aminobwana
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To Succed, Airbus Should Be Divested By Eads

Fri May 18, 2007 5:48 am

I refer today to the URL
"Sarkozy vows action on EU, EADS in Berlin "
http://www.washingtonpost.com/wp-dyn...le/2007/05/16/AR2007051601570.html

At a first view this seems good news, but most probably it is really the prelude of a virtual
conversion of EADS in a state, possibly multi-state Enterprise, if no immediate alternatives
are implemented.

Theoretically, EADS, the 100% owner of AIRBUS, is a private company, the shareholder
represented in the Board being DAIMLER-CHYSLER , a German private Enterprise (22.5%
incl. 7.5% owned by other German institutions which ceded their voting rights to them),
7.5% LAGARDERE, a French very Government related private Enterprise, 15% the
French State, 5% CASA, a Spanish semi-state complex.
The remaining 50% shares a traded freely on the Paris stock exchange, including 5%+
owned by Russia through a State Investment Bank

By a very unusual so called SHAREHOLDER PACT, which establish equal influence of the
French and German institutional investors, no substantial decision can be taken without the
consent of both these, meaning in fact a paralyzing mutual veto right.

Practically, due by the fact that the main customers of EADS are precisely the defense
establishment of the home countries of above private owners and additionally, the same
states are also the largest customers of these owners themselves, the French and German
governments have a disproportional influence in this company, mostly so the French,
meaning that politics and nationalistic considerations are continuously interfering not only in EADS,
but in its Civil Aviation subsidiary AIRBUS.

Above has not affected negatively the finances of the defense and space business of EADS,
roughly a 50% of the total, because the same governments, being in turn the owners of many
of said customers, allowed it favorable condition of sales, but had most negative conse-
quences on AIRBUS, which for years were allegedly hidden by the positive results of the
defense and space sector (the latter fact of course is not visible from the formal balances !
(To prevent the observation this happened at BOEING too, I agree, but certainly diminished
after the stringend accounting rules (SARBANES-OXLEY act) imposed after the Enron scandal.)

Some of the captioned negative influences were and are:

* the refusal to grant the management of AIRBUS the needed autonomy to manage efficiently
..the enterprise, in turn impeding solutions due to the disastrous consequences of the
.."Shareholder Pact"
* the imposition of a French-German 50/50 quota system for the naming of Senior managers,
..incl.the CEO's), leaving some token percentage to other persons, implying duplication of
..functions and often, selecting personnel by criteriae other than their merits
* the imposition of similar quota systems regarding manufacturing sites and subcontractors,
..merely assigning some participation to the Spanish and former British partners.
* introducing nationalistic and prestige considerations regarding development of the
..type of certain aircrafts.
* reflecting on Airbus unfortunate issues as accusations of insider trading, illegal
..payments, polical pressure to pay Golden Parchutes and similar, as reported continuously
..by the French and German Press and commented in the Shareholder meting.

All this has thrown EADS and Airbus into the present crisis, which, as the URLs posted
at the Topic "Future Developments at EADS" show, is presently worsening at the level of
EADS because:

* as consequence of the situation, the existing private investors want to disengage and
..no new ones show any interest to provide the critically needed funding for AIRBUS
* the German government by their established policy of aversion of public investment
..in commercial enterprises is not willing to do so either
* the French Government is willing to invest, but only if the German part accepts to shift
..the "Shareholder pact" from 50/50 influence to a French dominance, possibly 60/40, as
..well as accept new state investors as Russia and Qatar. The German government is
..totally opposed to such and Daimler stated that this only could happen if and after
..they leave.

Given this absurd and confusing situation, under the existing parameters there is no other
realistic solution in view as that FRANCE, directly or more probably indirectly, takes over EADS

This would, by reasons as stated on the first part of this post, not be a total disgrace for
the Defense and Space business, even if create middle term a German competition, but would
only worsen the present problems at AIRBUS, as it cannot be expected that its many
non-financial woos would be solved by a now even more politicized and totally bureaucratic EADS.


WHAT TO DO ??

Due to the reasons as stated, there is little doubt that AIRBUS crisis was directly and/or indirectly
induced by EADS, as the instrument of its investors. Therefore, the only realistic solution would
be that they absorb the financial consequences, by taking over the total existing debt and offer
AIRBUS to private investors with the needed entrepreneurial and financial means to allow the
company pursue its business under sound commercial criteria.


