Halibut
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A380 Production Could Be Moved Outside Europe!

Thu Sep 21, 2006 10:56 am

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

Airbus superjumbo faces even longer delays

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


David Gow in Brussels
Thursday September 21, 2006
The Guardian


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

Thu Sep 21, 2006 10:59 am

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

The question is where ???

Hhmm scratchchin 

Halibut
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sk909
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RE: A380 Production Could Be Moved Outside Europe!

Thu Sep 21, 2006 11:12 am

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

There is no question... I think it's just statement.
But hey, it just adds to the joke...
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futurecaptain
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RE: A380 Production Could Be Moved Outside Europe!

Thu Sep 21, 2006 11:14 am

Another Airbus plant in China rumor?
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NAV20
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RE: A380 Production Could Be Moved Outside Europe!

Thu Sep 21, 2006 11:37 am

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

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

And yet another profit warning is foreshadowed:-

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

I bet Putin, Chirac, and Merkel have a really joyous meeting in Paris tomorrow!  Smile
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centrair
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RE: A380 Production Could Be Moved Outside Europe!

Thu Sep 21, 2006 11:38 am

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

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

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

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

The previous was opinion and not based on much but observations from A.net and other places.
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stirling
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RE: A380 Production Could Be Moved Outside Europe!

Thu Sep 21, 2006 11:47 am

Is not Russia considered a part of Europe?

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

I can't imagine there would be any economies of scale in the U.S., depends on how weak the dollar becomes, then wages and everything else become mott.
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MCIGuy
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RE: A380 Production Could Be Moved Outside Europe!

Thu Sep 21, 2006 11:57 am

Quote:
Is not Russia considered a part of Europe?

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

[Edited 2006-09-21 04:59:58]
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TeamAmerica
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RE: A380 Production Could Be Moved Outside Europe!

Thu Sep 21, 2006 12:06 pm

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

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707lvr
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RE: A380 Production Could Be Moved Outside Europe!

Thu Sep 21, 2006 12:15 pm

I'm wondering if this ridiculous story caused such an uproar that it busted every one of The Guardian's servers.
 
ltbewr
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RE: A380 Production Could Be Moved Outside Europe!

Thu Sep 21, 2006 12:21 pm

To even consider moving any part of final or major component A-380 production out of the EC won't happen. To me this is a ploy to get more Euros out of the EC countries to help them subsidise production costs or to get looser labor laws specific to them.
Perhaps they could do like Boeing has done with the 787 and to have partners make major components in other countres (Austraila, Japan) Those potential countries could include Japan, PRC, Taiwan, Russia, Eastern Euro countres like Poland, Brazil, USA or Canada. I am quite sure Airbus could get subsidies/incentives from andy of those governemnts as well as investors and companies that already make aircraft components in those countries.
 
wjcandee
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RE: A380 Production Could Be Moved Outside Europe!

Thu Sep 21, 2006 12:23 pm

I thought that one purpose of Airbus receiving "launch aid" and such was to generate jobs within the socialist economies of its owning states. Guess not.
 
justloveplanes
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RE: A380 Production Could Be Moved Outside Europe!

Thu Sep 21, 2006 12:35 pm

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

JLP
 
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Stitch
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RE: A380 Production Could Be Moved Outside Europe!

Thu Sep 21, 2006 12:35 pm

I can't see A380 production moving outside of TLS. The logistics make it fiscally...foolhardy.

It's possible Airbus could assemble the A350 outside of TLS, but I find that also unlikely since the closure of the A300/A310 line should provide sufficient space to create an A350 assembly line.
 
NAV20
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RE: A380 Production Could Be Moved Outside Europe!

Thu Sep 21, 2006 12:37 pm

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

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

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

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

[Edited 2006-09-21 05:46:13]
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ptugarin
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RE: A380 Production Could Be Moved Outside Europe!

Thu Sep 21, 2006 12:39 pm

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

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

Any thoughts?
 
Ken777
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RE: A380 Production Could Be Moved Outside Europe!

Thu Sep 21, 2006 12:50 pm

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

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

The question now is the potential for more pre-announcement leaks and more rumors.
 
