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WIederling
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Re: Airbus strategy review augurs clean break under new CEO

Fri Dec 14, 2018 6:56 pm

mxaxai wrote:
Looking at Boeing, their 737 fuselage is assembled in Wichita, Kansas, and brought to Seattle by train. Another legacy that probably brings its own limitations.


Gunshot wounds and boating trips to nowhere come to mind.

Are the 737 fuselages still unstuffed when delivered to the B FAL?
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seahawk
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Re: Airbus strategy review augurs clean break under new CEO

Fri Dec 14, 2018 7:19 pm

For the moment Brexit is the biggest hurdle. In a no deal, Airbus will want to open a new factory for wings, so any new wing will have to wait for that decision. (and plenty of places are already trying to get the new factory)
 
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Revelation
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Re: Airbus strategy review augurs clean break under new CEO

Fri Dec 14, 2018 7:26 pm

WIederling wrote:
Revelation wrote:
Wiederling wrote:
Boeing is in search for a better PR company.

............. , followed by a cheap shot.


Not at all.
Boeing has not manged to repeat the PR glory that was the Dreamliner's Druglike Rush.

MoM is lackluster. New, better PR company needed. ( though I think the MoM tag is burned already.)

Feel free to focus on the PR stuff.

Personally, I'll focus on the 787th ship built, 1400 orders, record widebody production rate, etc.
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JoeCanuck
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Re: Airbus strategy review augurs clean break under new CEO

Fri Dec 14, 2018 9:03 pm

Revelation wrote:
CFRPwingALbody wrote:
I think Airbus is facing several problems:
1) Huge demand for A320NEO and A350, thus huge backlogs, projects in ramp-up.
2) Engine (delivery) problems (A320NEO and A330NEO) hopefully soon a story of the past.
3) Low demand for A380s and A330CEO (? & A330NEO)
4) Brexit uncertainties in how the (re)introduction of a EU-UK border will effect logistics.
5) A400M development and demand problems (off topic?)
6) C-Series/A220 program takeover, and how to fulfill the commitments promised by Bombardier.

Great list.

I would add:

7) Continuation of transition to "big data" analytics world (see the Airbus production improvements thread)
8) Transition to "life cycle" revenue model, i.e. squeezing the traditional vendor ecosystem (see the Airbus new CEO / management thread).



I would also add;

9) One advantage Boeing has over Airbus is that there aren't any huge national protests/riots in the US on economic issues that could disrupt production or expansion. The Yellow Jacket protesters, and other protesters like it, too often shut down or otherwise disrupt industries in the EU. Even if they don't have the impact implied in news reports, the perception is that they are hugely disruptive.

When the president of the country has to get directly involved in negotiating with protesters, it is a very big deal. Every time they get issued concessions, it's positive reinforcement that national scale, sometimes violent protests work...which is not good for business, investor and customer confidence.

I strongly suspect if Airbus dared to move any production out of France or even build factories in lower cost countries in the EU, it would spark riots.
What the...?
 
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lightsaber
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Re: Airbus strategy review augurs clean break under new CEO

Sat Dec 15, 2018 12:42 am

seahawk wrote:
For the moment Brexit is the biggest hurdle. In a no deal, Airbus will want to open a new factory for wings, so any new wing will have to wait for that decision. (and plenty of places are already trying to get the new factory)

In a no deal, the biggest worry should be continental corporation financing. This includes Airbus. A no deal has major implications for borrowing costs through Europe.

It is far faster to destroy jobs than move them.

Airbus needs to reduce costs, accelerate development, and sell. But Brexit became an excercise where France, Spain, and Germany seem willing to ignore consequences and what is politically achievable.

In no way will any company voluntarily surrender IP. You will not get a continental FADAQ quickly. What is Airbus widebody production without RR? Ummm... Heading to 100% RR there. In this era of patents, you cannot just force a production move. Some stuff, yes. Wings? Probably not quickly.

The process needs simplification. Cheaper transportation of major assemblies. More flexible production at Toulouse. More automation.

Most of all sanity of production. Someone has to explain A380 continued production to me. At this point it is a gift to EK and I do not see how avoiding an accounting day of recogning is helping when the staff could make A321s or more A350s.

I'm happy to see Airbus opperated as a business.

Lightsaber
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WIederling
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Re: Airbus strategy review augurs clean break under new CEO

Sat Dec 15, 2018 9:30 am

JoeCanuck wrote:
9) One advantage Boeing has over Airbus is that there aren't any huge national protests/riots in the US on economic issues that could disrupt production or expansion. The Yellow Jacket protesters, and other protesters like it, too often shut down or otherwise disrupt industries in the EU. Even if they don't have the impact implied in news reports, the perception is that they are hugely disruptive.

Much less of an issue than you may think. Look at days lost to strikes vs days lost to holidays or illness.

Strikes at Boeing looked a lot more "disturbing" and management as well union behavior destructive/disruptive.

JoeCanuck wrote:
When the president of the country has to get directly involved in negotiating with protesters, it is a very big deal.

It is the presidents program. Obviously protesters will go to the president. this is not an administrative issue.
JoeCanuck wrote:
I strongly suspect if Airbus dared to move any production out of France or even build factories in lower cost countries in the EU, it would spark riots.

That has been effective for many years going back to Comecon times.
Guess where Dacia, Renault and Toyota have factories. ( And guess where Neckermann, Quelle and Ikea got their kitchen appliances, Radios, TVs and furniture :-)

~= zero riots. ( except maybe overseas where people take Fox News for the truth and really get agitated.)
Murphy is an optimist
 
WIederling
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Re: Airbus strategy review augurs clean break under new CEO

Sat Dec 15, 2018 9:56 am

Revelation wrote:
Personally, I'll focus on the 787th ship built, 1400 orders, record widebody production rate, etc.