The attraction of AIRBUS for investors, once disengaged from the political and nationalistic
influences, would be quite large, mainly given because of its A320 (and successor) product
line and - once the present unsatisfactory situation on the VLA and LA sectors is solved by
a radical and deep restructuring, with the support of the deep pockets of such new owners -
as the only equivalent counterpart of BOEING .

Here it must be remarked that if [b]REAL solutions are further delayed, sooner or latter a
third powerful competition will appear, it could be LOCKHEED, eventually in combination of other
as BAE and/or NORTHROP

Some characteristic of this restructuring, necessarily far beyond of the so called Power 8, plan,
I would propose separately, once evaluated the responses of the Forum to this post.
Obviously. it will be difficult and painful, but should lead to a final success ![/b]

Aminobwana
 
Ruscoe
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RE: To Succed, Airbus Should Be Divested By Eads

Fri May 18, 2007 7:29 am

A good post Aminobwana, although there are plenty here who would disagree both on the detail and the way forward for Airbus.

I agree that the way forward for Airbus, is for it to be floated off as a publically traded company, with a broad shareholder base.

Apart from a host of reasons you have already stated, that makes this unlikely, where does it leave the parent EADS. Although Airbus had a rocky start, in recent times, until the 380 problems arose, it was Airbus which was making EADS look respectable.

It will indeed be very interesting to see what the two sides (French & German) come up with. Common sense should prevail, but I was very concerned at the body language displayed by Sarkozy when he met the German Chancellor.

In my opinion it wasn't friendly, it was arrogant and condescending, (which may be excusable when you first become the President of a great Republic like France), but imo it makes agreement on Airbus, less likely, unless the Germans make a conscious decision to cave in.

Whatever, I strongly doubt Airbus will be divested.

Ruscoe
 
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keesje
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RE: To Succed, Airbus Should Be Divested By Eads

Fri May 18, 2007 7:53 am

Might be an interesting solution. However in reality defense & civil aviation is a good combination. In civil goes bad, defense usually goes better.

The deep VLA LA problems you mention, I think we should not judge to hastely & look in a few yrs / months to see how the situations is. Contrary to popular belief EADS has deep pockets now.

Splitting up companies can be a good idea. I once suggested splitting up Boeing Commercial Aircraft & IDS to remove the risk of the massively subsidized defense / space R&D (e.g. NASA) illegally being used to support the commercial aircraft business. However even the IDS ethics scandals http://www.google.com/search?hl=en&q=boeing+scandals ever brought up this option.

Appointing more top managers from not Airbus countries (e.g. US) could be a simple good idea IMO.
"Never mistake motion for action." Ernest Hemingway
 
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moo
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RE: To Succed, Airbus Should Be Divested By Eads

Fri May 18, 2007 8:37 am

One thing has baffled me recently - why has a business structure which took Airbus from strength to strength over the past 25 years suddenly no longer any good in many peoples eyes? What suddenly changed?

The moment Airbus hit difficulties with the A380, people were clamouring for structural changes in the business, despite it being the same business structure that got Airbus to number one LCA manufacturer (and kept Airbus there for a number of years).

Are peoples memories that short?

 Confused
 
ncelhr
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RE: To Succed, Airbus Should Be Divested By Eads

Fri May 18, 2007 9:14 am

Quoting Keesje (Reply 2):
Might be an interesting solution. However in reality defense & civil aviation is a good combination. In civil goes bad, defense usually goes better.

The deep VLA LA problems you mention, I think we should not judge to hastely & look in a few yrs / months to see how the situations is. Contrary to popular belief EADS has deep pockets now.

The above two statements are absolutely correct. Indeed, this is what Boeing can rely on. Commercial aircraft building is unstable in that when times are hard, orders simply vanish. When Boeing Commercial Aircraft went through rough times, military contracts kept it in the black.
Furthermore, Airbus could benefit from technology developed elsewhere within the EADS group, just like Boeing benefited from all the work that went into the stealth bombers.

Splitting Airbus & EADS? Not a good idea, IMHO.

