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Revelation
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Re: Airbus CEO warns of significant impact from corruption probes

Sat Nov 04, 2017 11:17 am

FT: Knives out for Airbus’s Enders as compliance crisis mounts is pretty gossipy:

“People are asking themselves why they are in this position,” says Yvonnick Dréno, co-ordinator for the company’s largest French union, Force Ouvrière. “Five years ago [when Mr Enders was appointed chief executive] there were no clouds in the sky.”

Mr Enders’ methods have stirred up French paranoia about the reach of US regulators. He is not only demanding that internal documents be shared with foreign regulators, in the hope of winning reduced penalties, but he has appointed the Paris branch of a US law firm to conduct a review of compliance.

“There is a group of people who . . . believe that behind all this compliance is American economic imperialism,” said one of Mr Enders’ allies. “They are worried that once again the French government is unable to manage this.”

Mr Enders has now become a target for France’s powerful business and political elite. “The knives are out,” says one person who worked closely with the Airbus boss. “They have had enough of him.”

... but it ends with saying that the controversy is causing the Board to come together and support Enders.

It does slip in one tidbit:

Denis Ranque, the French chairman, is understood to have indicated to the French government that the board will seek a new chief executive from 2019, according to two people close to him.

So in the end, this episode may have cost Enders a chance to continue past 2019.

Reuters: Germany rebuffs speculation over Airbus CEO, structure also shows that Germany is not supporting any early ouster of Enders, but says:

Enders has come under increasing pressure over the conduct of an internal investigation that is being conducted in parallel with the external probes into sales practices launched by the UK and France.

Sources close to the company say repeated grillings have angered staff and alarmed French networks of influence abroad.

Supporters of Enders say there is no choice but to adapt to modern-day regulations and see the process through.

... which seems like a decent summary of the situation.

It even says "Berlin’s support is unlikely to sit well with Enders" which seems odd, but he really would prefer the government stay out of it totally.
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Re: Airbus CEO warns of significant impact from corruption probes

Fri Nov 10, 2017 1:34 pm

AvWeek: Intrigue Of Shakespearean Proportions Unfolds In Airbus’ Top Echelon: Airbus is beset by corruption probes, internal turmoil and ongoing production issues gives us a good overview of the "current climate":

Here is a quick recap of significant events this year that helped pave the way to the current climate. Former CEO of commercial aircraft, Fabrice Bregier, was stripped of that title; Group CEO Tom Enders claimed that role and its responsibilities for himself. The important sales division, headed by John Leahy, also reports to Enders as of earlier this year.

Over the past few weeks, other issues at Airbus began to surface. German magazine Der Spiegel published a series of articles about alleged systematic corruption and improper use of agents in past commercial aircraft sales campaigns. It asserted that Enders did not react quickly enough and questioned whether he can survive the scandal.

This was followed by a report in another publication, business daily Handelsblatt, that the French government is seeking to gain back control of Airbus, in part by appointing new board members and revamping the governance that was introduced in 2013. At that time, both Germany and France reduced their stakes in what was then EADS and essentially relinquished direct influence on running the company.

And finally, the latest reports contend that Bregier, in an effort to regain his CEO position, is behind a campaign to get Enders fired.

The last part, the latest reports contend that Bregier, in an effort to regain his CEO position, is behind a campaign to get Enders fired, is news to me.

Does anyone have any details on that?

It does seem to me that Enders is setting up Bregier to take the fall for the A320neo delivery problems, even though it really is a PW problem, and it would be natural for Bregier to retaliate.
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Re: Airbus CEO warns of significant impact from corruption probes

Fri Nov 10, 2017 1:46 pm

Revelation wrote:
It does seem to me that Enders is setting up Bregier to take the fall for the A320neo delivery problems, even though it really is a PW problem, and it would be natural for Bregier to retaliate.


Hold on a minute.

While the engine issues are P&W related, Airbus itself needs to hold a close grip on their suppliers.
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Re: Airbus CEO warns of significant impact from corruption probes

Fri Nov 10, 2017 4:02 pm

KarelXWB wrote:
Revelation wrote:
It does seem to me that Enders is setting up Bregier to take the fall for the A320neo delivery problems, even though it really is a PW problem, and it would be natural for Bregier to retaliate.


Hold on a minute.

While the engine issues are P&W related, Airbus itself needs to hold a close grip on their suppliers.

Yes, to the customers, Airbus needs to take responsibility for the entire product, but internally Bregier really doesn't have resources under his command to resolve issues with PW's bearing seals, combuster linings, etc. Perhaps he has some expertise to lend, but quite often vendors see such 'help' as counter-productive. In the end it is PW's problem(s) to resolve. The only real problem for Bregier would be if he knew of problems and hid them from his bosses, and we have no evidence of that.
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Re: Airbus CEO warns of significant impact from corruption probes

Fri Nov 10, 2017 4:24 pm

That article written by a seasoned industry journalist like Jens flottau actually debunks most of the hyperventilating from the general media. IMHO Airbus will probably pay a big fine and Enders may not get another term beyond 2019.... End of story.
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Re: Airbus CEO warns of significant impact from corruption probes

Fri Nov 10, 2017 5:39 pm

Airbus beset by corruption probes, internal turmoil and ongoing production issues are becoming messy.


Intrigue Of Shakespearean Proportions Unfolds In Airbus’ Top Echelon
http://aviationweek.com/commercial-avia ... op-echelon
 
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Re: Airbus CEO warns of significant impact from corruption probes

Sat Nov 11, 2017 1:34 pm

Let me add a "French touch" to the UK/US sources discussed here.