And 1800++ orders needed to make any profit at all.
Murphy is an optimist
 
Eyad89
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Re: Airbus strategy review augurs clean break under new CEO

Sat Dec 15, 2018 12:17 pm

Revelation wrote:

I found it interesting how focused it was on the narrowbody family when you can make the argument that Airbus is leaving the most money on the table in the widebody space.



Does most of the money come from the widebody space?

Even if widebodies generate more profit margin per frame (I am not sure that they do), the volume difference between the two would definitely make the 737/A320 the cash cows for both of Airbus and Boeing IMO.

Boeing backlog:
737: 4664
widebodies: 1183

Airbus backlog:
A320: 6141
widebodies: 1119

- I would guess both of the companies can see that most of the money is actually in the narrobody segment, unless each widebody generate at least 4.5-6 times more profit margin than what the narrowbodies can. The 60 frame/month rate really drives costs down, I don't have the numbers, but I would be shocked if widebodies can achieve profit margins that are 5-6 times greater, especially when considering their monthly production rates.

- I don't think Airbus is leaving that much money on the table as you put it when it comes to widebodies. Their backlogs are almost equal. Their 787/A350 are both selling extremely well, and their 77X/A330neo are both struggling. This leaves Airbus with the terrible condition of A380, this would break the tie and place Boeing in a slightly better position in this segment. But that is far from Airbus leaving most of the money on the table for Boeing.
 
bigjku
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Re: Airbus strategy review augurs clean break under new CEO

Sat Dec 15, 2018 1:15 pm

Eyad89 wrote:
Revelation wrote:

I found it interesting how focused it was on the narrowbody family when you can make the argument that Airbus is leaving the most money on the table in the widebody space.



Does most of the money come from the widebody space?

Even if widebodies generate more profit margin per frame (I am not sure that they do), the volume difference between the two would definitely make the 737/A320 the cash cows for both of Airbus and Boeing IMO.

Boeing backlog:
737: 4664
widebodies: 1183

Airbus backlog:
A320: 6141
widebodies: 1119

- I would guess both of the companies can see that most of the money is actually in the narrobody segment, unless each widebody generate at least 4.5-6 times more profit margin than what the narrowbodies can. The 60 frame/month rate really drives costs down, I don't have the numbers, but I would be shocked if widebodies can achieve profit margins that are 5-6 times greater, especially when considering their monthly production rates.

- I don't think Airbus is leaving that much money on the table as you put it when it comes to widebodies. Their backlogs are almost equal. Their 787/A350 are both selling extremely well, and their 77X/A330neo are both struggling. This leaves Airbus with the terrible condition of A380, this would break the tie and place Boeing in a slightly better position in this segment. But that is far from Airbus leaving most of the money on the table for Boeing.


I am not sure the A350 is selling well anymore. It isn’t an issue yet but the last 4 year trends aren’t great for that program either. Since first delivery it’s averaging 15 or so net orders a year. And has been around 35 or so last two years. The 787 is right around 75 net per year with a two year average around 100. Frankly I think the dropping price of the 787 causes problems for them. I also think the product itself is poorly suited for evolving engines and any NEO program benefits the 787 much more than the A350. There was a hoped for rate increase above the 10 per month that doesn’t appear to be happening near as I can tell. None of it’s a problem right this minute. But sell 36 a year over the next 18-24 months and it will be.
 
Eyad89
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Re: Airbus strategy review augurs clean break under new CEO

Sat Dec 15, 2018 1:40 pm

bigjku wrote:

I am not sure the A350 is selling well anymore. It isn’t an issue yet but the last 4 year trends aren’t great for that program either. Since first delivery it’s averaging 15 or so net orders a year. And has been around 35 or so last two years. The 787 is right around 75 net per year with a two year average around 100. Frankly I think the dropping price of the 787 causes problems for them. I also think the product itself is poorly suited for evolving engines and any NEO program benefits the 787 much more than the A350. There was a hoped for rate increase above the 10 per month that doesn’t appear to be happening near as I can tell. None of it’s a problem right this minute. But sell 36 a year over the next 18-24 months and it will be.


When the A350 was launched in 2007, 787 had a total number of orders of around 500 frames. Fast forward to December 2018, the difference between the two is still 500 orders. So the order gap has been constant even since the A350 was launched. This tells you both planes have sold the same number of planes since 2007. A350 sales might have been stagnant in the last couple of years, but so was the 787 in other periods. Each has to go through their own cycles.
 
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seahawk
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Re: Airbus strategy review augurs clean break under new CEO

Sat Dec 15, 2018 1:46 pm

lightsaber wrote:
seahawk wrote:
For the moment Brexit is the biggest hurdle. In a no deal, Airbus will want to open a new factory for wings, so any new wing will have to wait for that decision. (and plenty of places are already trying to get the new factory)

In a no deal, the biggest worry should be continental corporation financing. This includes Airbus. A no deal has major implications for borrowing costs through Europe.

It is far faster to destroy jobs than move them.

Airbus needs to reduce costs, accelerate development, and sell. But Brexit became an excercise where France, Spain, and Germany seem willing to ignore consequences and what is politically achievable.

In no way will any company voluntarily surrender IP. You will not get a continental FADAQ quickly. What is Airbus widebody production without RR? Ummm... Heading to 100% RR there. In this era of patents, you cannot just force a production move. Some stuff, yes. Wings? Probably not quickly.

The process needs simplification. Cheaper transportation of major assemblies. More flexible production at Toulouse. More automation.

Most of all sanity of production. Someone has to explain A380 continued production to me. At this point it is a gift to EK and I do not see how avoiding an accounting day of recogning is helping when the staff could make A321s or more A350s.

I'm happy to see Airbus opperated as a business.

Lightsaber


The question is not to move the existing facilities (yet), the question is where you will built wings for future projects/versions. And RR is already making moves to switch some things to Germany.
 
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Revelation
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Re: Airbus strategy review augurs clean break under new CEO

Sat Dec 15, 2018 2:02 pm

WIederling wrote:
Revelation wrote:
Personally, I'll focus on the 787th ship built, 1400 orders, record widebody production rate, etc.

