leelaw
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Eads To Reveal "Power8" Restructuring Imminently

Sat Jan 06, 2007 12:00 am

Quote:
EADS’s ambitious plan to cut costs and rationalise production at Airbus is to begin imminently, with EADS co-chief executive Louis Gallois expected to set out details of the Power8 programme at the beginning of February.

Union representatives have been told that talks on the plan will begin soon at European and French national level...

http://www.flightglobal.com/Articles...ucturing+programme+imminently.html

[Edited 2007-01-05 16:04:23]
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scouseflyer
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RE: Eads To Reveal "Power8" Imminently

Sat Jan 06, 2007 12:03 am

Anyone know the signicance of 8 - 8% effeciency gains perhaps?
 
NAV20
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RE: Eads To Reveal "Power8" Restructuring Imminently

Sat Jan 06, 2007 12:12 am

Quoting Scouseflyer (Reply 1):
Anyone know the signicance of 8

Airbus hit the buffers in June 2006, and 'talks will begin' in February. Maybe it means that EADS/Airbus needs a minimum of eight months to decide anything?  Smile
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Lumberton
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RE: Eads To Reveal "Power8" Restructuring Imminent

Sat Jan 06, 2007 12:27 am

FI also commented on this in the blog:
http://www.bizbuzzmedia.com/blogs/flight_international/default.aspx

Quote:
It is not just the effects of the devastating delays to the A380 programme that Airbus needs to offset. It is still facing the challenge of a weak US dollar, an issue unlikely to trouble its US-based competitor.

But analysts are now confident that the company is making a major step in the right direction by focusing on the important initial stages of Power8: winning the support of the unions, which is not likely to be easy, given the nervous reaction of suppliers to the possibility of changes in production strategy, and sorting out the complex split of assembly work between Hamburg and Toulouse.

One analyst points out that the issue of site closures, which will be inevitable if Airbus is to get back on track, will have to be dealt with later on because of the political sensitivities involved.

The new year is sure to bring plenty of hurdles for Airbus, but the news that Power8 is moving forward may be a sign that things are looking up, even if its implementation is likely to be traumatic.


"later on" as in after the French elections?

[Edited 2007-01-05 16:29:20]
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GRIVely
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RE: Eads To Reveal "Power8" Restructuring Imminently

Sat Jan 06, 2007 2:47 am

If the discussions with the unions and other interested parties are only going to begin in February I don't think the actual plan can be put into effect in less than six months. Especially since there are certain to be major sticking points over which of the sacred animals (German or French cows and British and Spanish calves) are going to disadvantaged by any redistribution of work. I don't look for these complex matters to be resolved in any rapid fashion.

As a matter of fact it should be quite an entertaining spectator sport as the various factions battle it out to make certain none of the revisions fall on the heads of their supporters. I look forward to seeing just how much European comity will exist when the French and Germans are fighting over several tens of thousands of jobs. Of course they can always join forces to sell the perfidious British down the river since everyone knows that after all, they really aren't Europeans.
 
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mariner
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RE: Eads To Reveal "Power8" Restructuring Imminently

Sat Jan 06, 2007 3:05 am

Quoting GRIVely (Reply 4):
I look forward to seeing just how much European comity will exist when the French and Germans are fighting over several tens of thousands of jobs.

What a curious pleasure.

You don't think workers and their unions should fight for their jobs?

mariner
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RE: Eads To Reveal "Power8" Restructuring Imminently

Sat Jan 06, 2007 3:24 am

Quoting Mariner (Reply 5):
You don't think workers and their unions should fight for their jobs?

Interesting use of possesive case. Does the employer own the job, or the employee own the job?
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Poitin
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RE: Eads To Reveal "Power8" Restructuring Imminently

Sat Jan 06, 2007 3:34 am

Quoting Revelation (Reply 6):
Quoting Mariner (Reply 5):
You don't think workers and their unions should fight for their jobs?

Interesting use of possesive case. Does the employer own the job, or the employee own the job?

You have, of course, put your finger on the real issue. In the US, it is the employer, in Europe, it is the employee. This will lead to fewer jobs in Europe.
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mariner
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RE: Eads To Reveal "Power8" Restructuring Imminently

Sat Jan 06, 2007 3:46 am

Quoting Revelation (Reply 6):
Interesting use of possesive case.

Interesting parsing of the English language. Do you never refer to "my" job?

I did, when I lived in the US. I was employed by Suchandsuch Corporation. "My" job involved several responsibilities.

My employers seemed to share the view. They would refer to "your" job when speaking to me of my work.

???