"AIRBUS NAVIGATE IN JUDICIAL FOG"
https://www.lesechos.fr/industrie-services/air-defense/030757927435-airbus-navigue-dans-le-brouillard-judiciaire-2124711.php

The French equivalent of the Financial Times, "Les Echos" - professional & usually very well informed, has a long story with a lot of information I did not see mentionned on this thread. You may want to run it through Translate to get the gist out of Google's pidgin, but here are the points that stood out for me :

1. Enders, "who started as a Parliament assistant" ( did you know ? I didn't ) is collaborating fully for as a German, he is very well aware how Siemens, Deutsche Bank & Volkswagen were been heavily fined recently. So it's not just RR or the EU, Germany may want to investigate too.
2. Enders is also convinced the US could use this against Airbus : Siemens was fined USD 800 million by the USA.
3. Airbus remain essentially a French company in that 17.000 people work in Germany & 54.000 in France > 75% of the work force ( in commercial aircrafts I suppose, for the group has 134 000 employees )
4. Airbus shares valuation have triplicated since 2013 to 81€
5. The whole shebang started out because a chinese middleman, Dilsat Atus ( sounds Uighour/turkic to me ), threatened to sue Airbus if he was not paid the heavy commission linked to 150 frames sold to China. Problem for Airbus, there is no trace of him anywhere, in total violation with EU regulations for export credits.
6. If found guilty, it is a "death sentence" for Airbus, because other than the fine,
IMPORTANT : they would be prevented from any public market for 5 years.
7. thus "150 million" files screened by Airbus ( an hour only has 3600 seconds, so that is a LOT of diverted manwork diverted from other chores )
8. 80% for deals are without middlemen, so leaves 20%to screen for any suscpicious deals.
9. SMO : the distmantling of the "shit castle" ordered by Enders meant that all deals were frozen or put on hold until they could be cleared :
IMPORTANT : explains this year's huge & noted discrepancy in sales with Boeing's, when Airbus had systematically out-performed them in years past.
10. Airbus are also weary that, in case of a lawsuit in the US, investigators funnel sensitive data out to Boeing.
11. Article ends with a nice video summary ( in French )
 
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Re: Airbus CEO warns of significant impact from corruption probes

Sat Nov 11, 2017 1:58 pm

Thanks again DWC for giving us a view of how things are portrayed in the French media.

DWC wrote:
5. The whole shebang started out because a chinese middleman, Dilsat Atus ( sounds Uighour/turkic to me ), threatened to sue Airbus if he was not paid the heavy commission linked to 150 frames sold to China. Problem for Airbus, there is no trace of him anywhere, in total violation with EU regulations for export credits.

Interesting. That deal was mentioned in Der Spiegel's "Bullshit Castle" story. Most people read that article and thought the main problems were with Airbus Military, perhaps because that's what Enders background is, but it mentioned a lot of problems for Airbus Commercial too.

DWC wrote:
6. If found guilty, it is a "death sentence" for Airbus, because other than the fine,
IMPORTANT : they would be prevented from any public market for 5 years.

Yes, this is why the others (RR, VW, etc) were so willing to pay the fines. It also makes it easy for the prosecutors too. They present the "bill", they get a lot of good press for being vigilant (long after the time the crimes were committed!), the bill gets paid, and life goes on.

DWC wrote:
9. SMO : the distmantling of the "shit castle" ordered by Enders meant that all deals were frozen or put on hold until they could be cleared :
IMPORTANT : explains this year's huge & noted discrepancy in sales with Boeing's, when Airbus had systematically out-performed them in years past.

Interesting. That must piss off the sales force. I imagine this impacts their income either directly or indirectly.

DWC wrote:
10. Airbus are also weary that, in case of a lawsuit in the US, investigators funnel sensitive data out to Boeing.

That sounds like conjecture rather than fact. Personally I hope it's just a touch of paranoia, and not fact.
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Re: Airbus CEO warns of significant impact from corruption probes

Sat Nov 11, 2017 2:07 pm

Revelation wrote:
DWC wrote:
10. Airbus are also weary that, in case of a lawsuit in the US, investigators funnel sensitive data out to Boeing.

That sounds like conjecture rather than fact. Personally I hope it's just a touch of paranoia, and not fact.

Take it for a fact, it works both ways, I still remember how Airbus were privy & savvy on all the specs & problems of the 787...
Industrial espionnage, or should we say intel, is everywhere & has only fine-tuned since the TU-144 :rotfl:
Information symmetry is part of Game Theory too.
 
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Re: Airbus CEO warns of significant impact from corruption probes

Sat Nov 11, 2017 2:24 pm

DWC wrote:
Revelation wrote:
DWC wrote:
10. Airbus are also weary that, in case of a lawsuit in the US, investigators funnel sensitive data out to Boeing.

That sounds like conjecture rather than fact. Personally I hope it's just a touch of paranoia, and not fact.

Take it for a fact, it works both ways, I still remember how Airbus were privy & savvy on all the specs & problems of the 787...
Industrial espionnage, or should we say intel, is everywhere & has only fine-tuned since the TU-144 :rotfl:
Information symmetry is part of Game Theory too.

True, the infamous "Airbus Dossier" ( http://www.planebusiness.com/buzz/airbus2.pdf ) was quite eye opening, but my conjecture was the source of the info was indeed some industrial espionage and conduits such as shared vendors. Personally I hope the legal system is not another conduit. In the US, lawyers can be disbarred for sharing such info, but of course it's very hard for them to get caught and one lawyer hates to prosecute another lawyer, so who knows?
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Re: Airbus CEO warns of significant impact from corruption probes

Sun Nov 12, 2017 1:35 pm

DWC wrote:
8. 80% for deals are without middlemen, so leaves 20%to screen for any suscpicious deals.


And yet Airbus is missing hundreds of orders this year. If only 20% uses middlemen, where are the rest of the aircraft orders?
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Re: Airbus CEO warns of significant impact from corruption probes

Sun Nov 12, 2017 1:53 pm

KarelXWB wrote:
DWC wrote:
8. 80% for deals are without middlemen, so leaves 20%to screen for any suscpicious deals.


And yet Airbus is missing hundreds of orders this year. If only 20% uses middlemen, where are the rest of the aircraft orders?

Is it possible that current production issues are dampening things too? We can't blame EVERYTHING on bribery, right?
 