And 1800++ orders needed to make any profit at all.

See, the PR is working! :wink2:
Wake up to find out that you are the eyes of the world
The heart has its beaches, its homeland and thoughts of its own
Wake now, discover that you are the song that the morning brings
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Re: Airbus strategy review augurs clean break under new CEO

Sat Dec 15, 2018 2:38 pm

Eyad89 wrote:
Does most of the money come from the widebody space?

Even if widebodies generate more profit margin per frame (I am not sure that they do), the volume difference between the two would definitely make the 737/A320 the cash cows for both of Airbus and Boeing IMO.

Boeing backlog:
737: 4664
widebodies: 1183

Airbus backlog:
A320: 6141
widebodies: 1119

- I would guess both of the companies can see that most of the money is actually in the narrobody segment, unless each widebody generate at least 4.5-6 times more profit margin than what the narrowbodies can. The 60 frame/month rate really drives costs down, I don't have the numbers, but I would be shocked if widebodies can achieve profit margins that are 5-6 times greater, especially when considering their monthly production rates.

- I don't think Airbus is leaving that much money on the table as you put it when it comes to widebodies. Their backlogs are almost equal. Their 787/A350 are both selling extremely well, and their 77X/A330neo are both struggling. This leaves Airbus with the terrible condition of A380, this would break the tie and place Boeing in a slightly better position in this segment. But that is far from Airbus leaving most of the money on the table for Boeing.

In rough terms, your numbers give narrowbody backlog +30% for A, widebody +5% for Boeing.

Boeing's higher production rate means slots will open sooner so orders can be added more easily.

The focus on 787 raises production volume and lowers cost, Airbus splits this across A330neo and A350 because they overlap.

787 is adding orders briskly, A350 and A330neo are not.

Airbus's backlog includes 41 A380s not likely to be delivered (Amedeo, QF, unidentified, Air Accord) and EK is now very late signing for engines so 20+18 are at risk.

A380 is making losses for each frame it builds (!) and will need major and risky investment to change that situation, so there is a real strategy challenge to be addressed.

777X has yet to prove itself. It could end up a problem child or it could do well. Strategically, the decision is already made.

A380 definitely is a problem child, A330neo seems to be. The data is in, strategy decisions need to be made.

The new CEO is chosen, it's time for the Next Chapter, he wants to move fast. Grab your popcorn, everyone!
Wake up to find out that you are the eyes of the world
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cledaybuck
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Re: Airbus strategy review augurs clean break under new CEO

Sat Dec 15, 2018 3:34 pm

WIederling wrote:
Revelation wrote:
Personally, I'll focus on the 787th ship built, 1400 orders, record widebody production rate, etc.

And 1800++ orders needed to make any profit at all.

Still beats having a few hundred orders, about as slow a production rate as possible, and never making any money.
As we celebrate mediocrity, all the boys upstairs want to see, how much you'll pay for what you used to get for free.
 
JoeCanuck
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Re: Airbus strategy review augurs clean break under new CEO

Sat Dec 15, 2018 5:01 pm

WIederling wrote:
JoeCanuck wrote:
9) One advantage Boeing has over Airbus is that there aren't any huge national protests/riots in the US on economic issues that could disrupt production or expansion. The Yellow Jacket protesters, and other protesters like it, too often shut down or otherwise disrupt industries in the EU. Even if they don't have the impact implied in news reports, the perception is that they are hugely disruptive.

Much less of an issue than you may think. Look at days lost to strikes vs days lost to holidays or illness.

Strikes at Boeing looked a lot more "disturbing" and management as well union behavior destructive/disruptive.

JoeCanuck wrote:
When the president of the country has to get directly involved in negotiating with protesters, it is a very big deal.

It is the presidents program. Obviously protesters will go to the president. this is not an administrative issue.
JoeCanuck wrote:
I strongly suspect if Airbus dared to move any production out of France or even build factories in lower cost countries in the EU, it would spark riots.

That has been effective for many years going back to Comecon times.
Guess where Dacia, Renault and Toyota have factories. ( And guess where Neckermann, Quelle and Ikea got their kitchen appliances, Radios, TVs and furniture :-)

~= zero riots. ( except maybe overseas where people take Fox News for the truth and really get agitated.)


Yah. Boeing labor negotiations and the yellow vest riots are just the same. Fake news. No problem. Nothing to see. Just a bunch of folks having a civilized negotiation with the country's president.

https://www.buzzfeednews.com/article/ry ... s-facebook

Image
What the...?
 
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keesje
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Re: Airbus strategy review augurs clean break under new CEO

Sat Dec 15, 2018 7:07 pm

The A330NEO got delayed a year because of the engines.

This the A330NEO backlog, 14 customers.

Image
"Never mistake motion for action." Ernest Hemingway
 
parapente
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Re: Airbus strategy review augurs clean break under new CEO

Sat Dec 15, 2018 7:12 pm

As many have said the problem with the 330neo is that it was about 3 years late.
The more fundamental question is why and what that means for the quality future planning.
The reason it was late was for some extraordinary and inexplicable reason someone/some group of marketing bods actually though that a 350-8 could compete with a 787.How did they possibly think this? One can only hope these people have now gone so such a horrendous mistake can be made again.
 
VV
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Re: Airbus strategy review augurs clean break under new CEO

Sat Dec 15, 2018 7:17 pm

So, the new CEO is reviewing the overall strategy. There is nothing wrong with it.

Nobody knows if he will request a new strategy or if they will follow the strategy defined so far.

A strategy is by definition a long term thing, so there HAS TO be a strategy today. If it is not the case then it is an issue generated by past management.

So in my opinion there is absolutely nothing to comment so far. This whole brouhaha in this thread is completely sterile.
 
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EightyFour
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Re: Airbus strategy review augurs clean break under new CEO

Sat Dec 15, 2018 7:29 pm

VV wrote:
So, the new CEO is reviewing the overall strategy. There is nothing wrong with it.