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Lumberton
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RE: Eads To Reveal "Power8" Restructuring Imminently

Sat Jan 06, 2007 4:31 am

I wonder how far EADS is prepared to go if their plans incur the wrath of the unions and their political supporters. Will they risk "industrial action", including a strike? EADS admits it needs to cut costs. Part of the cost cutting plans will be outsourcing to the "dollar zone". How much pain is EADS willing to endure to make this happen? I guess we'll see this year....
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baron95
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RE: Eads To Reveal "Power8" Restructuring Imminently

Sat Jan 06, 2007 4:37 am

"Union representatives have been told that talks on the plan will begin soon at European and French national level."

When talks "begin" at the European and French "national level", can anything really happen? Just immagine, if after the Boeing production snaffus and the post-9/11 North America aviation colapse, Boeing had to start talks in Washington DC and the various states representing the assembly sites (Washington State, Kansas, etc) to build a "concensus" on what to do.

There is no time. Streiff was absolutely correct. He had the sense of urgency. He KNEW that only in the face of an accute crisis (one whiping out billions from AIrbus) he had a chance to push real governance/production reforms through Airbus.

Soon, the A380 will be in service, the A350 will be in solid design footing, A320s will be continue to pay the bills, A330s will provide some modest proffit, 2006 will be a distant memory, all will be well, no changes will happen.

And then..... Booom....

The $ gets lower, oil prices get higher, 787-10 gets launched, 787-8 and 747-8 enter service, A330/A340/A380 stop selling or sell only at steep discounts, boeing launches 737RS, margins on the A320 get lower, and Airbus really comes under presure. Then you'll need Power 380.

[Edited 2007-01-05 20:39:29]
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Poitin
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RE: Eads To Reveal "Power8" Restructuring Imminently

Sat Jan 06, 2007 4:41 am

Quoting Mariner (Reply 8):
My employers seemed to share the view. They would refer to "your" job when speaking to me of my work.

To further parse your language, you obviously thought you owned your employers with your use of the possessive "My employers."

Now, did "your" employers ever give you "your" pink slip?
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mariner
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RE: Eads To Reveal "Power8" Restructuring Imminently

Sat Jan 06, 2007 4:49 am

Quoting Poitin (Reply 11):
Now, did "your" employers ever give you "your" pink slip?

Oh, yes. Several times. It wasn't anyone else's pink slip.

Still, if you want a debate about the English language, I'm up for it.

I was always enchanted by the American use of the possessive. It was such fun to hear Amerians refer to "my" procotologist.

 

mariner

[Edited 2007-01-05 20:49:45]
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Poitin
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RE: Eads To Reveal "Power8" Restructuring Imminently

Sat Jan 06, 2007 5:00 am

Quoting Mariner (Reply 12):
Oh, yes. Several times. It wasn't anyone else's pink slip.

Still, if you want a debate about the English language, I'm up for it.

I was always enchanted by the American use of the possessive. It was such fun to hear Amerians refer to "my" procotologist.

I would love to debate American verses several other forms of English, which is great fun, but unfortunately, it would have little to do with "our" A380 debate.

I share your amusement with American usage. Hiberno-English is fun as well.

Back to the thread.
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Poitin
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RE: Eads To Reveal "Power8" Restructuring Imminently

Sat Jan 06, 2007 5:07 am

Quoting Lumberton (Reply 9):
I wonder how far EADS is prepared to go if their plans incur the wrath of the unions and their political supporters. Will they risk "industrial action", including a strike? EADS admits it needs to cut costs. Part of the cost cutting plans will be outsourcing to the "dollar zone". How much pain is EADS willing to endure to make this happen? I guess we'll see this year....

I think they will try to band-aid the problem. However, much like the Chinese melted down the Iron Rice Bowl, so one day Europe will have to deal with their socialist views. It think Baron95 had the scenario correct in:

Quoting Baron95 (Reply 10):
And then..... Booom....

The $ gets lower, oil prices get higher, 787-10 gets launched, 787-8 and 747-8 enter service, A330/A340/A380 stop selling or sell only at steep discounts, boeing launches 737RS, margins on the A320 get lower, and Airbus really comes under presure. Then you'll need Power 380.
Now so, have ye time fer a pint?
 
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mariner
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RE: Eads To Reveal "Power8" Restructuring Imminently

Sat Jan 06, 2007 5:10 am

Quoting Poitin (Reply 13):
but unfortunately, it would have little to do with "our" A380 debate.

Sorry, I thought you meant what you wrote - that it is central the A380 debate:

Quoting Poitin (Reply 7):
You have, of course, put your finger on the real issue. In the US, it is the employer, in Europe, it is the employee. This will lead to fewer jobs in Europe.

mariner
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astuteman
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RE: Eads To Reveal "Power8" Restructuring Imminently

Sat Jan 06, 2007 5:13 am

Quoting Scouseflyer (Reply 1):
Anyone know the signicance of 8

I understand it to be because the full scope of savings (E2Bn PA?..) are due to be realised by the end of 2008.