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Re: Airbus CEO warns of significant impact from corruption probes

Sun Nov 12, 2017 2:01 pm

KarelXWB wrote:
DWC wrote:
8. 80% for deals are without middlemen, so leaves 20%to screen for any suscpicious deals.

And yet Airbus is missing hundreds of orders this year. If only 20% uses middlemen, where are the rest of the aircraft orders?

Correct.
I suspect it is due to the next point ;

DWC wrote:
9. SMO : the distmantling of the "shit castle" ordered by Enders meant that all deals were frozen or put on hold until they could be cleared :
IMPORTANT : explains this year's huge & noted discrepancy in sales with Boeing's, when Airbus had systematically out-performed them in years past.

Also means less new campaigns, not just the ones already opened.
Sales team disbanded or stranded, I don't know.
The Sales & Marketing Office (SMO) was always credited for Airbus becoming what it is.
JL is only the visible salesman, just the top of the tip of the iceberg. Sales campaigns have way more people involved than meet the eye.
 
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Re: Airbus CEO warns of significant impact from corruption probes

Sun Nov 12, 2017 5:03 pm

DWC wrote:
Revelation wrote:
DWC wrote:
10. Airbus are also weary that, in case of a lawsuit in the US, investigators funnel sensitive data out to Boeing.

That sounds like conjecture rather than fact. Personally I hope it's just a touch of paranoia, and not fact.

Take it for a fact, it works both ways, I still remember how Airbus were privy & savvy on all the specs & problems of the 787...
Industrial espionnage, or should we say intel, is everywhere & has only fine-tuned since the TU-144 :rotfl:
Information symmetry is part of Game Theory too.


Thats why it cracks me up reading the posts on Boeing's MOM. Corporate espionage, Airbus has a good idea of what a 797 could be and numbers, and Boeing has a good idea of what a A321 plus would be to compete against.
 
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Re: Airbus CEO warns of significant impact from corruption probes

Sun Nov 12, 2017 5:31 pm

william wrote:
DWC wrote:
Revelation wrote:
That sounds like conjecture rather than fact. Personally I hope it's just a touch of paranoia, and not fact.

Take it for a fact, it works both ways, I still remember how Airbus were privy & savvy on all the specs & problems of the 787...
Industrial espionnage, or should we say intel, is everywhere & has only fine-tuned since the TU-144 :rotfl:
Information symmetry is part of Game Theory too.


Thats why it cracks me up reading the posts on Boeing's MOM. Corporate espionage, Airbus has a good idea of what a 797 could be and numbers, and Boeing has a good idea of what a A321 plus would be to compete against.


Yes and so we are back to the Game Theory principles I am trying to present to the discussions here.
Because now, more than before, any major decision has well calculated & anticipated cascading effects by both OEMs.

Usually in a duopoly, the first to draw stands the most chances of loosing out to the second, because the second is enjoying higher returns & a rent situation that do not compell to draw first. Case in point, the A380 : Airbus drew first through massive investments to comfront Boeing which were very comfortably intalled in the WB market reaping hefty returns on their 744s, 777s, busy boot-strapping that with the 787 ( and the 767 to a lesser extent ).

Unless player 1 has an outstanding product & commands all stages in the game : the A320neo not only secured Airbus' dominance with NBs, but also forced Boeing into 2 less optimal decisions ( at the very least ) :
1. the Max they wished to avoid : launched a full year after the Neo & the Max10 only this year . both suggest they were not prepared for the scenario & Airbus took them out by storm ;
2. that alone is a masterstroke as it siphoned Boeing human & financial ressources into a less tech-advanced airframe, instead of investing in the NSA & MoM, now displaced into the future by a good decade, all while Airbus continues to enjoy their rent & much higher sales for a minimum of the cost to Boeing ( MDD comes to mind )
3. The CSeries only adds to Boeing's woes, as it allows Airbus to frame Boeing for 1$ on both sides of the 737Max line-up, with a new top-notch optimized small NB family & free at the same time the way for a A320.5 & A322.
Perhaps Boeing know next to nothing in Game Theory... Or of sound long term strategy for their NB : their current NB strategic situation is just appalling to me : their hands are tied for a long moment still & as william says, both know it. Specially JL, who likes to wave hellos to "the friends up in Seattle"...
 
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Re: Airbus CEO warns of significant impact from corruption probes

Sun Nov 12, 2017 6:00 pm

KarelXWB wrote:
DWC wrote:
8. 80% for deals are without middlemen, so leaves 20%to screen for any suscpicious deals.


And yet Airbus is missing hundreds of orders this year. If only 20% uses middlemen, where are the rest of the aircraft orders?


THIS......Awesome sales campaigns, major market blows to a competitor occurred during the fraud time table. The illegal activity comes under scrutiny and the winds change drastically sales wise.
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Re: Airbus CEO warns of significant impact from corruption probes

Sun Nov 12, 2017 6:16 pm

DWC wrote:
Perhaps Boeing know next to nothing in Game Theory... Or of sound long term strategy for their NB : their current NB strategic situation is just appalling to me : their hands are tied for a long moment still & as william says, both know it.

I was thinking of you when I read the words of Boeing's CEO:

We spend an awful lot of time in our position looking at the chess board of moves in the market. I’m very comfortable with where we sit today,” he said. “There is no change in our strategy as a result of this. I say ‘game on.’

Ref: https://www.bloomberg.com/news/articles ... ew-797-jet

DWC wrote:
Specially JL, who likes to wave hellos to "the friends up in Seattle"...

And will be waiving goodbye in two or three more months, sigh. I'll miss JL's snarky comments.
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Re: Airbus CEO warns of significant impact from corruption probes

Sun Nov 12, 2017 7:15 pm

Revelation wrote:
DWC wrote:
Perhaps Boeing know next to nothing in Game Theory... Or of sound long term strategy for their NB : their current NB strategic situation is just appalling to me : their hands are tied for a long moment still & as william says, both know it.

