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

Wed Dec 19, 2018 1:54 pm

Sadly three posts in a row are exclusively about Boeing in a thread about Airbus strategy. Hopefully we can stay in topic rather than get another thread locked getting into an accounting debate. :roll:

parapente wrote:
One of the problems for EADS/Airbus is that it remain at heart a politically run enterprise rather than a commercial one.They tried to address the size differential between themselves and Boeing via the acquisition of BAE.The commercial deal was agreed and would have created an overall structure far closer to Boeing.However the Chancellor of Germany intervened and simply cancelled it.
Their hands are tied.This needs to change - but it won't as this is Europe not America.
As for automating and streamlining manufacturing methods in Toulouse.In France -are you kidding.Just take a look at what's going on there in their yellow vests.Not going to happen sadly.


Having governments have a significant ownership stake does create challenges. It is just another constraint that Airbus has to deal with. There are both pros and cons associated with it. I think so of the pros are harder to see. For example I would think that Airbus can strongly link to the best engineering talent coming from the education system.
 
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PW100
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Re: Airbus strategy review augurs clean break under new CEO

Wed Dec 19, 2018 2:18 pm

Planeflyer wrote:
Really grabbing at straws.

Perhaps, perhaps not.

But evading the question (or rather, the answer), speaks volumes . . .
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Taxi645
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Re: Airbus strategy review augurs clean break under new CEO

Thu Jan 24, 2019 5:02 pm

Taxi645 wrote:
If Airbus is going to do a strategic review of wing development and production post Brexit, I reckon the Dutch wouldn't say no:

- Still strong competence in aviation tech
- logistically well placed in relation to Germany, France and the sea.
- Several underused local Airports.
- Still got some credit from the Fokker disaster.

To be honest though. I think it will just remain in the UK or Brexit must indeed go terribly wrong (which I don't suspect).


Nicely politically neutral between the Germans and the French, I'm sure the Dutch wouldn't mind being rewarded for their loyalty to the European project.

Some more rattling of the cage from Enders:

https://www.flightglobal.com/news/artic ... uk-455246/
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Re: Airbus strategy review augurs clean break under new CEO

Thu Jan 24, 2019 5:25 pm

Taxi645 wrote:
Nicely politically neutral between the Germans and the French, I'm sure the Dutch wouldn't mind being rewarded for their loyalty to the European project.

I think Brexit has a strangle hold on high level Airbus strategy decisions till it is resolved.

Enders strong statements are great evidence of this.

It's looking more and more likely like hard Brexit will be the outcome, which Enders clearly feels is the worst possible result.

Yet Airbus can't really do anything drastic till the result is in effect.

And we read that one outcome might be that the decision is delayed.

That is not a great outcome since it will delay strategic moves even longer.

I think the most likely result is a hard brexit, and some sort of new work share agreement between Airbus stock holders DE and FR.

I doubt the outcome will be a new wing plant in the Netherlands.
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Taxi645
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Re: Airbus strategy review augurs clean break under new CEO

Thu Jan 24, 2019 5:34 pm

Revelation wrote:
Taxi645 wrote:
Nicely politically neutral between the Germans and the French, I'm sure the Dutch wouldn't mind being rewarded for their loyalty to the European project.

I think Brexit has a strangle hold on high level Airbus strategy decisions till it is resolved.

Enders strong statements are great evidence of this.

It's looking more and more likely like hard Brexit will be the outcome, which Enders clearly feels is the worst possible result.

Yet Airbus can't really do anything drastic till the result is in effect.

And we read that one outcome might be that the decision is delayed.

That is not a great outcome since it will delay strategic moves even longer.

I think the most likely result is a hard brexit, and some sort of new work share agreement between Airbus stock holders DE and FR.

I doubt the outcome will be a new wing plant in the Netherlands.


Agree, I'm just teasing.


It's just a game of chicken. Both side try to threaten each other with the possibility of a no deal brexit in order to get the other side to compromise. They might just end up with the outcome they both don't want. it's a pity I would rather have the UK stay on board under the condition of more reform of the EU project:

1 More funds for Education and research in stead of agriculture.
2 Stricter and direct consequences for members that don't take democracy and rule of law etc. seriously
etc.

But that's all bit off-topic.
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Planeflyer
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Re: Airbus strategy review augurs clean break under new CEO

Thu Jan 24, 2019 7:13 pm

If ab main priority is not increasing profitability and cash flow the strategic review won’t yield the type of results needed.

If AB moves wing Mfg it will be to improve efficiencies and nothing to do Brexit.
 