Nobody knows if he will request a new strategy or if they will follow the strategy defined so far.


A strategy is by definition a long term thing, so there HAS TO be a strategy today. If it is not the case then it is an issue generated by past management.

So in my opinion there is absolutely nothing to comment so far. This whole brouhaha in this thread is completely sterile.


Bolding mine. But this is exactly why this makes the discussion so interesting to me. With the new CEO Airbus seems to be at a crossroads and discussing the previous strategy and how it might change in the future due to challenges and opportunities is worthwhile whether the posters here have inside knowledge or not. That being said, the thread would be even better if certain posters (not necessarily you) who are offended by any notion that their preferred airframer isn't perfect stayed away.
 
VV
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Re: Airbus strategy review augurs clean break under new CEO

Sat Dec 15, 2018 8:06 pm

EightyFour wrote:
Bolding mine. But this is exactly why this makes the discussion so interesting to me. With the new CEO Airbus seems to be at a crossroads and discussing the previous strategy and how it might change in the future due to challenges and opportunities is worthwhile whether the posters here have inside knowledge or not. That being said, the thread would be even better if certain posters (not necessarily you) who are offended by any notion that their preferred airframer isn't perfect stayed away.


As previously mentioned, a strategy is a long term concept. So there HAS TO be a current strategy that is being executed by the executives.

If someone decides to run a review then most probably the person has some doubt on the current strategy. Or perhaps the person wants to know the current strategy because the person does not know it, but this raises the question as what the heck the person is doing as an executive.

Obviously the news raises questions that are quite difficult to answer. Whatever the real reason is for this "strategy review", it is weird and does not merit any comment at this stage.
 
WIederling
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Re: Airbus strategy review augurs clean break under new CEO

Sat Dec 15, 2018 8:32 pm

parapente wrote:
... though that a 350-8 could compete with a 787.How did they possibly think this? ...


Going by A359 performance vs the 787-9/-10
the original bespoke version of the A358XWB would have made mince meat of the 789.
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JayinKitsap
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Re: Airbus strategy review augurs clean break under new CEO

Sat Dec 15, 2018 8:44 pm

This article is from a year ago, has Airbus both fixed and got back to speed its sales side? In many countries the only way to do business is with bribes and kickbacks, not good but it is very hard for the seller to make sales and not play that game. I personally do not think that JL, the master salesman, did himself but he probably looked the other way, thinking it was the only way to make that sale. Also, for any company to make a sale of 100 units to a firm with less than 100 in operation, either the price or the credit terms or both were rock bottom. Could he have sold 'at cost' some large quantity, that works as long as production is running fine but if there are snags on the line it can be quite easy to have a -5% margin on certain orders.

https://www.reuters.com/article/us-airb ... SKBN1E71J7

https://eandt.theiet.org/content/articl ... ead-to-us/

https://www.handelsblatt.com/today/comp ... 21RqwS-ap3

There were two prior major reorganizations when EADS was formed, and when it went away to the current Airbus structure, which is greatly improved, but we are in the middle of another one currently. Can and will Airbus become stronger and better, I hope it does.

Boeing is not immune to this kind of thing, probably just between scandals at the moment. The Druyun affair was intermixed with another affair too. Boeing went thru Strontz - Condit - Stonecipher - Platt - Bell - McNerney in the period 96 to 05. Also in this period was the 1997 production snarl up and huge loss.

https://en.wikipedia.org/wiki/Darleen_Druyun
 
2175301
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Re: Airbus strategy review augurs clean break under new CEO

Sat Dec 15, 2018 9:00 pm

VV wrote:
Obviously the news raises questions that are quite difficult to answer. Whatever the real reason is for this "strategy review", it is weird and does not merit any comment at this stage.


Actually, it is not weird at all and is quite typical for a new CEO to ask for a strategy review. The CEO is in fact responsible for the future direction of the company, and any good one needs to be sure of their basis. How much Airbus will change strategy from the past is unknown; it may not change at all, it might change a bit (fine tune it), it might change a lot. However, if a CEO wishes to do a major change then the timing would be after a formal comprehensive strategy review. As other posters have identified, a new CEO has an opportunity to make major changes with less questions than a well established one.

I would not even consider the announcement that there is this strategy review and key topics to be reviewed as unusual. That is typically done by many companies where their might be major changes (and the reviews do not always result in major changes). Otherwise, you often hear from various companies that a change was done based on a strategy review that was not so well publicized up front.

A good strategy review will look at every program, and the various stages of R&D and marketing. I would expect that some of the programs, R&D, and marketing will be reviewed less than others where there appear to be apparent questions or a future. That is typical.

As for this thread and what has been discussed in it. I believe the thread is appropriate, and it appears to me that the publicly known major areas with questions have been identified and discussed in this thread; which I feel to be appropriate. How the Airbus internal review - which has access to more information - will view these areas and their recommendations is unknown. But, it is worth discussing the known areas where there are questions or apparent issues as this is an Aviation Interest Forum.

Have a great day,
 
WPvsMW
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Re: Airbus strategy review augurs clean break under new CEO

Sat Dec 15, 2018 9:06 pm

Revelation wrote:
Amazingly, despite the focus on narrowbody, no mention of A320.5 or A322 either! :biggrin:


Airbus can ignore Keesje's A322 designs at its peril.
 
cledaybuck
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Re: Airbus strategy review augurs clean break under new CEO

Sat Dec 15, 2018 9:22 pm

keesje wrote:
The A330NEO got delayed a year because of the engines.

This the A330NEO backlog, 14 customers.

Image

It’s amazing how the A330neo and 777x backlogs keep going up. I’m sure it has nothing to do with not delivering any.
As we celebrate mediocrity, all the boys upstairs want to see, how much you'll pay for what you used to get for free.
 