I was thinking of you when I read the words of Boeing's CEO:

We spend an awful lot of time in our position looking at the chess board of moves in the market. I’m very comfortable with where we sit today,” he said. “There is no change in our strategy as a result of this. I say ‘game on.’

Ref: https://www.bloomberg.com/news/articles ... ew-797-jet


Haha, EXCELLENT ! Thank you for sharing.
Of course, Boeing's CEO would know better. Financially, he is right, minimizing spending, maximizing profits.
But short-term thinking & specifically I find Boeing has let remarkable leeway to Airbus.
Strategically, for all the reasons I stated elsewhere, I find Airbus M-LT positions far stronger than Boeing's.

But strategically as well, Airbus have put themselves in a *hole, must have been HUGE for Enders to kick into the SMO...
Means Enders is playing LT to secure Airbus' LT future regardless of the costs to sales now : it is a matter of survival.
 
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Re: Airbus CEO warns of significant impact from corruption probes

Sun Nov 12, 2017 8:26 pm

CX747 wrote:
KarelXWB wrote:
DWC wrote:
8. 80% for deals are without middlemen, so leaves 20%to screen for any suscpicious deals.


And yet Airbus is missing hundreds of orders this year. If only 20% uses middlemen, where are the rest of the aircraft orders?


THIS......Awesome sales campaigns, major market blows to a competitor occurred during the fraud time table. The illegal activity comes under scrutiny and the winds change drastically sales wise.

As I understand it, they have to put all contracts (and salespersons) under scrutiny, so this slows down the completely aboveboard deals too.
 
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Re: Airbus CEO warns of significant impact from corruption probes

Sun Nov 12, 2017 8:29 pm

sharles wrote:
As I understand it, they have to put all contracts (and salespersons) under scrutiny, so this slows down the completely aboveboard deals too.


In that case, as only 20% uses middleman, a massive order intake should be expected at some point in the future?
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Re: Airbus CEO warns of significant impact from corruption probes

Mon Nov 13, 2017 4:58 am

DWC wrote:
Let me add a "French touch" to the UK/US sources discussed here.

"AIRBUS NAVIGATE IN JUDICIAL FOG"
https://www.lesechos.fr/industrie-services/air-defense/030757927435-airbus-navigue-dans-le-brouillard-judiciaire-2124711.php

The French equivalent of the Financial Times, "Les Echos" - professional & usually very well informed, has a long story with a lot of information I did not see mentionned on this thread. You may want to run it through Translate to get the gist out of Google's pidgin, but here are the points that stood out for me :

1. Enders, "who started as a Parliament assistant" ( did you know ? I didn't ) is collaborating fully for as a German, he is very well aware how Siemens, Deutsche Bank & Volkswagen were been heavily fined recently. So it's not just RR or the EU, Germany may want to investigate too.
2. Enders is also convinced the US could use this against Airbus : Siemens was fined USD 800 million by the USA.
3. Airbus remain essentially a French company in that 17.000 people work in Germany & 54.000 in France > 75% of the work force ( in commercial aircrafts I suppose, for the group has 134 000 employees )
4. Airbus shares valuation have triplicated since 2013 to 81€
5. The whole shebang started out because a chinese middleman, Dilsat Atus ( sounds Uighour/turkic to me ), threatened to sue Airbus if he was not paid the heavy commission linked to 150 frames sold to China. Problem for Airbus, there is no trace of him anywhere, in total violation with EU regulations for export credits.
6. If found guilty, it is a "death sentence" for Airbus, because other than the fine,
IMPORTANT : they would be prevented from any public market for 5 years.
7. thus "150 million" files screened by Airbus ( an hour only has 3600 seconds, so that is a LOT of diverted manwork diverted from other chores )
8. 80% for deals are without middlemen, so leaves 20%to screen for any suscpicious deals.
9. SMO : the distmantling of the "shit castle" ordered by Enders meant that all deals were frozen or put on hold until they could be cleared :
IMPORTANT : explains this year's huge & noted discrepancy in sales with Boeing's, when Airbus had systematically out-performed them in years past.
10. Airbus are also weary that, in case of a lawsuit in the US, investigators funnel sensitive data out to Boeing.
11. Article ends with a nice video summary ( in French )


Thanks DWC. I thought I could supplement your great summary with a couple more bullets:

1. In France Airbus dossier has the attention at the highest level of government (safe to assume Macron)
2. German are worried about employment potential impact to Bavaria region and Hamburg but fully cooperating with authorities
3. Les Échos estimate billions in fines depending on depth of investigation by either UK SFO or French PNF (finance division of prosecutor office)
4. Enders believed full cooperation could go along away and proactively disclosed irregularities. Hired 3 law firms: Hughes Hubbard & Reed, Clifford Chance, Hogan Lovells.
5. Michel Sapin former French finance minister comments that Airbus is taking the right steps because they should be prepared to pay up to get the investigations behind them quickly. He authored the new anti bribery/corruption law
6. The internal investigation concluded with more than 150 million dossiers scanned and inventoried (not sure if its files or pages, huge difference) many employees interviewed.
7. US firm was hired to collect electronic data from computer and mobile phones of employees linked with high risk sales. A legal hold is in place to prevent data spoliation
8. UK SFO has assigned 15 dedicated personnel to the investigation
9. French Finance prosecutor office has activated Sapin II law for the first time. The law was enacted in 2016 IIRC
10. Airbus hoping for a DPA with UK
11. New French Sapin II fines could go up to 30% of average revenues of last 3 years. However the law limits fine proportionally to the gains from alleged misconduct
12. Airbus hoped working with UK SFO they could avoid US DOJ involvement because of double jeopardy rule. DOJ refused to comment
 
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Re: Airbus CEO warns of significant impact from corruption probes

Mon Nov 13, 2017 8:04 am

Are we to assume that the EK A380 order did not materialize because of this investigation? Or that the B787 deal was announced as a "slap" in the face to Airbus for past mis-deeds?