2175301
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Re: Airbus strategy review augurs clean break under new CEO

Thu Jan 24, 2019 7:24 pm

As a personal opinion: I think that the British should have wasted little efforts in negotiation and just planned for the "no deal" exit up front. My observation is that the EU never intended to let Britian leave without significant penalties or restrictions (otherwise other countries would also consider exiting leading to full EU collapse). Brittan could have appropiate trade deals with most other countries in place; and have draft base deals ready for France and a few other key EU countries ready (and those drafts could be done by Brittan without the participation of the other countries).

It is not true that it takes years to negotiate trade deals. It only takes years to negotiate a lot of fine details and exceptions. Basic commodities and travel terms are pretty standard worldwide and could be quickly agreed within a week or so of exit (if not just a few days). Further refinements and benefits would take time. Likely 85% or more or normal trade and commerce would be covered under basic commodity and travel terms.

At this point; I believe things will be very messy.

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

Thu Jan 24, 2019 7:30 pm

Planeflyer wrote:
If ab main priority is not increasing profitability and cash flow the strategic review won’t yield the type of results needed.

If AB moves wing Mfg it will be to improve efficiencies and nothing to do Brexit.


I don’t see a good way to get this accomplished.

For the go forward stance what you would want to do is get the composite wing manufacturing out of the UK. But near as I can tell they haven’t quite gotten the A350 to per unit profitability yet and certainly this would add cost and complexity to a program that needs to be a cash cow at some point.

The most efficiency could obviously be gained from moving the A320neo wings. But do you want to add industrial challenge to that program? I don’t see how you can slow down in the UK and relocate the equipment elsewhere. So that means buying new equipment right? Anyone want to sign up to invest what’s probably a billion(s?) on a wing technology you may not want to be building in 10 years?

It’s a sticky situation for them. It’s likely further complicated in that the UK is a party to several ongoing launch aid contracts and military programs where Airbus needs their cooperation to get things done.

Hell I believe even the decision to stretch the A320neo and/or do the A220-500 is likely to be very politically and industrially complex for Airbus. People don’t like to discuss it or think about it but it’s not a normal company. Things aren’t that easy.
 
Planeflyer
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Re: Airbus strategy review augurs clean break under new CEO

Thu Jan 24, 2019 7:47 pm

I don't think wing production will move for the very reason that doing so will set cash flow generation backwards.

I think the conundrum facing AB is that the government ownership that was required to get it started is now holding it back.

AB needs to invest in the future and moving the win plant for existing programs would only be reinventing the past
 
JoeCanuck
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Re: Airbus strategy review augurs clean break under new CEO

Thu Jan 24, 2019 7:49 pm

I think most of this is posturing. International trade agreements happen all of the time. Every commercial aircraft gets parts from globally located sources.

Airbus can't afford a significant production disruption, and it doesn't make a lot of sense to create a second wing factory...UNLESS...they would need it to increase production. Even if they did need a second factory and it could eventually take over sole production of wings, it would take considerable time and expense at a time where they need to have resources available to deal with whatever Boeing does with the NMA.

The British can't afford to have a money making and job creating factory get shuttered.

I highly doubt wing production will be affected in any appreciable way. My guess is that the biggest differences between pre and post brexit operations, (be the brexit rock hard, fluffy soft or Goldilocks 'just right'), will be paperwork.
What the...?
 
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flyingclrs727
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Re: Airbus strategy review augurs clean break under new CEO

Thu Jan 24, 2019 7:53 pm

Planeflyer wrote:
I don't think wing production will move for the very reason that doing so will set cash flow generation backwards.

I think the conundrum facing AB is that the government ownership that was required to get it started is now holding it back.

AB needs to invest in the future and moving the win plant for existing programs would only be reinventing the past


Not only that, but where are they going to get enough engineers with decades of experience designing wings to set up a new subsidiary.
 
bigjku
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Re: Airbus strategy review augurs clean break under new CEO

Thu Jan 24, 2019 8:00 pm

Planeflyer wrote:
I don't think wing production will move for the very reason that doing so will set cash flow generation backwards.

I think the conundrum facing AB is that the government ownership that was required to get it started is now holding it back.

AB needs to invest in the future and moving the win plant for existing programs would only be reinventing the past


Agree any disruption can’t happen at this point. If you want a feel for where they stand relative to context commitments they are on the books to deliver 13 A321’s to Jet Blue but in their financials they only plan on 6. They can’t play around anymore as I would guess missed delivery dates all generate some form of compensation.
 
Planeflyer
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Re: Airbus strategy review augurs clean break under new CEO

Thu Jan 24, 2019 9:51 pm

flyingclrs727 wrote:
Planeflyer wrote:
I don't think wing production will move for the very reason that doing so will set cash flow generation backwards.