Planeflyer
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Re: Airbus strategy review augurs clean break under new CEO

Sat Dec 15, 2018 9:33 pm

VV wrote:
EightyFour wrote:
Bolding mine. But this is exactly why this makes the discussion so interesting to me. With the new CEO Airbus seems to be at a crossroads and discussing the previous strategy and how it might change in the future due to challenges and opportunities is worthwhile whether the posters here have inside knowledge or not. That being said, the thread would be even better if certain posters (not necessarily you) who are offended by any notion that their preferred airframer isn't perfect stayed away.


As previously mentioned, a strategy is a long term concept. So there HAS TO be a current strategy that is being executed by the executives.

If someone decides to run a review then most probably the person has some doubt on the current strategy. Or perhaps the person wants to know the current strategy because the person does not know it, but this raises the question as what the heck the person is doing as an executive.

Obviously the news raises questions that are quite difficult to answer. Whatever the real reason is for this "strategy review", it is weird and does not merit any comment at this stage.


Given the poor cash generation and programs such as 330 and 380 that are currently drags on the overall business either the current strategy isn’t working or isn’t being followed

Probably a combination of the two.
 
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keesje
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Re: Airbus strategy review augurs clean break under new CEO

Sat Dec 15, 2018 9:36 pm

A220 they sold a few to Delta and Jetblue, modern A319 replacement 120-160 seats.
A320 outselling 737-8, + the A321s + options.
A330 picking up orders, 230 in backlog. Growing A330 replacement market.
A350-900, -1000, segment leaders.
A380 low rate production. ANA this week.
Helicopters: marketleader.
Defense: MRTT market leader, A400m: no competition.

Record backlog, deliveries, profit.
This company really needs a strategic make-over. :ouch:
.

..
.


:rotfl:
keep hoping
Last edited by keesje on Sat Dec 15, 2018 9:55 pm, edited 1 time in total.
"Never mistake motion for action." Ernest Hemingway
 
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Taxi645
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Re: Airbus strategy review augurs clean break under new CEO

Sat Dec 15, 2018 9:53 pm

As said above, any healthy bussiness has a regular strategy review. You want to make sure that the facts, projections, developments, assesments, threats and opportunities etc. that were the basis or consequence of said strategy are still correct. Such a review can be caused by a significant event, but could also be just periodic.
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Revelation
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Re: Airbus strategy review augurs clean break under new CEO

Sat Dec 15, 2018 10:11 pm

keesje wrote:
This company really needs a strategic make-over. :ouch:


:rotfl:
keep hoping

It is you who keeps trying to show Airbus the error of their ways with regard to A320.5 and A322, maybe this strategic make-over is your chance? :ouch:


:rotfl:
keep hoping
Last edited by Revelation on Sat Dec 15, 2018 10:35 pm, edited 1 time in total.
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Re: Airbus strategy review augurs clean break under new CEO

Sat Dec 15, 2018 10:16 pm

parapente wrote:
As many have said the problem with the 330neo is that it was about 3 years late.
The more fundamental question is why and what that means for the quality future planning.
The reason it was late was for some extraordinary and inexplicable reason someone/some group of marketing bods actually though that a 350-8 could compete with a 787.How did they possibly think this? One can only hope these people have now gone so such a horrendous mistake can be made again.

I may have missed something as a lot of these decisions went down when I was in medical school (ie studying all the time), but before that, Airbus pitched what has effectively become the A330neo around the time of the 787 launch—anyone else remember the much maligned comment about Airbus only needing to utilize new engines on the existing A330 aircraft. And airlines said thanks no thanks, leading to the A350. Fast forward and the 787 is delayed and suddenly the A330neo has an arguable business case. But is it fair to say the aircraft was late, when in reality it was offered basically from day one but not enough airlines wanted to buy it?
 
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Re: Airbus strategy review augurs clean break under new CEO

Sat Dec 15, 2018 10:39 pm

keesje wrote:
A220 they sold a few to Delta and Jetblue, modern A319 replacement 120-160 seats.
A320 outselling 737-8, + the A321s + options.
A330 picking up orders, 230 in backlog. Growing A330 replacement market.
A350-900, -1000, segment leaders.
A380 low rate production. ANA this week.
Helicopters: marketleader.
Defense: MRTT market leader, A400m: no competition.

Record backlog, deliveries, profit.
This company really needs a strategic make-over. :ouch:
.

..
.


:rotfl:
keep hoping


Selling and building a big backlog is not and has not been the problem for Airbus.

But its growth has been punctuated by Franco-German tensions, personal rivalries and most recently a crippling bribery investigation that accelerated management departures.

The review may address how Airbus can meet demand by sharply ramping up production of jets like its A320. One previous taboo that may come up for discussion is a fragmented production system securing jobs in Britain, France, Germany and Spain.


https://www.reuters.com/article/us-airb ... SKBN1OC16X

Bragging about the backlog and success of the sales team won’t address production challenges, management departures and the bribery scandal. I hope Guillaume Faury is taking the industrial challenges that Airbus faces more seriously than you. Airplanes aren’t built using photoshop
Last edited by Newbiepilot on Sat Dec 15, 2018 10:42 pm, edited 1 time in total.
 
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Re: Airbus strategy review augurs clean break under new CEO

Sat Dec 15, 2018 10:40 pm

Revelation wrote:
keesje wrote:
This company really needs a strategic make-over. :ouch:


:rotfl:
keep hoping

It is you who keeps trying to show Airbus the error of their ways with regard to A320.5 and A322, maybe this strategic make-over. is your chance? :ouch:


:rotfl:
keep hoping


I've predicted this almost a decade. Earlier this year Reuters reported Airbus was working on both "A320.5" and "A322" So Revelation, you might consider being a bit carefull dimissing it, Google has a good memory. :wink2:

The surprise decision to back away from the proposed “A320neo-plus” and “A321neo-plus,” which would lengthen and modernize both models, comes as Airbus (AIR.PA) continues to face problems in increasing output for the current versions.
https://www.reuters.com/article/us-airbus-a320-exclusive/exclusive-airbus-suspends-a320-revamp-study-amid-output-problems-idUSKBN1HH1SS
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Re: Airbus strategy review augurs clean break under new CEO

Sat Dec 15, 2018 10:57 pm

Planeflyer wrote:
Given the poor cash generation and programs such as 330 and 380 that are currently drags on the overall business either the current strategy isn’t working or isn’t being followed

Probably a combination of the two.