I'm not paranoid, it's just me! :shock:
 
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Re: Airbus CEO warns of significant impact from corruption probes

Mon Nov 13, 2017 8:38 am

I would not under estimate the importance of loan support (not money directly but various ways of reducing loan risk by various forms of Govt guarantee) that the French and British Govt's have withdrawn as the result of the scandal.

Also it seems incredible to me that there is criticism of Enders for essentially doing the right thing.

Also imo, the fundamental, underlying factor which is holding Airbus back is the 11% share that France and Germany each have. You can see the tensions at a national level and this must get transferred to board level. Let Enders and co run the business as an entity, completely free of Govt interference at Board level.

Ruscoe
 
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Re: Airbus CEO warns of significant impact from corruption probes

Mon Nov 13, 2017 12:56 pm

Revelation wrote:
We should be supporting people like Enders who are trying to clean things up.


Ruscoe wrote:
Also it seems incredible to me that there is criticism of Enders for essentially doing the right thing.


It's important to understand that people don't always like change. Whether it is right or wrong is irrelevant to them.
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Re: Airbus CEO warns of significant impact from corruption probes

Mon Nov 13, 2017 2:27 pm

How can France and Germany do an independent investigation given that they are owners of EADS?
 
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Re: Airbus CEO warns of significant impact from corruption probes

Mon Nov 13, 2017 5:30 pm

Planeflyer wrote:
How can France and Germany do an independent investigation given that they are owners of EADS?

Airbus Capital structure:
Others(Free float) - 73.6%
GZBV holding (Germany) - 11.1%
SOGEPA holding (France) - 11.1%
SEPI holding (Spain) - 4.2%
 
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Re: Airbus CEO warns of significant impact from corruption probes

Mon Nov 13, 2017 8:07 pm

Revelation wrote:
We should be supporting people like Enders who are trying to clean things up.

Planeflyer wrote:
How can France and Germany do an independent investigation given that they are owners of EADS?

France & Germany are sovereign states ( even if European law is mandatory & supercedes national law in case of conflict )
EADS (2000-2014) exist no more, since then it has been Airbus NV, then Airbus SE & now "Airbus" since Jan 2017.

I think Enders knows exactly what he is doing, I mentionned earlier he started out as a Parliament assistant & this means he knows all the tenets of the German & EU public systems, which do not joke anymore than the US legal system. Airbus legal woes are very serious.

The more I dig into this through the media, the more I sense how far-reaching Ender's public warning is.
Brégier must understand this also to echo his boss after having been scrapped of his title as Commercial Aircrafts CEO.
In practical terms, unless solved very fast - unlikely, Airbus' 2017 sales will be in the dolldrums far behind Boeing's.
And John Leahy must be seething inside to finish his skyrocket career on this...
 
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Re: Airbus CEO warns of significant impact from corruption probes

Mon Nov 13, 2017 10:32 pm

Ok, hopefully a thorough investigation but I’m thinking more like a small fine and move on, nothing to see here. Sorry if I sound the cynic but Europe has invested a ton into AB/eads.

Afterall, most of the damage was probably done outside of Europe.
 
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Re: Airbus CEO warns of significant impact from corruption probes

Tue Nov 28, 2017 2:40 pm

https://uk.reuters.com/article/uk-airbu ... KKBN1DS0Y9? tells us that Airbus’ offices were raided last week as part of an ongoing probe centred on the sale of satellites to Kazakhstan in 2010, and this is confirmed by Airbus. Seems this is a path the investigation is taking.
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Re: Airbus CEO warns of significant impact from corruption probes

Tue Nov 28, 2017 2:52 pm

DWC wrote:
Usually in a duopoly, the first to draw stands the most chances of loosing out to the second, because the second is enjoying higher returns & a rent situation that do not compell to draw first. Case in point, the A380 : Airbus drew first through massive investments to comfront Boeing which were very comfortably intalled in the WB market reaping hefty returns on their 744s, 777s, busy boot-strapping that with the 787 ( and the 767 to a lesser extent ).


Surely that means Boeing "drew first", given they had the 747 out long before the A380?
 
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Re: Airbus CEO warns of significant impact from corruption probes

Tue Nov 28, 2017 3:21 pm

Amiga500 wrote:
DWC wrote:
Usually in a duopoly, the first to draw stands the most chances of loosing out to the second, because the second is enjoying higher returns & a rent situation that do not compell to draw first. Case in point, the A380 : Airbus drew first through massive investments to comfront Boeing which were very comfortably intalled in the WB market reaping hefty returns on their 744s, 777s, busy boot-strapping that with the 787 ( and the 767 to a lesser extent ).


Surely that means Boeing "drew first", given they had the 747 out long before the A380?

Yes, except that the 747 created a new market to itself, Boeing did draw first, but not into an established monopoly.
They created the VLA monopoly.
But you would be absolutely right further back in history : the 707 was such an investment ( yet linked to a military contract ) to confront Douglas & Lockheed which had a well-established presence in commercial aircrafts, to say nothing of the British Comet or Sud-Aviation's Caravelle ( or even the Soviets ).
 
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Re: Airbus CEO warns of significant impact from corruption probes

Tue Nov 28, 2017 3:29 pm

Ah, so you just mean that if anyone has an established market lead position (over a significant number of years), any competitor that tries to muscle their way in is very vulnerable to a response from that original market leader? (and this would become more pronounced the higher the bar to entry for that market)
 
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Re: Airbus CEO warns of significant impact from corruption probes

Tue Nov 28, 2017 4:07 pm

LockheedBBD wrote:
For Boeing, I would say that any corruption would probably more political/government related (tanker dispute) and contained within the US rather than something international.


For the US the bribe to foreign dignitaries usually comes by presidential order. In a way legalized corruption.
This can be in the carrot or stick form. Or a well rounded combi of both.