I think the conundrum facing AB is that the government ownership that was required to get it started is now holding it back.

AB needs to invest in the future and moving the win plant for existing programs would only be reinventing the past


Not only that, but where are they going to get enough engineers with decades of experience designing wings to set up a new subsidiary.


Good point!
 
JayinKitsap
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Re: Airbus strategy review augurs clean break under new CEO

Thu Jan 24, 2019 10:17 pm

Currently all trade US to the EU is in accordance with WTO rules, efforts to have a US to EU trade agreements went nowhere because it takes 28 countries to agree fully, which never happens. The UK encountered the same thing in the Brexit negotiations, can't get an agreement other than the UK should really stay and yes there will be an incredibly large penalty if they leave. Nearly all of the soft Brexit plans have hit the rocks now, so it is likely a hard Brexit.

The UK imports from the EU about 3x the value that they export to the EU, it is in greatly the EU's interest to facilitate the existing imports from the UK, adding tariffs and regulations just increases the EU cost. If Airbus has any power in the EU, it can make the shipping back and forth between the UK and the EU to be as easy as currently, probably some more paperwork identifying the ship sets going back and forth. Some valuation information to make the VAT taxes work. Other than 2 way flows it is not harder than US engines going to the EU or shipping plane parts to Mobile.
 
brindabella
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Re: Airbus strategy review augurs clean break under new CEO

Sat Jan 26, 2019 2:18 pm

JoeCanuck wrote:
I think most of this is posturing. International trade agreements happen all of the time. Every commercial aircraft gets parts from globally located sources.

Airbus can't afford a significant production disruption, and it doesn't make a lot of sense to create a second wing factory...UNLESS...they would need it to increase production. Even if they did need a second factory and it could eventually take over sole production of wings, it would take considerable time and expense at a time where they need to have resources available to deal with whatever Boeing does with the NMA.

The British can't afford to have a money making and job creating factory get shuttered.

I highly doubt wing production will be affected in any appreciable way. My guess is that the biggest differences between pre and post brexit operations, (be the brexit rock hard, fluffy soft or Goldilocks 'just right'), will be paperwork.


Ah reason, sweet reason! :cloudnine:

However much anyone may think the EU negotiators are/are not justified, nevertheless the fact remains that the EU negotiators have given nothing. Zero. Nada. Zip.

etcetc :ashamed:

So I have to ask, where will the "spirit of compromise" that you are evoking ... come from?

cheers
Billy
 
brindabella
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Re: Airbus strategy review augurs clean break under new CEO

Sat Jan 26, 2019 2:39 pm

JayinKitsap wrote:
Currently all trade US to the EU is in accordance with WTO rules, efforts to have a US to EU trade agreements went nowhere because it takes 28 countries to agree fully, which never happens. The UK encountered the same thing in the Brexit negotiations, can't get an agreement other than the UK should really stay and yes there will be an incredibly large penalty if they leave. Nearly all of the soft Brexit plans have hit the rocks now, so it is likely a hard Brexit.

The UK imports from the EU about 3x the value that they export to the EU, it is in greatly the EU's interest to facilitate the existing imports from the UK, adding tariffs and regulations just increases the EU cost. If Airbus has any power in the EU, it can make the shipping back and forth between the UK and the EU to be as easy as currently, probably some more paperwork identifying the ship sets going back and forth. Some valuation information to make the VAT taxes work. Other than 2 way flows it is not harder than US engines going to the EU or shipping plane parts to Mobile.


Sorry to repeat, but you are also employing reason. :cloudnine: :white:

Whereas the arena is enormous geo-politics.
The entire Greece saga made no sense until a quote from Angela surfaced: EG
"the point is that noone. Noone should ever try anything like this again."

So now Greece is saddled with debts that it will never realistically repay.
The Airbus viability is extremely important to Brussels.

But it is an order of magnitude less important than demonstrating that anyone else that tries what Britain is trying will also get the same horrible punishment.

Compared to that, some wings for Airbus are a very small beer. :frown:

Sorry.
Billy
 
JayinKitsap
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Re: Airbus strategy review augurs clean break under new CEO

Sat Jan 26, 2019 4:30 pm

brindabella wrote:
JayinKitsap wrote:
Currently all trade US to the EU is in accordance with WTO rules, efforts to have a US to EU trade agreements went nowhere because it takes 28 countries to agree fully, which never happens. The UK encountered the same thing in the Brexit negotiations, can't get an agreement other than the UK should really stay and yes there will be an incredibly large penalty if they leave. Nearly all of the soft Brexit plans have hit the rocks now, so it is likely a hard Brexit.