BTW - Daimler-Chrysler is no more, I thought I'd mention.
 
cygnuschicago
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RE: To Succed, Airbus Should Be Divested By Eads

Fri May 18, 2007 9:25 am

Quoting Keesje (Reply 2):
Might be an interesting solution. However in reality defense & civil aviation is a good combination. In civil goes bad, defense usually goes better.

Yea, I think the combined solution is best. An independant Airbus will not survive, in my opinion. I believe that Airbus should integrate even closer with EADS to the point that it is a business unit within EADS, and the latter has more executive control.

The challenge with the current holding company structure is that Airbus faces more challenges in gaining technology transfer from the defense business. By integrating EADS more, the various business units can share a lot of services, including early-stage R&D. In fact, they can have a common "skunk / phantom works" a la LockMart / Boeing.
If you cannot do the math, your opinion means squat!
 
aminobwana
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RE: To Succed, Airbus Should Be Divested By Eads

Fri May 18, 2007 9:26 am

Quoting Moo (Reply 3):
One thing has baffled me recently - why has a business structure which took Airbus from strength to strength over the past 25 years suddenly no longer any good in many peoples eyes? What suddenly changed?

The moment Airbus hit difficulties with the A380, people were clamouring for structural changes in the business, despite it being the same business structure that got Airbus to number one LCA manufacturer (and kept Airbus there for a number of years).

Are peoples memories that short?

1) You are young and I understand that you are baffled. But that enterprises which were up to 100 years also
and dominant players in their field went belly up or sold in pieces is a common occurence

AEG Germany: When I, End the fifties, began my actities as a young Engineer in Siemens, our main competitor was AEG, founded in the ninenty century, described as a model of efficiency, and which more often the not, much cheaper.
Today: They disaappeared

ALSTOM: the largest French Electromechanical group, expandin rapidly for many years, building the TGV
Railroad in france, Power plants, and many other things:
A few year ago, on the verge of bankruptcy, saved by the French government

PANAMERICAN, the US Flagship Airline, dispapered

ALLIS CHALMERS, one of the oldest US mechanical manufacturer: disppeared

General MOTORS: The largest commercial entreprise of the world,now in most grave difficulties

and so on

2) IIf you read the Reply 0, you will see that there is stated that yhe main reason of the crisis of Airbus
originates in the progressive deterioration of the EADS organization and the duality of mnagement. This was
not noticed as long as the only factual competitor, BOEING, had their own crisis, so AIRBUS, with a
lot of help from its governments and of course, because there was good people working there, was able
to compete advantageously. But, as the EADS imposed disfunctional organization began taking its toll
and BOEING health was restaured, the consequences are now visible.

I hope this address your questions

aminobwana
 
aminobwana
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RE: To Succed, Airbus Should Be Divested By Eads

Fri May 18, 2007 9:33 am

Quoting CygnusChicago (Reply 5):
The challenge with the current holding company structure is that Airbus faces more challenges in gaining technology transfer from the defense business.

Could you elaborate to what challenges you refer. I assume we can assume that EADS
is transferring any technology the may have, unless purely defense related, to Airbus.

Thanks in advance

Aminobwana
 
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N328KF
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RE: To Succed, Airbus Should Be Divested By Eads

Fri May 18, 2007 9:55 am

Quoting Aminobwana (Reply 6):
General MOTORS: The largest commercial entreprise of the world,now in most grave difficulties

Just a nitpick here -- GM has not been the largest commercial enterprise in the world in some time, by several metrics. During the 1970s, GM was near the top. However, Exxon, GE, and a few international firms are all larger in just about every respect, in some cases by an order of magnitude.
“In the age of information, ignorance is a choice.”
-Donny Miller
 
aminobwana
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RE: To Succed, Airbus Should Be Divested By Eads

Fri May 18, 2007 10:16 am

Name: aminobwana
Date: 2007-05-18 02:43:56
Quoting Ncelhr (Reply 4):
BTW - Daimler-Chrysler is no more, I thought I'd mention

Could you elaborate why you mention this here ?? It seems unrelated other than by the fact, that D. paid
$ 37 B for CH. 10 years ago, spent a lot of billions more on them, and now not only got noting, but paid
$ 700 M to get rid of them !!!! This obviously explain between other why they are not interested to maintain
more billions in EADS !