Okay, that's another point.

If the generated profit is not good enough, is it about the product strategy or is it about execution?
Many people think the strategy from product perspective is good enough because they have so big backlog. If the operarting margin is only about 5% and with negative cash flow, is that because the execution has not been stellar? Do they really need to review the strategy or just to improve the productivity?

Which part of the strategy are we talking about here? Is it industrial strategy, product strategy or is it other aspects?
In my opinion at this stage there is not matter for comment, until someone provides more clarity what they mean by a "strategy review".
 
AngMoh
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Re: Airbus strategy review augurs clean break under new CEO

Sat Dec 15, 2018 11:04 pm

This has become a ridiculous discussion and it seems nobody is working in engineering or manufacturing.

I think the original article is capturing the core issue: Airbus recognising they are running behind on manufacturing processes and design for manufacturing. The 787 outsells the A330neo by a lot not because of of superior strategy by Boeing. It outsells because it is a newer platform which can be put together quicker and faster. When Boeing did not have the 787 manufacturing under control, the A330ceo did very well. Now it is under control, costs have dropped enormously and they are being delivered like narrow bodies. This is not sexy work: it is a never ending job with lots of blood, sweat and tears.

It is far less sexy to talk about DFM (Design For Manufacturing) than to talk about optimised airflow around the wing root which improves fuel efficiency by 1%. But the first one can completely make or break a product.

For the 777X, the stories you read are not how great and efficient a flying unicorn it is, but automation, automation and more manufacturing automation.

The BBD C-Series was ground breaking but it could not be manufactured and sold cheaply enough. Even as the A220, it does not sell yet. It needs to be cheaper and that is not only the manufacturing itself but the whole supply chain. Why do you think all suppliers are being terrorised by Boeing in the "partnership for success"? Because in the end money talks.

Reading all these comments how rubbish RR, P&W and GE/CFM are because there groundbreaking, high risk, technically state of the art engines are not perfect out of the box shows that people don't have any clue what goes into developing them. They are bleeding edge products and bleeding edge refers to the people who work on these projects. Working on such a project makes you proud to work on the greatest technology and in exchange there is no work/life balance at all. All work, with evenings, weekends and holidays burnt (and this for years in a row) when the next issue comes up, the next supplier has a problem or new cost reduction target needs to be met.

Having the "best" product is of no use if you can not manufacture it efficiently and cheaply enough and keep it running reliably.

Execution eats strategy for lunch. At the moment Boeing executes better than Airbus. And Airbus knows that.
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Re: Airbus strategy review augurs clean break under new CEO

Sat Dec 15, 2018 11:06 pm

Yellowstone 1,2, and 3
And then 737, 787, 777, and 748 (with an NSA projected)
Now 737, 797, 787(including a 10), 777X

And this has just been since I have been a member here. Air-frame people should not be surprised that the arrows and slings of outrageous fortune require changes in strategy from time to time. It is not, in any sense, a criticism of Airbus. I realize there will be non-believers.
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Re: Airbus strategy review augurs clean break under new CEO

Sat Dec 15, 2018 11:15 pm

AngMoh wrote:
This has become a ridiculous discussion and it seems nobody is working in engineering or manufacturing.

I think the original article is capturing the core issue: Airbus recognising they are running behind on manufacturing processes and design for manufacturing. The 787 outsells the A330neo by a lot not because of of superior strategy by Boeing. It outsells because it is a newer platform which can be put together quicker and faster. When Boeing did not have the 787 manufacturing under control, the A330ceo did very well. Now it is under control, costs have dropped enormously and they are being delivered like narrow bodies. This is not sexy work: it is a never ending job with lots of blood, sweat and tears.

It is far less sexy to talk about DFM (Design For Manufacturing) than to talk about optimised airflow around the wing root which improves fuel efficiency by 1%. But the first one can completely make or break a product.

For the 777X, the stories you read are not how great and efficient a flying unicorn it is, but automation, automation and more manufacturing automation.

The BBD C-Series was ground breaking but it could not be manufactured and sold cheaply enough. Even as the A220, it does not sell yet. It needs to be cheaper and that is not only the manufacturing itself but the whole supply chain. Why do you think all suppliers are being terrorised by Boeing in the "partnership for success"? Because in the end money talks.

Reading all these comments how rubbish RR, P&W and GE/CFM are because there groundbreaking, high risk, technically state of the art engines are not perfect out of the box shows that people don't have any clue what goes into developing them. They are bleeding edge products and bleeding edge refers to the people who work on these projects. Working on such a project makes you proud to work on the greatest technology and in exchange there is no work/life balance at all. All work, with evenings, weekends and holidays burnt (and this for years in a row) when the next issue comes up, the next supplier has a problem or new cost reduction target needs to be met.

Having the "best" product is of no use if you can not manufacture it efficiently and cheaply enough and keep it running reliably.

Execution eats strategy for lunch. At the moment Boeing executes better than Airbus. And Airbus knows that.


I agree with you. They sexy and exciting conversations are about design improvement, orders and product strategy. In reality the manufacturing, engineering, supplier oversight, and customer support are far more crucial. It requires massive work, intellectual capacity, and expertise in problem solving to keep the production line moving efficiently and profitably. What is actually going on with the production line is rarely reported on. This article has been intriguing.
 
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Re: Airbus strategy review augurs clean break under new CEO

Sun Dec 16, 2018 12:57 am

AngMoh wrote:
This has become a ridiculous discussion and it seems nobody is working in engineering or manufacturing.