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GRIVely
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RE: Eads To Reveal "Power8" Restructuring Imminently

Sat Jan 06, 2007 5:22 am

Quoting Mariner (Reply 5):
Quoting GRIVely (Reply 4):
I look forward to seeing just how much European comity will exist when the French and Germans are fighting over several tens of thousands of jobs.

What a curious pleasure.

You don't think workers and their unions should fight for their jobs?

mariner

Hi, Mariner. I didn't say I took any pleasure in the upcoming struggle. I just expressed that there will likely to be some discomfiting pressures on the concept that there is such a thing as a "European Union" when both the French and German national governments will be wrestling with each other over how many jobs are going to be saved/lost in each respective country.

I also find it intriguing that Airbus, as a purportedly private company, seemingly has to discuss their business strategy with the French and German Governments. Is that a requirement of labor laws, due to the financing arrangements, a traditional case of "Mother May I?" or just why is that? Do the respective national governments have veto power over Airbus business decisions--like golden shares or those kinds of things in certain Asian countries?

Looking for illumination.

Cheers,

GRIV
 
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RE: Eads To Reveal "Power8" Restructuring Imminently

Sat Jan 06, 2007 5:23 am

Quoting Mariner (Reply 8):
Interesting parsing of the English language. Do you never refer to "my" job?

I try not to. "My" job has been taken away due to local market conditions, and it's been outsourced to India as well. If it were "my" job, none of these things would have happened. If it were "my" job, I could trade or sell it, like a landing slot. But it really is not "my" job, it's the employer's, and they can and do take it away at will.
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Stitch
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RE: Eads To Reveal "Power8" Restructuring Imminently

Sat Jan 06, 2007 5:31 am

Quoting Lumberton (Reply 9):
I wonder how far EADS is prepared to go if their plans incur the wrath of the unions and their political supporters.

The mood of VW's workers in Wolfsburg is "not good" according to those interviewed now that VW is increasing the work-week at that plant from 28 hours to 33. As the workers were being paid at the German standard 35-hour work week rate and will not receive a wage increase, their hourly wage has fallen the equivalent of 14%.

However, as unemployment in the EU is rising, employers are able to exercise more power over their employees. VW had threatened to "off-shore" production if the workers had not agreed to the new hours. So Airbus may be able to get concessions from their workforce...

...at least in Germany.  Wink

And I should note here that Volkswagen's second-biggest shareholder is its home state of Lower Saxony, which one can imagine has an interest in protecting jobs. More than half the seats on the company's board belong to German politicians and labor representatives, in keeping with a German law that requires big corporations to give workers a voice in governance.

So Hamburg may win more Airbus work if France balks at forcing TLS to become more efficient...
 
Lumberton
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RE: Eads To Reveal "Power8" Restructuring Imminent

Sat Jan 06, 2007 6:01 am

Is the China deal to co-produce (or assemble) 300 A320s part of Power 8, or just a sales incentive?
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mariner
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RE: Eads To Reveal "Power8" Restructuring Imminently

Sat Jan 06, 2007 6:02 am

Quoting GRIVely (Reply 17):
I didn't say I took any pleasure in the upcoming struggle.

You said that you were "looking forward to it". To me that implies eager anticipation.

Quoting GRIVely (Reply 17):
Looking for illumination.

It isn't hard to find. Unlike the US, Europe is not yet a federation. So Europe functions differently, as many societies do. Impending major job losses in a major Australian corporation would involve a great deal of "discussion" with government. When there was a possibility of major job losses at Air New Zealand, the NZ government stepped up to the plate with a billion bucks to avert that possibility.

I make no claim as to whether this is "right" or "wrong" - simply that it is different. It seems curious to demand that US laws and practices should apply to a non-US corporation or society.

Quoting Revelation (Reply 18):
But it really is not "my" job, it's the employer's, and they can and do take it away at will.

I work in an industry where there is no such thing as job security. I have, as noted above, frequently received "a" pink slip - but it was "my" pink slip, no one else's.

Just as the job was "mine" for the time that I did the job.

Still, if you want to be pedantic, I suppose one could say that "I did the employer's job" - to which one might ask, why wasn't the employer doing the job?

mariner
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Ruscoe
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RE: Eads To Reveal "Power8" Restructuring Imminently

Sat Jan 06, 2007 7:40 am

I just took a look at the numbers and one could excuse Airbus employees for thinking that they should not bear the brunt of "Power 8".

In 2005 Airbus generated nearly 2/3 of the EADs Revenue (22 billion v EADS 34 billion), but did so with less than half of the total employees.( 54680 v EADS total 113210).

Also in terms of the efficiency of their work, and I realise there are numerous parameters unaccounted for, it took 145 Airbus employees to produce one aircraft (54680 employees for 378 deliveries)whereas it took Boeing 171 employees to produce one aircraft. (49591 employees to produce 290 deliveries).