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RE: A380 Production Could Be Moved Outside Europe!

Thu Sep 21, 2006 1:05 pm

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

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

Your question is answered in the article:

Quote:

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

There you have it! Prepare for the A380 to be built entirely in Toulouse. I would imagine this would entail giving Hamburg some sort of consolation prize, like the A350 line.
 
n1786b
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RE: A380 Production Could Be Moved Outside Europe!

Thu Sep 21, 2006 1:19 pm

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

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

- n1786b
 
CHIFLYGUY
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RE: A380 Production Could Be Moved Outside Europe!

Thu Sep 21, 2006 1:22 pm

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

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

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

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

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

[Edited 2006-09-21 06:23:56]
 
sonic67
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RE: A380 Production Could Be Moved Outside Europe!

Thu Sep 21, 2006 1:30 pm

Long Beach California will have some extra floor space soon.  laughing 
 
ikramerica
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RE: A380 Production Could Be Moved Outside Europe!

Thu Sep 21, 2006 1:35 pm

It doesn't say A380 to be moved, but just plants. Read: A320. Have a nice day.
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WingedMigrator
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RE: A380 Production Could Be Moved Outside Europe!

Thu Sep 21, 2006 1:47 pm

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

Any other pearls of wisdom?  devil 
 
astuteman
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RE: A380 Production Could Be Moved Outside Europe!

Thu Sep 21, 2006 3:36 pm

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

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

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

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

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

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

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

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

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

Astuteman
 
justloveplanes
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RE: A380 Production Could Be Moved Outside Europe!

Thu Sep 21, 2006 3:41 pm

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

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

Let me clarify my points a bit here.

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

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

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

BAE has sold out, and the Russians are stepping in and trying to influence things (so far - not happening).
 
jacobin777
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RE: A380 Production Could Be Moved Outside Europe!

Thu Sep 21, 2006 4:35 pm

Quoting CHIFLYGUY (Reply 20):

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



Quoting Justloveplanes (Reply 25):
1) The U.S. tanker deal is not a given to be a winner take all Boeing or Airbus. It is Airbus' recent statements that say they believe they have an excellent chance of getting a significant PORTION (I can't recall the exact phrasing) of the US Tanker Deal. A did not say they had an excellent chance at the whole thing.

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

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

Think "Lou Dobbs".....its going to be an uphill battle for Airbus on the tanker contract..even part of it......
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baroque
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RE: A380 Production Could Be Moved Outside Europe!

Thu Sep 21, 2006 7:15 pm

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

That ties the fate of a slab of Airbus to the tanker order. The dollars might be tempting, but someone in Airbus is going to ask how much they should bend to get a tanker order no matter how tempting it may seem in the medium term. If the won a part of the order, it is not exactly going to make them more loved in parts of the US.

Quoting NAV20 (Reply 14):
I would expect that the sub-plot. though, is "...job losses now, involving massive problems with the unions and European voters, just before the French elections - UNLESS the EU bails Airbus out with a huge wad of Euros...."

And I guess this is a contrary view. I am not sure either holds unless they are thinking of changing the RLI agreement. Has there been anything about a change? It seems reasonable to suspect that the Euro governments would be reluctant to change it at this time as a change would be a virtual admission that it did not conform with the WTO rules, and they have been adamant that it does.

Inertia could win the day there. Perhaps with some losses of jobs. Although I would have thought that just at present they might be spending more time figuring out how they can get the workers they have to complete more A380s more quickly (not to mention more better - yes I know, but this is the Chinglish way, so get used to it).

Quoting Astuteman (Reply 24):
So where's the story?
This should have been deleted long ago.

Bad day in the Furness? True, but I was hoping for an inspired feint down the touchline to come up with a gem Astuteman. But I imagine it is difficult enough to move a plane that size, let alone the plant to build it. Or then again, have they hired a geologist to arrange for Europe to be moved, could be the easy option between moving the plant and firing workers in Toulouse. Another option would be to add an hour to the lunch break.  duck 
 
columba
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RE: A380 Production Could Be Moved Outside Europe!