I think the original article is capturing the core issue: Airbus recognising they are running behind on manufacturing processes and design for manufacturing. The 787 outsells the A330neo by a lot not because of of superior strategy by Boeing. It outsells because it is a newer platform which can be put together quicker and faster. When Boeing did not have the 787 manufacturing under control, the A330ceo did very well. Now it is under control, costs have dropped enormously and they are being delivered like narrow bodies. This is not sexy work: it is a never ending job with lots of blood, sweat and tears.

It is far less sexy to talk about DFM (Design For Manufacturing) than to talk about optimised airflow around the wing root which improves fuel efficiency by 1%. But the first one can completely make or break a product.

For the 777X, the stories you read are not how great and efficient a flying unicorn it is, but automation, automation and more manufacturing automation.

The BBD C-Series was ground breaking but it could not be manufactured and sold cheaply enough. Even as the A220, it does not sell yet. It needs to be cheaper and that is not only the manufacturing itself but the whole supply chain. Why do you think all suppliers are being terrorised by Boeing in the "partnership for success"? Because in the end money talks.

Reading all these comments how rubbish RR, P&W and GE/CFM are because there groundbreaking, high risk, technically state of the art engines are not perfect out of the box shows that people don't have any clue what goes into developing them. They are bleeding edge products and bleeding edge refers to the people who work on these projects. Working on such a project makes you proud to work on the greatest technology and in exchange there is no work/life balance at all. All work, with evenings, weekends and holidays burnt (and this for years in a row) when the next issue comes up, the next supplier has a problem or new cost reduction target needs to be met.

Having the "best" product is of no use if you can not manufacture it efficiently and cheaply enough and keep it running reliably.

Execution eats strategy for lunch. At the moment Boeing executes better than Airbus. And Airbus knows that.


I've seen the Lean production process improvements on the 737 FAL 20 years ago. That was a badly needed catch up, but no more than that. Have big changes been made since then? The first tiers like GE, UTC, interiors and system suppliers, CFM, Honeywell, Safran supply both.
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Re: Airbus strategy review augurs clean break under new CEO

Sun Dec 16, 2018 3:17 am

keesje wrote:

I've seen the Lean production process improvements on the 737 FAL 20 years ago. That was a badly needed catch up, but no more than that. Have big changes been made since then? The first tiers like GE, UTC, interiors and system suppliers, CFM, Honeywell, Safran supply both.


To answer your question, Here is some good information from 2016 on the automation of the 737 wing assembly. 90% of fasteners are now installed by machines.

http://www.youtube.com/watch?v=t7ix0t4ivE0

http://gigazine.net/gsc_news/en/2016102 ... ing-robot/

Image

Blue gate (gate) type robot is PAL. The structure is such that the main wing vertically enters the gap in the center, and the entire machine is assembled back and forth like a car wash machine at the gas station. Incidentally, although it is similar to a car wash machine, the size is about 6 meters high, and the weight is 60 metric tons of a huge robot.


Image


The robot will accurately determine the position of the fastener, open holes and silently combine the panel and spar with fasteners.
Image


At Boeing's factory, there was a main wing assembly line that was used since the 1960's, but in the current line which introduced a new robot, the time required for assembly has been reduced by 90%.

Since then automation has improved more with the 737MAX

https://www.seattletimes.com/business/b ... es-737max/


To increase 737 output by 36 percent over the next three years, Boeing at first thought to buy some more ASAT machines, which were designed and supplied in the late 1990s by Mukilteo-based engineering firm Electroimpact.

But Boeing realized it doesn’t have room. The ASAT machines are huge, with a tall, wide gantry straddling the 60-foot-long spar.

So all 10 of these machines will be phased out by year end, replaced by just two fully automated Spar Assembly Line (SAL) cells – newly designed by Electroimpact and already in place.

Each cell contains two Electroimpact drilling and fastening machines, much smaller than the ASAT machines, that zip along a single spar simultaneously, drilling and filling as they go

...

Improving human efficiency
The new SAL cells, occupying 80 percent less floor space than the ASAT machines they replace, are just the latest push in Renton’s drive toward automation.

In recent years, Boeing has transformed the way it installs systems in the 737 fuselages by shifting to a moving line. It also has automated the way it assembles the skin panels for the wings using huge Electroimpact machines.


Earlier, final assembly of the wings was made more efficient and more automated with a move from putting them together while hanging vertically in fixed tools to a more ergonomic and faster horizontal build line, in which the wings are assembled lying flat.


I assume this is the type of automation that the article is referring to
 
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Re: Airbus strategy review augurs clean break under new CEO

Sun Dec 16, 2018 5:07 am

"Newbiepilot"
nice information and pictures.. I used to manage parts for the wing line, it was a nightmare, and then all the riveting was done by hand.. a riveter on one side of the panel, a guy with a bucking bar on the other multiplied by five for each panel, and I think 12 panels in production at once.. was the loudest manufacturing facility in the US and the cause of many hearing problems.
 
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Re: Airbus strategy review augurs clean break under new CEO

Sun Dec 16, 2018 8:11 am

in comment #93 newbiepilot mentions the work done to automate 737 production. However, it is obvious in my view that 737 strategy has not moved since many years.

Yes, the productivity when they build 737s has been improved significantly. It started in the early 1990s when MIT and industries launched the "Lean Aerospace Initiative" project.

It seems the discussion here has been more about the execution than the strategy.

Does A320 product strategy need to change, maybe so. One this is more certain, it is the fact the productivity has to get better. Unfortunately productivity gain usually ends up with some job losses.

Their widebody strategy has been in execution since several years now (A350, A330neo ...) should they veer from the current strategy? Maybe, but one thing is certain. They need to improve the productivity such that the delivery rate increases further. It is all about execution of the strategy set forth by the previous management(s).
 