Of course nothing will end the eventual inevitable demise of EADS/Airbus unless the Corporate structure is changed to reduce the political interference down to manageable levels.

Ruscoe
 
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Stitch
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RE: Eads To Reveal "Power8" Restructuring Imminently

Sat Jan 06, 2007 8:39 am

Amazing to realize that when I worked there in 2001, we had almost 94,000 folks in BCA...
 
baron95
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RE: Eads To Reveal "Power8" Restructuring Imminently

Sat Jan 06, 2007 1:27 pm

Quoting Ruscoe (Reply 22):
Also in terms of the efficiency of their work, and I realise there are numerous parameters unaccounted for, it took 145 Airbus employees to produce one aircraft (54680 employees for 378 deliveries)whereas it took Boeing 171 employees to produce one aircraft. (49591 employees to produce 290 deliveries).

You should have used BCA employee count (if available for the comparisson) or you need to count every rocket, satelite, defense system, military plane, etc that Boeing produced. Efficiency is not even close. Also, Airbus is at the top (record high deliveries) of the cycle, while Boeing is just coming out of the lull (record low deliveries). Add to the mix the fact that Boeing mix has a much higher proportion of widebodies than Airbus, and you get the picture.

Try this as an exercise. Divide the Revenue generated by BCA by the BCA employee count and do the same for Airbus. It will be sobering to you.
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Ruscoe
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RE: Eads To Reveal "Power8" Restructuring Imminently

Sat Jan 06, 2007 3:40 pm

Yep that number is the BCA number. Total Boeing numbers are over 100,000. Don't have them in front of me.

What you say about number of deleveries does affect the number of course, but you will find that BCA also increased its employment level in 2006.

Will post the figures when I return home in a couple of hours.

Yes also to the point about total revenue of boeing being so much higher than EADS, but that was part of the point I was making that Airbus accounts for a disproportionate amount of EADS revenue with less than half the workforce of EADS total. (66% of total revenue with < 50% of employees.) so EADS need to look hard atall the divisions as well as Airbus.

Ruscoe
 
baron95
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RE: Eads To Reveal "Power8" Restructuring Imminently

Sat Jan 06, 2007 3:46 pm

Quoting Ruscoe (Reply 25):
Yes also to the point about total revenue of boeing being so much higher than EADS, but that was part of the point I was making that Airbus accounts for a disproportionate amount of EADS revenue with less than half the workforce of EADS total. (66% of total revenue with < 50% of employees.) so EADS need to look hard atall the divisions as well as Airbus.

And, until now they used to contribute a disproportionate amount of the profits as well. Though over the next 4 years that will not be so. I do fear that Airbus will have to sell widebodies at a loss or little proffit from 2008-2013 - and without power 8 that can be a big drag.

I think Airbus needs to concentrate on what it can do, and ignore the rest of EADS. In the future, who knows. Maybe Airbus will be spun off.
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leelaw
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RE: Eads To Reveal "Power8" Restructuring Imminently

Sat Jan 06, 2007 4:23 pm

Quoting Ruscoe (Reply 25):
Total Boeing numbers are over 100,000.

According to Boeing's website worldwide employment is 155,000.
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Ruscoe
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RE: Eads To Reveal "Power8" Restructuring Imminently

Sat Jan 06, 2007 4:59 pm

Over the past 12 months BCA employment has grown to 56310, for 398 deliveries, making it 141 (down from 171 end 2005 year) at the end of 2006.
Total Boeing Worldwide is as Leelaw says at 154,031.

Won't have Airbus figures for a litle while yet.

I do have some other boeing figiures though.

In 1998 it took 211 BCA employees per delivery (118,000 employees for 559 deliveries), so BCA has made quite an improvement there. Boeing Worldwide in 1998 was 231,000.

A bit off topic but something I find interesting is that the Average Unit delivered price for Airbus in $ is 70.4 million and for Boeing is $78.1 million.

However, Av Unit value of Airbus backlog is 111 million and for Boeing is 68 million. Spares etc could account for the Boeing difference but I wonder what makes up the Airbus difference?

Also Av unit EBIT (earnings before interest and tax) i8s 7.32 million for Airbus and 4.94 million for Boeing. (All the numbers are in dollars).

The value of the Airbus backlog is 242 billion dollars for 2177 units, but the value of the Boeing backlog is almost half that at 124 billion for 1809 units.
(This is all at the end of 2005 because don't have 2006 figures.) This does not make a lot of sense to me. My speculation is that Airbus values it backlog at "book" values whereas Boeing uses actual contractual value.

Ruscoe
 
Poitin
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RE: Eads To Reveal "Power8" Restructuring Imminently

Sun Jan 07, 2007 12:42 am

Quoting Mariner (Reply 15):
Quoting Poitin (Reply 13):
but unfortunately, it would have little to do with "our" A380 debate.