Thu Sep 21, 2006 7:24 pm

Quoting Futurecaptain (Reply 3):
Another Airbus plant in China rumor?

Never heard of the KC380  Wink
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David L
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RE: A380 Production Could Be Moved Outside Europe!

Thu Sep 21, 2006 8:02 pm

Quoting MCIGuy (Reply 7):
Quote:
Is not Russia considered a part of Europe?

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

Technically? It's partly in Europe, mostly in Asia. West of the Urals, e.g. Moscow, is in Europe.
 
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sebolino
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RE: A380 Production Could Be Moved Outside Europe!

Thu Sep 21, 2006 9:01 pm

Quoting Wjcandee (Reply 11):
I thought that one purpose of Airbus receiving "launch aid" and such was to generate jobs within the socialist economies of its owning states.

You obviously don't know what the "socialist economy" model is.
 
NAV20
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RE: A380 Production Could Be Moved Outside Europe!

Thu Sep 21, 2006 9:04 pm

EADS press release confirming further delays, duration and cost unknown:-

"Consequently, from what is known today, there will be further delays.

"The current status is that we have not finalized the schedule of deliveries nor the financial impact of any delays."


http://www.eads.com/web/lang/en/1024...F00000040950509/6/02/41457026.html
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Halibut
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RE: A380 Production Could Be Moved Outside Europe!

Thu Sep 21, 2006 9:20 pm

My apologies fellas if I mis-titled the thread . However , the moving of production is mentioned ! Just not specific regarding the a/c . I saw the title of the article & jumped on it !

Halibut

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

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

http://www.channelnewsasia.com/stori...rebusinessnews/view/231796/1/.html

Airbus A380 superjumbo faces fresh delay
By Asha Popatlal, Channel NewsAsia | Posted: 21 September 2006 1928 hrs

But according to media reports in Europe, there may be a lag of another six months, with possible cost and job cuts in Airbus.
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NAV20
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RE: A380 Production Could Be Moved Outside Europe!

Thu Sep 21, 2006 9:27 pm

Sorry if I seemed overly critical, Halibut.  Smile But it does look as if moving production abroad is the least of Streiff's worries.

When the trousers you're wearing are on fire you worry about saving the rest of your wardrobe later!  Smile
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Halibut
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RE: A380 Production Could Be Moved Outside Europe!

Thu Sep 21, 2006 9:40 pm

Quoting NAV20 (Reply 33):
When the trousers you're wearing are on fire you worry about saving the rest of your wardrobe later!

 eek 

Quoting NAV20 (Reply 16):
As several people have pointed out, moving production is a very expensive and time-consuming process. So it's a case of job losses now, moving production 'eventually.'

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

Agreed NAV20,

It looks as though the A380 " at this time " has become a burden for Airbus . So much for job creation !

 eyebrow 

Halibut
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Revelation
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RE: A380 Production Could Be Moved Outside Europe!

Thu Sep 21, 2006 9:42 pm

From the Guardian article:

Quote:
His plans are expected to involve a more radical restructuring of the entire business which could see its earnings wiped out by the remorseless rise of the euro against the dollar. Airbus sells its planes in dollars but its costs are in euros. Under Mr Streiff's plans, work that is currently shared between the main Airbus plants in Toulouse and Hamburg would be given to just one. It would involve more components, traditionally bought from European suppliers, sourced overseas to companies operating in the dollar zone.

Ultimately, it is said, output could be switched to new plants such as the factory Airbus is building in China for its A320 planes or even the US itself where the company plans to build a plant in Alabama for the air-to-air refuelling tanker plane it is offering to the Pentagon in a contract worth up to $100bn (£52bn).

So a quick re-read of this yields:
  • Current (assembly) work shifted from Hamburg to Toulouse
  • More "components" bought from companies operating in the dollar zone
  • Future (assembly) work could be moved outside the euro zone
    And:

    Quote:
    "Five years ago Boeing was in the mire but is now soaring and Streiff is confronting Airbus with a stiff reality check after the rapid transition from being top dog to being forced to examine everything we do," a source said.