The UK imports from the EU about 3x the value that they export to the EU, it is in greatly the EU's interest to facilitate the existing imports from the UK, adding tariffs and regulations just increases the EU cost. If Airbus has any power in the EU, it can make the shipping back and forth between the UK and the EU to be as easy as currently, probably some more paperwork identifying the ship sets going back and forth. Some valuation information to make the VAT taxes work. Other than 2 way flows it is not harder than US engines going to the EU or shipping plane parts to Mobile.


Sorry to repeat, but you are also employing reason. :cloudnine: :white:

Whereas the arena is enormous geo-politics.
The entire Greece saga made no sense until a quote from Angela surfaced: EG
"the point is that noone. Noone should ever try anything like this again."

So now Greece is saddled with debts that it will never realistically repay.
The Airbus viability is extremely important to Brussels.

But it is an order of magnitude less important than demonstrating that anyone else that tries what Britain is trying will also get the same horrible punishment.

Compared to that, some wings for Airbus are a very small beer. :frown:

Sorry.


Being from outside the EU, reason seems logical.

You are so right that the EU chained Greece down with a burden it could never recover from, it has made a number of other countries behave.

Yes that upstart UK needs to be taught a serious lesson if it actually leaves, that will keep all the others from ever trying that stunt themselves.
 
Noshow
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Re: Airbus strategy review augurs clean break under new CEO

Sat Jan 26, 2019 4:36 pm

I don't know what the Greece theories have to do with it. Greece loaned too much money supported by western banks and couldn't pay. So the western taxpayers had to come to the rescue while the greek people face some brutal cuts everywhere. Now tourism catched up nicely and hopefully the rest of their economy will too. It's a great country and will recover for sure. It's the European identity in a nutshell.
That has nothing to do with silencing them or similar they are NOT silent as everyone can see.
 
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Re: Airbus strategy review augurs clean break under new CEO

Sat Jan 26, 2019 4:41 pm

Let's please try to focus on how Brexit will impact Airbus's strategy going forward.

There's plenty of other places to discuss the general Brexit/EU topics.
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Noshow
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Re: Airbus strategy review augurs clean break under new CEO

Sat Jan 26, 2019 5:37 pm

Exactly my point.
 
Planeflyer
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Re: Airbus strategy review augurs clean break under new CEO

Sat Jan 26, 2019 11:22 pm

At the risk of stirring the pot it’s Not easy to separate aerospace from politics especially in the case of AB.

Given everything else AB has to do why else besides carrying water for the EU would the departing CEO even raise the subject. Now if AB or Enders wants something from the EU that’s something different. Wonder what he needs?
 
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Revelation
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Re: Airbus strategy review augurs clean break under new CEO

Sun Feb 17, 2019 7:47 pm

Planeflyer wrote:
At the risk of stirring the pot it’s Not easy to separate aerospace from politics especially in the case of AB.

Given everything else AB has to do why else besides carrying water for the EU would the departing CEO even raise the subject. Now if AB or Enders wants something from the EU that’s something different. Wonder what he needs?

I guess to some people everything has to be seen through a political lens, yet if your focus was trying to run a business you might be unhappy with an exercise that is costing you tens of millions of EUR with no tangible benefit, and one that may cause you to change your future investment policies:

Airbus said on Sunday it would have to make “difficult decisions” about future investment if Britain crashes out of the European Union without a deal, adding it had already spent tens of millions of euros in preparations.

“There is no such thing as a managed ‘no deal’, it’s absolutely catastrophic for us,” senior vice president Katherine Bennett told the BBC’s Andrew Marr.

Ref: https://www.reuters.com/article/uk-brit ... SKCN1Q60AX
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JayinKitsap
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Re: Airbus strategy review augurs clean break under new CEO

Sun Feb 17, 2019 8:03 pm

We will know in a few weeks, March 29 is fast approaching. It could be like Y2K that really wasn't a problem, it could be the start of a new ice age, or somewhere in between.

Trade per the WTO rules isn't bad, all trade between the US and the EU are per that as no Trade Agreements were ever settled (it is hard to get a unanimous vote from 28 countries). Customs operations can be smooth or a real bottleneck depending on how the politicians handle it, it appears it will be on the fly. Can Airbus parts arrive and leave GB without delays and tariffs, or will pain be extracted. As GB buys between 2x and 3x from the balance of the EU than it sells, there will be incentive for the EU to get a working system. It is much easier to find alternate sellers than buyers.

Immigration, taxes, and contracts are the real problem area. Will a British subject living in France still be legal or will he need to go home, with the German working at the Airbus wing plant need to go home. How to handle the border in Northern Ireland is also quite thorny.

Anyway, there needs to be lots of popcorn shipped for the Showdown next month.

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