Sorry, I thought you meant what you wrote - that it is central the A380 debate:

Quoting Poitin (Reply 7):
You have, of course, put your finger on the real issue. In the US, it is the employer, in Europe, it is the employee. This will lead to fewer jobs in Europe.

mariner

I was referring to our epistemological debate on the possessive case. Of course you are correct on the above point. Europe has a mindset which is incompatiable with the rest of the world and will have to change much like the Chinese and Japanese did. Both those countries now embrace the layoff. France will have to too. Just how that happens will be interesting to watch.
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Poitin
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RE: Eads To Reveal "Power8" Restructuring Imminently

Sun Jan 07, 2007 12:55 am

Quoting Revelation (Reply 18):
Quoting Mariner (Reply 8):
Interesting parsing of the English language. Do you never refer to "my" job?

I try not to. "My" job has been taken away due to local market conditions, and it's been outsourced to India as well. If it were "my" job, none of these things would have happened. If it were "my" job, I could trade or sell it, like a landing slot. But it really is not "my" job, it's the employer's, and they can and do take it away at will.

Good point! I doubt that our European friends understand that virtually all workers in the US are "at will" and we actually sign a contract (known as the "offer letter") agreeing to it. And more and more of us are contract workers, who "legally" work for a shadow company that resells our labor to the company we "work" at.

For those who don't know what "at will" means, it means you work for someone only as long as they wish and you can be dismissed "at will" of the employeer.

Boy, I can just see the riots in France when they try to pass that law in France.
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Poitin
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RE: Eads To Reveal "Power8" Restructuring Imminent

Sun Jan 07, 2007 1:07 am

Quoting Ruscoe (Reply 28):
The value of the Airbus backlog is 242 billion dollars for 2177 units, but the value of the Boeing backlog is almost half that at 124 billion for 1809 units.
(This is all at the end of 2005 because don't have 2006 figures.) This does not make a lot of sense to me. My speculation is that Airbus values it backlog at "book" values whereas Boeing uses actual contractual value.

Ah, maybe "list price"?

Quoting Baron95 (Reply 24):
You should have used BCA employee count (if available for the comparisson) or you need to count every rocket, satelite, defense system, military plane, etc that Boeing produced. Efficiency is not even close. Also, Airbus is at the top (record high deliveries) of the cycle, while Boeing is just coming out of the lull (record low deliveries). Add to the mix the fact that Boeing mix has a much higher proportion of widebodies than Airbus, and you get the picture.

Try this as an exercise. Divide the Revenue generated by BCA by the BCA employee count and do the same for Airbus. It will be sobering to you.

Even more interesting would be 2006 Gross Earnings per employee. How many billions did Airbus lose in 2006? It would be nice to see their balance sheet, which of course is marked Top Secret.

[Edited 2007-01-06 17:24:19]
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astuteman
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RE: Eads To Reveal "Power8" Restructuring Imminently

Sun Jan 07, 2007 1:12 am

Quoting Poitin (Reply 30):
Good point! I doubt that our European friends understand that virtually all workers in the US are "at will" and we actually sign a contract (known as the "offer letter") agreeing to it. And more and more of us are contract workers, who "legally" work for a shadow company that resells our labor to the company we "work" at.

In the last 5 years, the percentage of "contract" workers at our yard employed as you describe has changed from 25% to 75%.
The 25% who aren't are considered the "core" who are too valuable to leave exposed on that basis.
Don't know if we here in the UK would classify as "your European Friends", but you might want to exercise some care in painting with too broad a brush....  Smile

Regards
 
Poitin
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RE: Eads To Reveal "Power8" Restructuring Imminently

Sun Jan 07, 2007 1:22 am

Quoting Astuteman (Reply 32):
In the last 5 years, the percentage of "contract" workers at our yard employed as you describe has changed from 25% to 75%.
The 25% who aren't are considered the "core" who are too valuable to leave exposed on that basis.
Don't know if we here in the UK would classify as "your European Friends", but you might want to exercise some care in painting with too broad a brush.... Smile

You are BRITISH, my good sir! You are an island entire until itself, seperated from Europe by the Channel!
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gbfra
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RE: Eads To Reveal "Power8" Restructuring Imminently

Sun Jan 07, 2007 1:32 am

In Continental Europa the number of "contract workers" has been increasing significantly in recent years.

Even if some of our American and Australian friends on this forum seem to think we are living on the dark side of the moon here, in fact, we don't.

Happy New Year!

gbfra
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Poitin
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RE: Eads To Reveal "Power8" Restructuring Imminently

Sun Jan 07, 2007 1:38 am

Quoting Gbfra (Reply 34):
In Continental Europa the number of "contract workers" has been increasing significantly in recent years.

Even if some of our American and Australian friends on this forum seem to think we are living on the dark side of the moon here, in fact, we don't.

Happy New Year!