    I don't think this is just a ploy to get the EU government to fork over more euros. The only way that could work is if the EU governments were willing to trade dollars for euros at the exchange rate of five years ago when most of the planning assumptions for the A380 were made. This would be a massive subsidy, one that I doubt the EU governments could or would make.

    It seems Airbus is sensibly dealing with the fact that the euro is strong against the dollar, and the trend is going to stay this way for a while. Their hedges have run out, so it's time to pay the piper.

    Five years ago, Boeing learned from Airbus, and decided the components for its next project would almost entirely come from external suppliers. This made the suppliers compete for Boeing's business, something that never happened when most components came from in-house. But they took it a step further, and decided it was OK to let even the most critical components come from offshore. Now, five years later, Airbus is seeing the wisdom of this, and is learning from Boeing. Who knows what will happen five years from now, when the A320NSR/B737RS aircraft are built?

    So, what exactly is the "dollar zone"? Many on this board seem to say it's the "non-euo zone", which would include UK and Russia. But to me, the "dollar zone" means those who have currency pegged to the dollar, namely the US and China. Remember, the problem Airbus is having is that the planes are being sold in dollars, so their costs have to be tied to the dollar, not the pound or the ruble. The yuan is directly tied to the dollar.
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    CHIFLYGUY
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    RE: A380 Production Could Be Moved Outside Europe!

    Thu Sep 21, 2006 10:18 pm

    Quoting Revelation (Reply 35):

    So, what exactly is the "dollar zone"? Many on this board seem to say it's the "non-euo zone", which would include UK and Russia. But to me, the "dollar zone" means those who have currency pegged to the dollar, namely the US and China. Remember, the problem Airbus is having is that the planes are being sold in dollars, so their costs have to be tied to the dollar, not the pound or the ruble. The yuan is directly tied to the dollar.

    I would agree. The "dollar zone" is the US plus those countries which more or less peg their currency to the dollar. China would be Exhibit A here.
     
    baroque
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    RE: A380 Production Could Be Moved Outside Europe!

    Thu Sep 21, 2006 11:39 pm

    Quoting Revelation (Reply 35):
    So a quick re-read of this yields:
    # Current (assembly) work shifted from Hamburg to Toulouse
    # More "components" bought from companies operating in the dollar zone
    # Future (assembly) work could be moved outside the euro zone
    And:

    That all makes a lot more sense, bit of a revelation you might say! Interesting if the main driver is the Euro rate, as it appeared for some years that Airbus could walk on water as the rate swung up alarmingly for Airbus. So the problems are not entirely a result of the long hols and three hour lunches at Tlse!! More that they are due to the woeful balance of trade that the US runs. A bit ironical really, Bush to the rescue of Boeing - by not moving a muscle!
     
    DAYflyer
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    RE: A380 Production Could Be Moved Outside Europe!

    Thu Sep 21, 2006 11:40 pm

    Quoting Halibut (Thread starter):
    including job losses and eventually moving production to plants outside Europe

    Perhaps SEATTLE....wouldnt that be a kick in the pants....
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    Lumberton
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    RE: A380 Production Could Be Moved Outside Europe!

    Thu Sep 21, 2006 11:47 pm

    Quoting Baroque (Reply 36):

    IIRC, EADS was hedged, but the hedges are expiring, or have already done so. The real irony here is that if EADS were to win the USAF tanker order and build a plant in Alabama, which I believe is in the "dollar zone" ( Smile ), then this could be very self-defeating for some EADS workers in the long run.
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    Stitch
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    RE: A380 Production Could Be Moved Outside Europe!

    Thu Sep 21, 2006 11:53 pm

    Quoting DAYflyer (Reply 37):
    Perhaps SEATTLE....wouldnt that be a kick in the pants....

    Airbus would be elligible for the same 20-year incentives we gave Boeing, so come on over! Rolls-Royce is considering (may have already agreed) to move some engine production stuff to WA because of those incentives.
     
    justloveplanes
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    RE: A380 Production Could Be Moved Outside Europe!