Enders recently requested "more EU political help" "just like the US gov. provides".
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Re: Airbus CEO warns of significant impact from corruption probes

Tue Nov 28, 2017 4:28 pm

Amiga500 wrote:
Ah, so you just mean that if anyone has an established market lead position (over a significant number of years), any competitor that tries to muscle their way in is very vulnerable to a response from that original market leader? (and this would become more pronounced the higher the bar to entry for that market)

Vulnerable only of the new threat is credible, 10% better & with a long lifetime.
Agfa lost out to the new entrant Japanese camera makers.
US car manufacturers lost half their market share ( and much more in volume ) to new entrant Japanese automakers.
Motorola, Nokia, Palm, Blackberries, Sony-Ericsson have all lost to new entrant iPhone, Huawei & Samsung smartphones.
Lockheed & Douglas lost out to new entrant Boeing.
Russian aircraft manufacturers lost to new entrant ( in their markets ) Airbus & Boeing.
Currently Boeing are loosing to Airbus in the small NB ( C-series ) & NB (A320-1) markets.
The A380 effectively killed the 744 & 748, but Boeing had the 777 already cannibalizing the 744, the 77W effectively replaced the remaining 744.
So yes, no one is safe from more efficient new entrants.
One notable exception : the Russians still use 50 years old tech space launchers, full speed taylorism.
 
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Re: Airbus CEO warns of significant impact from corruption probes

Tue Nov 28, 2017 5:00 pm

DWC wrote:
One notable exception : the Russians still use 50 years old tech space launchers, full speed taylorism.


Agfa, Kodac(,Polaroid?).. ( primitive cameras but there to sell photo material ) like US car makers ( pimped 1930 tech updated with bling of the season) never had viable ( in global scope ) products.

Japanese manufacturers displaced the high end German (West,East) optics/photo manufacturers to some part.

Soyuz is an example where progress in continuous infinitesimal small steps proves successful.
No flashy PR and pushy capitalist competitiveness can best a good and very reliable product.
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Re: Airbus CEO warns of significant impact from corruption probes

Wed Nov 29, 2017 2:13 pm

WIederling wrote:
DWC wrote:
One notable exception : the Russians still use 50 years old tech space launchers, full speed taylorism.


Agfa, Kodac(,Polaroid?).. ( primitive cameras but there to sell photo material ) like US car makers ( pimped 1930 tech updated with bling of the season) never had viable ( in global scope ) products.

Japanese manufacturers displaced the high end German (West,East) optics/photo manufacturers to some part.

Soyuz is an example where progress in continuous infinitesimal small steps proves successful.
No flashy PR and pushy capitalist competitiveness can best a good and very reliable product.


Soyuz tech was famously a pencil where NASA was developing hi-tech ballpoint pens which could write in a vacuum or underwater...
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Re: Airbus CEO warns of significant impact from corruption probes

Wed Nov 29, 2017 2:37 pm

SomebodyInTLS wrote:
Soyuz tech was famously a pencil where NASA was developing hi-tech ballpoint pens which could write in a vacuum or underwater...

There's a bit more to the story:

Both U.S. astronauts and Soviet cosmonauts initially used pencils on space flights, but those writing instruments were not ideal: pencil tips can flake and break off, and having such objects floating around space capsules in near-zero gravity posed a potential harm to astronauts and equipment. (As well, after the fatal Apollo 1 fire in 1967, NASA was anxious to avoid having astronauts carry flammable objects such as pencils onboard with them.)

When the solution of providing astronauts with a ballpoint pen that would work under weightless conditions and extreme temperatures came about, though, it wasn’t because NASA had thrown hundreds of thousands of dollars (inflated to $12 billion in the latest iterations of this tale) in research and development money at the problem. The “space pen” that has since become famous through its use by astronauts was developed independently by Paul C. Fisher of the Fisher Pen Co., who spent his own money on the project and, once he perfected his AG-7 “Anti-Gravity” Space Pen, offered it to NASA. After that agency tested and approved the pen’s suitability for use in space flights, they purchased a number of the instruments from Fisher for a modest price.


So in summary, there's good reasons to avoid pencils in space, NASA spent a lot (but not as much as reported) to try to solve the problem, but in the end an independent entity designed the pen used in space and sold it to NASA for a modest price.

Ref: https://www.snopes.com/business/genius/spacepen.asp
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Re: Airbus CEO warns of significant impact from corruption probes

Mon Dec 04, 2017 3:29 pm

A Google Translate of https://www.ladepeche.fr/article/2017/1 ... table.html tells us, if I understand it, that Airbus has hired a headhunter to find replacements for both Enders and Brégier, but the chairman of the board explains this as a normal review of succession plans:

According to press reports, Airbus' board of directors has appointed an American headhunter to find a successor to the boss of Airbus.The research would extend even to his right arm, the French Fabrice [b]Brégier[/b] . If the mandate of Tom Enders runs until March 2019, it could be challenged by a possible indictment for bribery in markets relating to the sale of civil aircraft through intermediaries. Justice suspects the existence of illegal retrocommissions in its sales (read page 3) . «The boardplays its role: it anticipates a possible problem by trying to find a solution ", tempers a relative of the file. It prevents. The simple fact that this head hunting has leaked is symptomatic of the climate. "Some have any interest in discrediting the head of Airbus by passing this type of information, while the directors are held incommunicado," says a senior executive of Airbus. Denis Ranque, the chairman of the board, has tempered by ensuring that the board leads each year "a review of succession" in order to find potential successors to the leaders of Airbus.

Another report ( https://www.ladepeche.fr/article/2017/1 ... ation.html ) from the same source points out there is a lot of Airbus leaders due for retirement:

If the change of president of Airbus was to intervene, it would be at the worst moment for the European aerospace group. Airbus is experiencing a new "natural" renewal of its top management. Commercial director John Leahy will retire in early 2018 after passing the torch to Frenchman Eric Schulz freshly debauched from Rolls Royce. But other top management heavyweights are on the starting line.

American Paul Eremenko, technical director, slammed the door last week while Charles Champion, head of engineering, must leave the company by the end of the year because of retirement. Same fate for Tom Williams, the director of operations and for the French Didier Evrard, program director who oversees the entire Airbus range

In another article I read the person in charge of interfacing with EK has already retired.