Happy to be corrected GBfa, we do get such a distorted picture of Europe from CNN and their coverage of the riots they had in France.

And please don't believe that I like the trend to "contract workers." I don't, but it is the way things are going world wide. In Japan they are called "grey workers".
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Ruscoe
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RE: Eads To Reveal "Power8" Restructuring Imminently

Sun Jan 07, 2007 7:46 am

Av revenue per employee for Airbus (2005) was $486,737 and for Boeing Commercial Aircraft was 456,756. I expect that these figures will strongly swing around in Boeings favour in the next few years as deliveries pick up and losses on 380 mount at Airbus.

Quoting Gbfra (Reply 34):
Even if some of our American and Australian friends on this forum seem to think we are living on the dark side of the moon here,

I'm sure you know as a nation what to do but you seem unable to do so for political reasons, which put another way means, the voting public won't tolerate such changes until the pain increases further. How many of your contract workers are immigrant visitor workers?

You know Australia is a good example of how deregulating the work force can boost incomes for workers, lower unemployment, and provide prosperity for a whole nation. Until 15 years ago we were moving down the "European" path in that Unions were achieving higher and higher wages for less work and a multitude of other perks. Unemployment went through the roof. At one point we had 15% unemployment, and 18% inflation. The labour market has been deregulated, as have the banks, and other institutuins, and now we have the lowest unemployment virtually ever and manageable inflation(3.5%), and we have some, and I mean some chance to compete against those Asian nations which have billions of workerws prepared to earn in a month what an Australian earns in a day. There has been a price to pay. Generally people are working more hours. As globalisation continues, those with more regulated labour markets, and economies, will find it increasingly difficult.

Quoting Poitin (Reply 31):
Ah, maybe "list price"?

Yes that's what I meant.

As for Britain. Europe doesn't think Britain ois part of Europe, Britain doesn't think Britain is part of Europe and the rest of the world doesn't think Britain is part of Europe, and if Bitain plays it's card right, then Bitain can become to Europe what Hong Kong was (is) to China, and prosper+++.

Ruscoe
 
NAV20
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RE: Eads To Reveal "Power8" Restructuring Imminently

Sun Jan 07, 2007 9:09 am

A little more information in this Reuter's article:-

http://today.reuters.com/news/articl...0_EADS-AIRBUS.XML&rpc=66&type=qcna

Significantly, 'consultations' - first at 'European' level, later in individual countries - will stretch on at least until the end of March:-

"Petrarchi said the French presentations would take place between mid-February and end-March."

As the delays and 'consultations' drag on, the underlying aims of the exercise, as stated by Streiff and now re-stated by Gallois, look increasingly impractical and incapable of achievement wthin the very tight timescale envisaged (i.e. E5B. savings by 2010):-

"Gallois has said that Power8 is crucial for the success of the key new A350 XWB programme.

"Power8, unveiled in October 2006, aims to reduce costs, save cash and develop new products faster.

"The development cycle times are to be reduced by two years while the overall productivity is to be increased by 20 percent. The programme aims at annual cost savings of at least 2 billion euros from 2010 onwards and delivering some 5 billion euros in cumulative cash savings by 2010."


Any of us who have ever been involved in industry will know that those aims - a 20% increase in productivity COMBINED with large annual cost savings, all achieved within a timescale of only three years - already look crazily over-optimistic.

Normally, even with goodwill and cooperation on all sides, including the unions, cumulative productivity increases of 1%-2% per annum would be good going. And even that would normally be accompanied by higher, not lower, short-term costs, since increased automation would be essential, and there will be an obvious need for redundancy compensation, re-training costs etc..

Gallois is talking about a cumulative rate of productivity increases of over 6% per annum between mid-2007 and mid-2010. That is simply NOT going to happen.
"Once you have flown, you will walk the earth with your eyes turned skywards.." - Leonardo da Vinci
 
Ruscoe
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RE: Eads To Reveal "Power8" Restructuring Imminently

Sun Jan 07, 2007 11:41 am

Quoting NAV20 (Reply 37):
Any of us who have ever been involved in industry will know that those aims - a 20% increase in productivity COMBINED with large annual cost savings, all achieved within a timescale of only three years - already look crazily over-optimistic.

Especially when Airbus efficiency is already quite good. The figures I have been quoting illustrate that there is not a lot of fat in Airbus. The fat is elsewhere in EADS.

To me it sounds like a politically rational argument to show 350 funding is available via cost savings. We might get more business rational thinking after the elections, but I still do not see the underlying problem being addressed, the structure. I see that there are even graphicals in the last Annual report (2005) to illustrate that everything is nice and equal between the French and Germans in terms of workshare and employment. It would seem that this is an underlying goal which must be met before more business like ones.