    Fri Sep 22, 2006 12:18 am

    Quoting Baroque (Reply 26):
    Quoting Justloveplanes (Reply 12):
    I think A will get a big chunk of the US tanker deal, but there will be no launch aid as a condition (not made public of course). My dos centavos.


    That ties the fate of a slab of Airbus to the tanker order. The dollars might be tempting, but someone in Airbus is going to ask how much they should bend to get a tanker order no matter how tempting it may seem in the medium term. If the won a part of the order, it is not exactly going to make them more loved in parts of the US.

    I am thinking the launch aid resolution is between the US and EU as part of a larger trade agreement. Those two entities would be making the deal for no launch aid and a healthy portion of the tanker contract to Airbus as part of the overall EU/US trade agreement, and while I'm sure Airbus' concerns will be heard - they would not be the real decison makers. I have heard US trade reps boil it down to a simple sentence "Do they (EU) want launch aid or a trade agreement?"

    By these comments, launch aid is a show stopper to a larger EU US trade agreement. The EU's concerns that Boeing gets all this backdoor R&D through DOD contracts and such would be addressed as its first step participation in the larger tanker deal. This is all speculation of course, but the stars just seem to be lining up where Airbus is going to look more like Boeing with a larger portion of its income coming from defence, including the U.S., and playing by the same set of rules.
     
    baroque
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    RE: A380 Production Could Be Moved Outside Europe!

    Fri Sep 22, 2006 12:27 am

    Quoting Lumberton (Reply 38):
    IIRC, EADS was hedged, but the hedges are expiring, or have already done so.

    Yes, I think that was part of the secret of walking on water for Airbus, but I thought the other half was that they bought so much from the US that this itself produced a form of hedging.

    It is also the case that Boeing buys considerable amounts from Europe, so B might be sharing some of these currency problems. I seem to remember reading once that more of the A32x was made in the US than the B737. If that is only half true, this currency realignment may affect other manufacturers. Bombardier also comes to mind.

    It would be interesting to be able to compare how flexible the B and Airbus purchasing systems are to cope with currency changes.

    I guess AB must wish that the US would join the Euro zone!
     
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    RE: A380 Production Could Be Moved Outside Europe!

    Fri Sep 22, 2006 12:37 am

    Quoting Justloveplanes (Reply 40):
    By these comments, launch aid is a show stopper to a larger EU US trade agreement. The EU's concerns that Boeing gets all this backdoor R&D through DOD contracts and such would be addressed as its first step participation in the larger tanker deal. This is all speculation of course, but the stars just seem to be lining up where Airbus is going to look more like Boeing with a larger portion of its income coming from defence, including the U.S., and playing by the same set of rules.

    I suggest that the EU/US trade agreement would have to leave a fairly level playing field before the EU would give up the RLI card. But even half of that order, is a substantial chunk of business. And having a large operation in the US would start to produce some balancing of the currency problems.

    I do wonder where defence purchases are going. They are still heavily biased to fighting Russia, which seems a bit pointless, unless China is going to substitute for Russia. But no doubt uses will be found for other expensive systems.

    I am still a bit puzzled as to what the US will be doing with flocks of tankers by about 2015 or 2020. I guess this is known, but I suspect it would be possible to project enough power without the current demand for tankers.
     
    F22KA
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    RE: A380 Production Could Be Moved Outside Europe!

    Fri Sep 22, 2006 1:09 am

    OHHH NOOO! If they "eventually" move production outside EU, no one from EU could point its finger at Boeing and say: "it is not an American plane, it is an outsourced plane". OOPS! Have the socialists run out of pride?
    Nah, there is too much pride among socialists and for the sake of not following the US "outsourcing" practices, it is not gonna happen...
    They are going to run the tax bucket through the entire EU and come up with some more "investment" money. Some Europeans just love high taxes, the higher the merrier.
     
    justloveplanes
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    RE: A380 Production Could Be Moved Outside Europe!

    Fri Sep 22, 2006 1:10 am

    Quoting Baroque (Reply 42):
    I am still a bit puzzled as to what the US will be doing with flocks of tankers by about 2015 or 2020. I guess this is known, but I suspect it would be possible to project enough power without the current demand for tankers.