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Re: Airbus strategy review augurs clean break under new CEO

Sun Dec 16, 2018 8:46 am

keesje wrote:
A220 they sold a few to Delta and Jetblue, modern A319 replacement 120-160 seats.
A320 outselling 737-8, + the A321s + options.
A330 picking up orders, 230 in backlog. Growing A330 replacement market.
A350-900, -1000, segment leaders.
A380 low rate production. ANA this week.
Helicopters: marketleader.
Defense: MRTT market leader, A400m: no competition.

Record backlog, deliveries, profit.
This company really needs a strategic make-over. :ouch:

..
.


:rotfl:
keep hoping



The a400m has the distinct disadvantage of being shopped to countries who would rather not buy expensive strategic airlifters. Same with the mrtt. That by itself gives Boeing a much greater position, as they can invest the necessary amounts into a military program and get much more put of it than Airbus.
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Re: Airbus strategy review augurs clean break under new CEO

Sun Dec 16, 2018 9:00 am

parapente wrote:
As many have said the problem with the 330neo is that it was about 3 years late.
The more fundamental question is why and what that means for the quality future planning.
The reason it was late was for some extraordinary and inexplicable reason someone/some group of marketing bods actually though that a 350-8 could compete with a 787.How did they possibly think this? One can only hope these people have now gone so such a horrendous mistake can be made again.



The German magazine Aero is quoting an unnamed executive from a large German carrier in their A330NEO article, where he states that the A330 is too expensive or to put it in other words, that the A350 is more than worth the extra money.
 
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Re: Airbus strategy review augurs clean break under new CEO

Sun Dec 16, 2018 9:10 am

luckyone wrote:
.......... Airbus pitched what has effectively become the A330neo around the time of the 787 launch—anyone else remember the much maligned comment about Airbus only needing to utilize new engines on the existing A330 aircraft. And airlines said thanks no thanks, leading to the A350.


The A350Mk1 accumulated quite a nice order book at the time. ( guess why airbus had so much problems moving those over to the XWB and/or the A330(NEO)
But afaics those that had the 787 on order ( like UDH ) derided the product to save guard their investment ( in the 787 ).
787 at the time sold on low pricing embelished to the wider public with all those super duper tech advances.
( If you look at the 787 A330NEO : same engine same sfc. Today again the 787 has been sold on low pricing. )
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Re: Airbus strategy review augurs clean break under new CEO

Sun Dec 16, 2018 9:13 am

strfyr51 wrote:
They haven't Ever Led the way on anything have they?

Does the A380 count?
 
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Re: Airbus strategy review augurs clean break under new CEO

Sun Dec 16, 2018 9:20 am

WPvsMW wrote:
strfyr51 wrote:
They haven't Ever Led the way on anything have they?

Does the A380 count?

Sure it does but to what end? :duck:

Seriously, the A300 did blaze the WB twin trail.
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Re: Airbus strategy review augurs clean break under new CEO

Sun Dec 16, 2018 9:37 am

WIederling wrote:
( If you look at the 787 A330NEO : same engine same sfc. Today again the 787 has been sold on low pricing. )

The entire rationale of the A330neo was to kill the 787 on price. Do we need to go back to all those threads about how it was being built on a paid off line, and how cheap it was to design? Some posts may actually be under your byline. Now it seems that program execution wasn’t all that, while our friends in the Pacific Northwest and South are spitting out 787s cheaper and cheaper. You will understand therefore when your assertion that the 787 has been sold on low pricing is met with a few giggles.
 
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Kindanew
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Re: Airbus strategy review augurs clean break under new CEO

Sun Dec 16, 2018 12:27 pm

strfyr51 wrote:
They haven't Ever Led the way on anything have they?


A300- first widebody twin and first use of composites as primary structure

A320- first use of FBW in a passenger jet
 
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keesje
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Re: Airbus strategy review augurs clean break under new CEO

Sun Dec 16, 2018 12:45 pm

VV wrote:
So, the new CEO is reviewing the overall strategy. There is nothing wrong with it.

Nobody knows if he will request a new strategy or if they will follow the strategy defined so far.

A strategy is by definition a long term thing, so there HAS TO be a strategy today. If it is not the case then it is an issue generated by past management.

So in my opinion there is absolutely nothing to comment so far. This whole brouhaha in this thread is completely sterile.


Kind of agree with VV :scared: There is a new MT, short term supply chain issues seem under control. Financially / backlog / portfolio the company is now in a strong position, but the new team is stretching the horizon for the next 10-15 yrs, showing long term "vision". Developing the NB & WB portfolio's but also rolling out new production processes accross the A320 FAL's might be on the agenda.
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Re: Airbus strategy review augurs clean break under new CEO

Sun Dec 16, 2018 12:53 pm

VV wrote:
in comment #93 newbiepilot mentions the work done to automate 737 production. However, it is obvious in my view that 737 strategy has not moved since many years.

Yes, the productivity when they build 737s has been improved significantly. It started in the early 1990s when MIT and industries launched the "Lean Aerospace Initiative" project.

It seems the discussion here has been more about the execution than the strategy.

Deciding to invest in 737NG and MAX rather than a clean sheet is a strategy.

Deciding to invest in automation to improve rate and decrease cost is a strategy.

Shelving new products to free up engineers to work on production improvements is a strategy.

It's not all about what goes in the product brochures or the kinds of slides that get posted to a.net.

It's also about meeting internal profit targets, generating cash for future investment, generating value for investors, reducing risk, etc.
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VV
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Re: Airbus strategy review augurs clean break under new CEO

Sun Dec 16, 2018 1:12 pm

From product offering perspective, I think the strategy review should have been done in late 1990s with execution starting around 2000.

It was expected engine manufacturers would roll out the next generation engines.

Some people think they did a good job with A340-600&500, A380, A350-900&100, A320neo and A330neo.
Others have been more skeptical.

So far the backlog and also deliveries have not reflected in the operating margin nor has the case flow been stellar.

It is still unclear for me what they meant by "strategy review".

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