Aminobwana


Quoting Ncelhr (Reply 4):
Quoting Keesje (Reply 2):
Might be an interesting solution. However in reality defense & civil aviation is a good combination. In civil goes bad, defense usually goes better.

The deep VLA LA problems you mention, I think we should not judge to hastely & look in a few yrs / months to see how the situations is. Contrary to popular belief EADS has deep pockets now.

The above two statements are absolutely correct. Indeed, this is what Boeing can rely on. Commercial aircraft building is unstable in that when times are hard, orders simply vanish. When Boeing Commercial Aircraft went through rough times, military contracts kept it in the black.
Furthermore, Airbus could benefit from technology developed elsewhere within the EADS group, just like Boeing benefited from all the work that went into the stealth bombers.


I agree with you that a SPLIT would made no sense, but I was proposing a DIVESTMENT, meaning
sell Airbus to somebody else, much preferably somebody related with defense Aircraft business

Examples: BAE, Northrop Grumman, or other monolithic and well organized company without political
agenda, could even be DESSAULT if EADS sells their stake there as rumored (but only if the French
state has no stake there !!). A further possibility is that the buyer is a non-aircraft strong organization,
providing the needed diversity in case of Civil aircraft slump, but maintaining a full technology interchange
with EADS (if EADS provides more than received, they would get paid!). probably, from the political
feasibility of the divestment, this would be the best solution.

The only reason to leave EADS is that it seems that it is not achievable that they be freed from
government and political interference

aminobwana

[Edited 2007-05-18 03:22:17]

[Edited 2007-05-18 03:25:49]

[Edited 2007-05-18 03:27:38]
 
aminobwana
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RE: To Succed, Airbus Should Be Divested By Eads

Fri May 18, 2007 10:36 am

Quoting N328KF (Reply 8):
Just a nitpick here -- GM has not been the largest commercial enterprise in the world in some time, by several metrics. During the 1970s, GM was near the top. However, Exxon, GE, and a few international firms are all larger in just about every respect, in some cases by an order of magnitude

Agreed. I should have written: "The one time nearly largest commercial entreprise of the world,
now in most grave difficulties"

aminobwana
 
NAV20
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RE: To Succed, Airbus Should Be Divested By Eads

Fri May 18, 2007 10:46 am

Good thread, Aminobwana, it's a question well worth a discussion.

Quoting Ruscoe (Reply 1):
where does it leave the parent EADS. Although Airbus had a rocky start, in recent times, until the 380 problems arose, it was Airbus which was making EADS look respectable.

Apparently the broad split of responsibilities between the 'joint CEOs' was that Forgeard had day-to-day charge of Airbus and Enders supervised EADS. Airbus slid downhill (due in large part to its concentration on the A380) but EADS moved into solid profit backed up by rising sales. The boot is now on the other foot with EADS subsidising Airbus.

Quoting Keesje (Reply 2):
Appointing more top managers from not Airbus countries (e.g. US) could be a simple good idea IMO.

I couldn't agree more that recruitment at the top MUST henceforward be based on ability (and specifically on experience in aviation) rather than on nationality/political contacts etc. I hardly need to add that the ridiculous 'custom' of hiring or firing people in twos (one Frenchman, one German) has to cease.

Quoting Moo (Reply 3):
people were clamouring for structural changes in the business, despite it being the same business structure that got Airbus to number one LCA manufacturer (and kept Airbus there for a number of years).

With respect, Moo, that isn't correct. The structure under which Airbus succeeded was a conventional consortium of privately-run companies. EADS, with its government-dominated group structure and integration of mainly-French) defence industries, was only set up in 2000-2001. So it could be said that Airbus prospered under the earlier private-sector structure, concentrating on civil aircraft, and slid into decline once it came under de facto government control and got into the military field.

I agree with the comments of others that a military tie-up can sometimes offer cross-benefits. However, I think the key issue for Airbus at the moment is that it badly needs new capital with which to rebuild its model range and market share. One obvious source for this would be Russia, which is eager to participate - and giving Russia a stake would open up the opportunity to secure the lion's share of Russian aviation growth in the future. But the perceived security risks of Russian participation in the European defence field would virtually 'close the door' on any prospects of US or British defence orders flowing to EADS. That looks to be the most compelling reason for separating Airbus off from EADS.