    When you think about force projection, a great (and expensive) portion of the US and EU air arsenal is mission constricted without the tankers. They are amazingly important - the projected air superiority mission is impossible without them. It's either more tankers or mothball a very large portion of the tactical force. With the mission versatile F-35 is coming onstream there may be a reduction in tanker force, but right now the US fleet is something like 500(! - this is the number I have heard) KC-135's and KC-10's...Even cutting it in half is the biggest deal around for widebodys until 40 years from now when they do this all over again.

    A huge U.S. advantage over aircraft like the MIG-29 or SU-27 in combat boils includes AWACS support who see the enemy first (and who rely on tankers to stay aloft) - and tactical aircraft who can be positioned to take advantage of the intelligence (also reliant on tankers). Most fighters that get shot down (a major portion) never see who hit them.

    It has been said that the most aerodynamically capable aircraft of recent years (F-22 excluded) was the MIG-29, but it got creamed in Iraq. A signigicant part of the defeat is the huge US advantage in Aerial intel (and of course electronics) and tactical positioning - which is fed by tankers.

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    RE: A380 Production Could Be Moved Outside Europe!

    Fri Sep 22, 2006 1:41 am

    Quoting Baroque (Reply 36):
    That all makes a lot more sense, bit of a revelation you might say! Interesting if the main driver is the Euro rate, as it appeared for some years that Airbus could walk on water as the rate swung up alarmingly for Airbus. So the problems are not entirely a result of the long hols and three hour lunches at Tlse!! More that they are due to the woeful balance of trade that the US runs. A bit ironical really, Bush to the rescue of Boeing - by not moving a muscle!

    One thing that interests me is that Airbus's current planning is based on the high euro/dollar ratio. Interestingly enough, as it moves high-value production from the euro zone to the dollar zone, it will be a lowering influence on the euro/dollar ratio, and if other large industries do this as well, the movement could be signficant. So, the enactment of their plan could cause the key assumptions on which it is based to be undermined. Exchange rates vary a lot: as recently as four years ago, 1.00EUR was 0.85 USD instead of the 1.28 USD it currently is, according to http://quote.yahoo.com/m5?s=EUR&t=USD&a=1&c=3
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    Zone1
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    RE: A380 Production Could Be Moved Outside Europe!

    Fri Sep 22, 2006 2:06 am

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

    Well I think they will either move it to China or to the location they plan on building the KC30--Mobile, Alabama.
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    baroque
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    RE: A380 Production Could Be Moved Outside Europe!

    Fri Sep 22, 2006 2:26 am

    Quoting Revelation (Reply 45):
    Interestingly enough, as it moves high-value production from the euro zone to the dollar zone, it will be a lowering influence on the euro/dollar ratio, and if other large industries do this as well, the movement could be signficant. So, the enactment of their plan could cause the key assumptions on which it is based to be undermined.

    Yes but, with the caveat that reducing sensitivity to changes in rates would be their target, not a direct benefit. Just having a stable environment would be the most likely aim. As you suggest, if a large mass of industry move, you remove the result you are after. So chasing stability is more likely to work than seeking lower overall costs. Changing internal practices as Boeing have done is more likely to be effective on overall costs.

    Presumably, China's cost advantage will not look so great in a few years time. I wonder how Chinese aircraft industry productivity compares with France or the US. Anybody know?
     
    Thorben
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    RE: A380 Production Could Be Moved Outside Europe!

    Fri Sep 22, 2006 2:52 am

    Quoting Zone1 (Reply 46):
    Well I think they will either move it to China or to the location they plan on building the KC30--Mobile, Alabama.

    Airbus will probably get a $20 bln tax break for moving the production to Seattle, WA. I can already see Halibutt as the plant manager.
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    Rheinbote
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    RE: A380 Production Could Be Moved Outside Europe!

    Fri Sep 22, 2006 3:44 am

    The idea of moving a stalled program of this order of magnitude anywhere is incredibly stupid.
    The idea of moving part of a company that suffers from a byzantine organisation with dysfunctional reporting lines to foreign countries falls into the same category.

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