Ruscoe
 
gbfra
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RE: Eads To Reveal "Power8" Restructuring Imminently

Sun Jan 07, 2007 5:24 pm

[quote=NAV20,reply=37]Any of us who have ever been involved in industry will know that those aims - a 20% increase in productivity COMBINED with large annual cost savings, all achieved within a timescale of only three years - already look crazily over-optimistic.

Normally, even with goodwill and cooperation on all sides, including the unions, cumulative productivity increases of 1%-2% per annum would be good going. quote]

As a general comment on industry, this is just nonsense. Just ask private-equity-companies like Texas Pacific or KKR and they will tell you how to increase productivity dramatically in a short term. They are doing this all the time with the companies they own. It is often possible, of course.

Will Airbus be able to do likewise? They have to outsource production and let others, private-equity for example, do the dirty work. Why do you think they are planning to sell a couple of their plants in Germany? Besides, transfering production to low-cost-countries is another way to increase productivity (and reduce exchange-rate-risks), and I'm quite sure that you know this very well.
The fundamental things apply as time goes by
 
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RE: Eads To Reveal "Power8" Restructuring Imminently

Sun Jan 07, 2007 6:32 pm

Quoting Poitin (Reply 35):
And please don't believe that I like the trend to "contract workers." I don't, but it is the way things are going world wide. In Japan they are called "grey workers".

As an aside, I think this trend is one of the primary drivers of near incessant road congestion in the UK..  grumpy 

Quoting NAV20 (Reply 37):
Normally, even with goodwill and cooperation on all sides, including the unions, cumulative productivity increases of 1%-2% per annum would be good going. And even that would normally be accompanied by higher, not lower, short-term costs, since increased automation would be essential, and there will be an obvious need for redundancy compensation, re-training costs etc..

Most manufacturers that I've studied ROUTINELY aim for 3% - 5% LABOUR productivity per year. c. 3% is typically routinely achievable. Two capitalised words there...
ROTUINELY because in extremis, companies tend to be far more draconian in rationalising, like moving work down the supply chain, and transferring in-house work to lower cost regions/facilities . Of course that takes political will. I've no doubt many will argue that EADS don't have the political will instead of waiting to see what happens.
LABOUR because a 5% labour productivity improvement can change your overall cost base by as little as 1.5% - 2%. Material costs and overheads are EACH typically of the same order of magnitude as labour costs in complex businesses like this. Sometimes the gain is even less, if major capital costs, material cost increases, or increases in overheads are required to achieve the labour saving..
I was fortunate to be tasked with demonstrating that to achieve the 30% OVERALL like-for-like cost reduction from Trafalgar to Astute, we could eliminate labour costs altogether and still only just meet the target.

Quoting Ruscoe (Reply 38):
Especially when Airbus efficiency is already quite good. The figures I have been quoting illustrate that there is not a lot of fat in Airbus. The fat is elsewhere in EADS.

I'm inclined to agree with that.  checkmark 
Strangely, though, studies have also shown that generally, more efficient companies tend to be better at achieving further productivity improvements than less efficient ones - it's in the behaviour....  Smile

(BTW it's also easier when throughput is increasing  Wink )

A 20% improvement in LABOUR productivity in 4 years (including 2010 there...) is not impossible, but is a target at the top end of achieveable.

Regards
 
brilondon
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RE: Eads To Reveal "Power8" Restructuring Imminently

Sun Jan 07, 2007 6:40 pm

Quoting NAV20 (Reply 2):
Airbus hit the buffers in June 2006, and 'talks will begin' in February. Maybe it means that EADS/Airbus needs a minimum of eight months to decide anything?

 biggrin  This is the speed of government.  laughing 
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baroque
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RE: Eads To Reveal "Power8" Restructuring Imminent

Sun Jan 07, 2007 10:15 pm

Quoting Ruscoe (Reply 22):
Also in terms of the efficiency of their work, and I realise there are numerous parameters unaccounted for, it took 145 Airbus employees to produce one aircraft (54680 employees for 378 deliveries)whereas it took Boeing 171 employees to produce one aircraft. (49591 employees to produce 290 deliveries).

Keep going with the contrary stats Ruscoe, as Peter Costello and Paul Keating would say, a beautiful set of numbers!

Quoting Astuteman (Reply 32):
Don't know if we here in the UK would classify as "your European Friends", but you might want to exercise some care in painting with too broad a brush....

Last time I looked, which admittedly was in the Middle Cretaceous, the UK was firmly attached to Europe still, and there was very little movement on the Irish Sea spreading zone that had looked promising in the Upper Jurassic and could have removed some "difficult problems".

Quoting Astuteman (Reply 40):
I was fortunate to be tasked with demonstrating that to achieve the 30% OVERALL like-for-like cost reduction from Trafalgar to Astute, we could eliminate labour costs altogether and still only just meet the target.

I wonder if the folk who asked for that reduction were also under the impression that Nelson won the battle of Waterloo, whereas we know Nelson might have set up the battle but after that he rather lost and it was really Admiral Lord Collingwood who won. I wonder if Collingwood or Nelson is the better model for Airbus over the next few years!