Putting it all together, in an ideal world, I would think that Airbus best future is likely to lie in becoming a truly independent company specialising in civil aviation, run by the best people who can be recruited worldwide, and answerable not to shadowy 'political influences' but to all its shareholders.

However, the world is anything but 'ideal' at the moment and I can't readily see any like that actually happening.  Smile
"Once you have flown, you will walk the earth with your eyes turned skywards.." - Leonardo da Vinci
 
XT6Wagon
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RE: To Succed, Airbus Should Be Divested By Eads

Fri May 18, 2007 10:55 am

No, Airbus needs the stability of EADS. While it might be a little different now, in the past downturns in the industry were easy to spot by the huge piles of companies going under. With space and military to carry the load during downturns its much more stable. The civil side "pays" for this by providing a solid foundation of skilled workers, technologies, and other things like that.

What Airbus DOESN'T need is its trainwreck management structure and some underperforming staff. *cough* John the mouth Leahy *cough*
 
Wsp
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RE: To Succed, Airbus Should Be Divested By Eads

Fri May 18, 2007 11:44 am

The basis for your suggestion is a set of assumptions about EADS/Airbus that I find questionable:

Quoting Aminobwana (Thread starter):
* the refusal to grant the management of AIRBUS the needed autonomy to manage efficiently
..the enterprise, in turn impeding solutions due to the disastrous consequences of the
.."Shareholder Pact"

The need to seek owner's approval for business decisions doesn't preclude a company from working efficiently. You make it sound like the EADS board in its nine meetings somehow tried to micromanage Airbus' policy.

Quoting Aminobwana (Thread starter):
* the imposition of a French-German 50/50 quota system for the naming of Senior managers,
..incl.the CEO's), leaving some token percentage to other persons, implying duplication of
..functions and often, selecting personnel by criteriae other than their merits

I have come to believe that this is something you made up. Except for the EADS CEOs you have not presented any sources that national interests play a role. Who are these incompetent managers that have infiltrated the Airbus hierarchy? And who were the candidates that were rejected instead if these incompetent people because of national concerns? Please provide sources and names.

Quoting Aminobwana (Thread starter):
* the imposition of similar quota systems regarding manufacturing sites and subcontractors,
..merely assigning some participation to the Spanish and former British partners.

Subcontractors are assigned based on financial considerations. The company has successfully extorted millions of Euros in subsidies from local governments (I think we can easily dig out the public threats to the UK to move wing production elsewhere if they do not come up with financial support demanded by Airbus). In the context of the A350 outsourcing debate the interested local German politicians were very eager to point out that they will use any legally possible form of financial support to participate in the project as much as possible. Airbus has clearly stated that they will seek outsourcing way beyond the current Airbus countries. Finmeccanica seems to be a hot candidate for A350 work-share although Italy is not invested in EADS.

You make it seem like the governments run the show. I am not sure if from the distance across the pond you might be getting a distorted picture of the realities.

Quoting Aminobwana (Thread starter):
* introducing nationalistic and prestige considerations regarding development of the
..type of certain aircrafts.

The old "The A380 is a prestige project" story. Did DaimlerChrysler and Lagardère object to that project? I thought these are commercial enterprises that wouldn't take part in silly prestige projects...

Quoting Aminobwana (Thread starter):
* reflecting on Airbus unfortunate issues as accusations of insider trading, illegal
..payments, polical pressure to pay Golden Parchutes and similar, as reported continuously
..by the French and German Press and commented in the Shareholder meting.

- Bad press is certainly a good reason to dissolve multi-billion industrial conglomerates.

- The "Golden Parachutes outrage" stories never cease to amuse. As if this is the first case where a senior executive was relieved of his duties and insisted on his contractual payments.

- "Comments" in shareholder meetings, who cares about that? Anyone who has a share can go there and speak his mind...

Quoting Aminobwana (Thread starter):
* as consequence of the situation, the existing private investors want to disengage and
..no new ones show any interest to provide the critically needed funding for AIRBUS

- Can you provide quotes from the private shareholders directly as to what are the actual reasons for their share reductions ? (hint: they sold close to the all-time high stock price...)

