, your comparison is partly correct - and partly flawed. Remember, the A380 is in full swing for most practical things according to o
80 Post contains images Flysherwood : Maybe not, but hopefullly it isn't lost on you as well that a negative cash flow trend is a loss no matter how much you don't want to believe it to b
81 Post contains images Astuteman : That's not necessarily true, either. A company in a heavy investment period can easily have negative cashflow for a substantial period of time. If th
82 Post contains images Flysherwood : Is that what we are calling what Airbus got itself into with the delays and penalties now? A HEAVY investment period? You should go to work for Leahy
83 Post contains images Astuteman : It's presumably nearer than calling it renting a house....... Regards
84 Post contains images Flysherwood : Just trying to find someway to reach someone who doesn't know what a loss is when it is staring him in the face...
85 Post contains links and images NAV20 : The A350 is where there's a 'disconnect' for me, Stitch. I really don't see how the A350, whether or not Airbus get some orders, can materially contr
86 Stitch : Perhaps it will be the precursor to momentum. I do agree that Airbus needs to get cracking, in that once the 787 takes to the skies I expect another
87 NAV20 : That would be stunning if it occurs, Stitch. I suspect that a rate of sale like that would almost certainly convince Boeing to introduce a second 787
88 Post contains images Astuteman : Funny, that's exactly what I was doing Mind you - it seems like there's yet another person who doesn't know. Hang on - but I know this one does know,
89 Baroque : So pleased to learn that renting and selling are different, my tenuous grasp on reality was slipping a bit further. I think I have managed to learn t
90 Post contains images NAV20 : With respect, Baroque, that isn't a parallel with the Airbus situation - more like a right angle! Oil companies are in exactly the same position as a
91 Stitch : If the suppliers can feed it, I think Boeing could provide 240 787s a year on the current line starting around 2010, so that should be able to handle
92 NAV20 : Thanks for mentioning the 240, Stitch, I was thinking that 150 or so would probably be the limit on one line. Five aeroplanes a week rolling out - esp
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