Quoting Gbfra (Reply 34):

Even if some of our American and Australian friends on this forum seem to think we are living on the dark side of the moon here, in fact, we don't.

Here is one from upside down land who does not. The only thing I puzzle about is the deskilling that has occurred in Germany as a result of the early retirement schemes. As we commonly remark here, Gluekauf.
 
leelaw
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RE: Eads To Reveal "Power8" Restructuring Imminently

Sun Jan 07, 2007 10:53 pm

Quoting Baroque (Reply 42):
I wonder if the folk who asked for that reduction were also under the impression that Nelson won the battle of Waterloo, whereas we know Nelson might have set up the battle but after that he rather lost and it was really Admiral Lord Collingwood who won. I wonder if Collingwood or Nelson is the better model for Airbus over the next few years!

Weren't Nelson and Collingwood associated with the Battle of Trafalgar? IIRC, weren't they both long dead by the time of Waterloo, which BTW is some distance from the sea?
Lex Ancilla Justitiae
 
Lumberton
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RE: Eads To Reveal "Power8" Restructuring Imminent

Sun Jan 07, 2007 11:13 pm

Quoting Astuteman (Reply 40):
Of course that takes political will. I've no doubt many will argue that EADS don't have the political will instead of waiting to see what happens.

The 60 million euro question IMO. I, for one, will wait and see what happens. This could become an issue in the French elections this spring....Witness the fuss over layoffs at Sogerma awhile back.

[Edited 2007-01-07 15:13:52]
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Poitin
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RE: Eads To Reveal "Power8" Restructuring Imminently

Mon Jan 08, 2007 1:09 am

Quoting Ruscoe (Reply 36):
Yes that's what I meant.

As for Britain. Europe doesn't think Britain ois part of Europe, Britain doesn't think Britain is part of Europe and the rest of the world doesn't think Britain is part of Europe, and if Bitain plays it's card right, then Bitain can become to Europe what Hong Kong was (is) to China, and prosper+++.

Ruscoe

So nothing has changed.  Big grin God Bless the Queen! (Victoria).

I guess that makes LHR the Kaitak of Europe.
Now so, have ye time fer a pint?
 
Ruscoe
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RE: Eads To Reveal "Power8" Restructuring Imminently

Mon Jan 08, 2007 5:44 am

Quoting Poitin (Reply 45):
So nothing has changed. God Bless the Queen! (Victoria).

Thats very clever and funny also.  Smile

Ruscoe
 
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RE: Eads To Reveal "Power8" Restructuring Imminent

Mon Jan 08, 2007 5:53 am

Hmmmm,

Sounds like a sequel to the infamous TQMS program...

Time will tell..

RS

PS. Total Quality Management System, a.k.a Time to Quit and Move to Seattle
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mariner
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RE: Eads To Reveal "Power8" Restructuring Imminently

Mon Jan 08, 2007 6:01 am

Quoting Mariner (Reply 21):
Impending major job losses in a major Australian corporation would involve a great deal of "discussion" with government.

And just for the record, that "discussion with government" has already begun in the case of the Qantas take-over:

http://www.theage.com.au/news/Nation...alia/2007/01/08/1168104889846.html

mariner
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NAV20
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RE: Eads To Reveal "Power8" Restructuring Imminently

Mon Jan 08, 2007 11:58 am

Quoting Astuteman (Reply 40):
BTW it's also easier when throughput is increasing )

A 20% improvement in LABOUR productivity in 4 years (including 2010 there...) is not impossible, but is a target at the top end of achieveable.

I think the 'throughput' point is the key, Astuteman.

It's one thing to persuade the unions to accept fewer NEW jobs during an expansion. Quite another to seek their agreement to firing people in order to achieve the same output with 20% fewer people.

Quoting Astuteman (Reply 40):
in 4 years (including 2010 there...)

Sorry, no, mate. The timetable above indicates that even preliminary discussions won't be concluded until end March 2007 at the earliest. Say mid-2007 before any re-structuring is in full swing. And don't forget that EADS' June announcement said 2010 would be 'recovery year,' with all the problems sorted out, no less than 45 X A380s being produced and delivered, and positive cash flow achieved. So a bare three years, even if the unions and the politicos agree 'Power 8' by mid-2007.

Looks like there's pretty general agreement that 'Power 8' looks overly optimistic. If Airbus management is doing its job properly (a large assumption, perhaps) they will know that as well as we do, and will have a contingency plan ready in case 'Power 8' (as is likely) turns out to achieve 'to little, too late.'

Anyone care to speculate what that 'Plan B' contains?

[Edited 2007-01-08 04:13:35]
"Once you have flown, you will walk the earth with your eyes turned skywards.." - Leonardo da Vinci