We also read in https://www.ladepeche.fr/article/2017/1 ... anger.html :

The press revealed that Tom Enders had been heard in October as a witness by the anti-corruption police of the Oclciff at the request, judges of instruction of the financial center of Paris in the investigation on "Kazakhgate". A few days later, on Thursday, November 21, a search in the same case took place in the offices of Airbus in Suresnes near Paris. "Administrators are looking for a quick fix," says a source. Yet no later than October 12, these same directors "unanimously" Tom Enders in office. A unionist cowardly however: "They support Enders as the rope supports the hanged man!" The risk would be a cleanup like Rolls Royce has experienced a few months ago following a similar corruption scandal. The British aerospace engine pleaded guilty and negotiated to pay a global fine of 764 million euros to the US, Brazilian and British authorities to extinguish the lawsuits. In the process, the whole direction of Rolls Royce was disembarked.

For Airbus, the financial consequences would be much heavier since estimates are estimated at one to three billion dollars. The industrial consequences could be much worse. A possible "wipe out" operation, as feared by a British Airbus executive, would destabilize the entire industry. For beyond Tom Enders and Fabrice Bregier other major bosses would be threatened in the wake: Guillaume Faury, head of Airbus Helicopters, a subsidiary involved in the Kazakhgate and Harald Wilhelm, the group's financial director. In the process, some also predict an early exit of Thierry Baril, HRD and Marc Fontaine, director of digital transformation and "Brégier boy".


So in this series of articles all published today, this media outlet is openly speculating on the future of a very large number of Airbus leaders.

Seems to be an awful lot of speculation in a short period of time.

Makes me wonder how credible this source is, or if this kind of speculation is normal for the French media.

Maybe some of our a.net members can fill us in.
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Re: Airbus CEO warns of significant impact from corruption probes

Mon Dec 04, 2017 4:05 pm

So much speculation is not normal for this kind of media.
On the opposite, La Depeche du Midi is a regional newspaper in south of France, mainly around Toulouse. Generally well informed about what's going on in Airbus and aerospace activities.
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Re: Airbus CEO warns of significant impact from corruption probes

Mon Dec 04, 2017 4:19 pm

Certainly true that a lot of the old guard will be leaving within a year. I've heard speculation that that will ring in some positive changes...
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Re: Airbus CEO warns of significant impact from corruption probes

Wed Dec 13, 2017 1:58 pm

SomebodyInTLS wrote:
Certainly true that a lot of the old guard will be leaving within a year. I've heard speculation that that will ring in some positive changes...

It seems that now Enders has given up on keeping his job past April 2019:

Airbus SE faces the prospect of having to find a new leader after Chief Executive Officer Tom Enders reportedly decided not to stand for a third term, sparking a leadership contest just as the planemaker grapples with a bribery probe and slack demand for its biggest airliner.

Enders won’t renew his mandate when it expires in May 2019, French newspaper Le Figaro reported, without saying where it got the information. The company board will endorse his decision at a meeting on Thursday and formalize his move early next year, the newspaper said.

Ref: https://www.bloomberg.com/news/articles ... xit-report

A google translate of http://www.lefigaro.fr/societes/2017/12 ... airbus.php gives us:

"Tom informed the Elysee very recently that he would not seek a third term," says one source. Directors plan to formalize this departure in February 2018

And in turn, the attention now turns to Bregier:

That in turn has raised speculation whether his deputy and long-time internal rival Fabrice Bregier will ride out the storm and fulfill a long-held ambition to succeed Enders.

Only a handful of people expect Bregier, who is in charge of delivering on a record order backlog that underpins the share price, to stay for long if it becomes clear he is no longer Enders’ automatic heir.

He has been occasionally linked with energy firm Engie (ENGIE.PA). But so far he has appeared strongly committed to Airbus and one person who has known both executives for years said Bregier was still expected to succeed Enders.

Festering animosity between the two boiled over earlier this year in a row over who should control the powerful jet sales department - a spat first disclosed by Reuters.

The two are now locked in a battle for survival which could leave both of them vulnerable, insiders said.

Both have told visitors they expect the other to go, but sources disagree whether Enders is maneuvering for Bregier’s early departure as their power battle intensifies.

“The question is who goes and in what order,” a source close to the company said.

So on the same day that DL's board meets to decide the winner of the 150 narrowbody order, Airbus's board will meet and discuss the future leadership of the corporation.

Should make for an interesting news day.
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Re: Airbus CEO warns of significant impact from corruption probes

Wed Dec 13, 2017 2:09 pm

Mr Enders quickly denied that rumor:

“Reports of my demise are premature and exaggerated,” he told Reuters on the sidelines of an aircraft delivery ceremony in Toulouse on Wednesday.


Of course, as Enders' mandate is ending in 2019 it's quite obvious that he needs a successor. It is therefore not clear if the natural retirements are related to the corruption probes, although the media likes to present it that way.

It's also not clear if Bregier will get the job:

Bregier, too, may leave the company if he doesn’t get the top job, Figaro said. He may depart next year and be replaced by a German, Les Echos reported separately, citing unidentified people familiar with the deliberations.
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Re: Airbus CEO warns of significant impact from corruption probes

Wed Dec 13, 2017 2:12 pm

KarelXWB wrote:
Mr Enders quickly denied that rumor:

“Reports of my demise are premature and exaggerated,” he told Reuters on the sidelines of an aircraft delivery ceremony in Toulouse on Wednesday.


Of course, as Enders' mandate is ending in 2019 it's quite obvious that he needs a successor. It is therefore not clear if the natural retirements are related to the corruption probes, although the media likes to present it that way.

My understanding is that until this news arose that Enders was hoping to be extended past 2019, and now he is saying that he just hopes to fill his term till April 2019.

Enders's statement is pretty vague. He could be trying to deny his departure in 2019, or he could be trying to deny some reports that he'll leave by the end of this year (see the links I posted for references to that).

KarelXWB wrote:
It's also not clear if Bregier will get the job:

Bregier, too, may leave the company if he doesn’t get the top job, Figaro said. He may depart next year and be replaced by a German, Les Echos reported separately, citing unidentified people familiar with the deliberations.

Yes, while Bregier is the place where attention naturally flows, it is being said that his position has been somewhat weakened in recent times. The quote I posted said as much.
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Re: Airbus CEO warns of significant impact from corruption probes

Wed Dec 13, 2017 2:21 pm

For the hundreds or thousands that click on this post,simply, what did Airbus do that was so wrong? Using a middle man is illegal?
 
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Re: Airbus CEO warns of significant impact from corruption probes

Wed Dec 13, 2017 2:44 pm

william wrote:
For the hundreds or thousands that click on this post,simply, what did Airbus do that was so wrong? Using a middle man is illegal?

They are required to report the use of such middle men on the requests they file for import/export loans. Apparently Airbus is admitting to the UK that they might not have done this correctly, and that has triggered further external investigations. In the mean time access to such financing is suspended, which is a big problem for Airbus. Also Enders kicked off internal investigations which are said to have upset many of his colleagues. This was reported in the first post of this thread. It was also said that many deals in progress were suspended so that compliance could be checked, which also is upsetting those who get pay or bonus directly or indirectly by commission.
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Re: Airbus CEO warns of significant impact from corruption probes

Wed Dec 13, 2017 3:33 pm

Revelation wrote:
KarelXWB wrote:
It's also not clear if Bregier will get the job:

Bregier, too, may leave the company if he doesn’t get the top job, Figaro said. He may depart next year and be replaced by a German, Les Echos reported separately, citing unidentified people familiar with the deliberations.

Yes, while Bregier is the place where attention naturally flows, it is being said that his position has been somewhat weakened in recent times. The quote I posted said as much.


I'll say this once : like LEAHY ( see my post ), BREGIER sees further than most corporocrats.
After Leahy, he is the most capable of Airbus technocrats - replacing him would be a monumental strategic error only idiots would condone.

He is an "X-Mines", short for "Ecole Polytechnique - Ecole des Mines" ( something like West Point + MIT, but not even close ), an engineer & a businessman with strong government experience ( Ministry of Industry & Ministry of Agriculture ) before going into the military industry ( MATRA missiles ), then headed Eurocopter which grew 50% under his tenure 2003-2006.

Now, in 1984, he was sales manager in Japan for Péchiney, where he learnt some of the Japanese gist to conduct business the Asian way. He is therefore solely credited for negociating & breaking at last Boeing's monopoly on Japanese carriers with the 2013 JL order. He also supervised the reorganization of Airbus ( programme POWER 8 ), so he knows the group like the palm of his hand ( may even be taylored to him ). All this means he has the widest European & worldwide capacity to run such a global group.

Last, knowing how France & Germany play musical chairs with Airbus like they do at the IMF, the next Airbus Group CEO should go to a French : Brégier not only is the natural candidate, he is their best shot by far, particularly given the legal situation, the ramp-ups & Leahy's retirement.

http://www.aircraft.airbus.com/company/management-overview/airbus-coo-and-president-of-commercial-aircraft/
https://en.wikipedia.org/wiki/Fabrice_Br%C3%A9gier run the French version through Translate as it is more detailed.
 
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Re: Airbus CEO warns of significant impact from corruption probes

Wed Dec 13, 2017 3:38 pm

DWC wrote:
I'll say this once : like LEAHY ( see my post ), BREGIER sees further than most corporocrats.


And yet Brégier did not see the A350 supply chain issues coming, and yet Brégier is being held responsible for the A320neo ramp-up issues he clearly did not see coming either.

Last, knowing how France & Germany play musical chairs with Airbus like they do at the IMF, the next Airbus Group CEO should go to a French : Brégier not only is the natural candidate, he is their best shot by far, particularly given the legal situation, the ramp-ups & Leahy's retirement.


Bregier messed up, hence he isn't sure if he will get the job. Meanwhile, reports say another German might get the CEO chair.
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Re: Airbus CEO warns of significant impact from corruption probes

Wed Dec 13, 2017 3:53 pm

KarelXWB wrote:
And yet Brégier did not see the A350 supply chain issues coming, and yet Brégier is being held responsible for the A320neo ramp-up issues he clearly did not see coming either.

I am discussing his profile ;)
I never claimed he was infallible. But he's been with Airbus since 2003 while Airbus has done well.
I don't know the full insider details of their industrial problems to judge who is really responsible, in any case he was not alone.
But I am saying any outer "white knight" is probably a worse option.


Bregier messed up, hence he isn't sure if he will get the job. Meanwhile, reports say another German might get the CEO chair.

I did read the German report : might well be, but I don't know if Macron ( he has more leverage than the 11% stake ) will let a German head the group without some compensation. I also took the time to explain why ousting Brégier would be very short-sighted, would not be the first time Airbus makes such mistakes ( Bernard Lathière & Jean Pierson were retired too soon & replaced by less competent CEOs )
 
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Re: Airbus CEO warns of significant impact from corruption probes

Wed Dec 13, 2017 3:55 pm

DWC wrote:
I did read the German report : might well be, but I don't know if Macron ( he has more leverage than the 11% stake ) will let a German head the group without some compensation. I also took the time to explain why ousting Brégier would be very short-sighted, would not be the first time Airbus makes such mistakes ( Bernard Lathière & Jean Pierson were retired too soon & replaced by less competent CEOs )


At the end of the day, the Board makes the final decision. And we now the Board hired a headhunter to look outside the company for Enders' successor.
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Re: Airbus CEO warns of significant impact from corruption probes

Wed Dec 13, 2017 5:44 pm

Of course, that is how companies proceed.
The Board probably knows better, but from my profiling they "may" be throwing both babies ( FB & TE ) with the bathwater ( the legal wrongdoing ). I have no stock nor vested interest in Airbus but, right or wrong, I consider Brégier as an unusual asset for Airbus.

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