- Can you provide sources that show that Airbus has difficulties to obtain funding ? Who was approached and has refused funding ?

Quoting Aminobwana (Thread starter):
* the German government by their established policy of aversion of public investment
..in commercial enterprises is not willing to do so either

Are you suggesting Airbus is asking the German government for a capital increase? Why would they do that?

Quoting Aminobwana (Thread starter):
* the French Government is willing to invest, but only if the German part accepts to shift
..the "Shareholder pact" from 50/50 influence to a French dominance, possibly 60/40, as
..well as accept new state investors as Russia and Qatar. The German government is
..totally opposed to such and Daimler stated that this only could happen if and after
..they leave.

Interesting developments indeed. Although it sounds like Sarkozy has made some promises in the election campaign that he can't hold (unless Merkel suddenly changes her mind) and will now do some entertainment for the masses until things cool down and realistic discussions prevail.
 
aminobwana
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RE: To Succed, Airbus Should Be Divested By Eads

Fri May 18, 2007 12:10 pm

Quoting Aminobwana (Reply 10):
Putting it all together, in an ideal world, I would think that Airbus best future is likely to lie in becoming a truly independent company specialising in civil aviation, run by the best people who can be recruited worldwide, and answerable not to shadowy 'political influences' but to all its shareholders

As I wrote in Reply 9, I do not promote the idea of a truly independent AIRBUS company, as this would lack
the stabilizing factor which an different activity, be it defense aircrafts or any other industrial activity preferably
not subject to the same up-and down cycles of the Aircraft industry.

So, the idea is Airbus being sold to such a company X, the preconditions being that X were not politically
interfered,organizationally savvy and financially potent. As long as the buyer is not a competitor of EADS,
there is no reason why AIRBUS and EADS should not continue to have a complete technological exchange.

From the point of view of EADS:

- in the next 3 or 4 years need about $ 13 B for A350, $ 2-3 B for A320NG, $ N1 B for finance A380 loss
per aircraft sold as no break even in sight, $ N2 for second line A320, $ N3 for interest expenses. Together,
probably a sum equal to today EADS market value

- the sales (lets forget the A400, which neither looks good) will be A320, which Margin on the direct costs
is very small, and all the the A300 they can deliver antil lts say 2012. For after that, customers will buy B787
or wait for A350 (first shipping 2013, bulk of deliveries 2016.+)
With the existing capacity, ib the next 5 years AB can deliver 7/Month, 84 year i.e. 420 A330s
If they upgrade capacity to 9 per year by 2009, they could deliver approx 75 more, probably the upgrade
will cost the same or more as the increase profit;

- it is impossible with the data available to be sure, but after the huge loss also forecast for 2007, AB
would continue to lose money until they are able to begin to deliver A350, and there again is a huge risk.

So why EADS should not want to sell AB ?? If as Keesje say they have deep pockets, i.e cash reserves,
I am sure that Daimler will not allow to spent them on Airbus, after they have lost abou $ 37 + 7 B by
the Chrysler deal during the last 10 years.


As for RUSSIA in EADS:

You have outlined the strategic reasons, adding it would kill the US business,
But in my view the economic reason for the Russian is acquire the know-how for bettering their own
military crafts, as well as reinstate their past huge civil aircraft industry. Therefore, except for a few years.,
they will not only supply their own market, but provide competition to EADS and AIRBUS.

Aminobwana
 
manni
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RE: To Succed, Airbus Should Be Divested By Eads

Fri May 18, 2007 1:47 pm

Quoting Wsp (Reply 13):

Very good reply to a lot of questionable assumptions.  thumbsup 

Quoting Aminobwana (Reply 14):

And the crusade against Airbus continues  banghead  Where to start....

Quoting Aminobwana (Reply 14):
- in the next 3 or 4 years need about $ 13 B for A350,

Make that 6 to 7 and some of these costs will have already been made.

Quoting Aminobwana (Reply 14):
$ 2-3 B for A320NG

Has that been decided already and where did you get that figure from? With a future production capacity of 480 aircraft a year, US$2 to 3 billion isn't a bad deal to improve your best selling aircraft even more.

Quoting Aminobwana (Reply 14):
$ N1 B for finance A380 loss
per aircraft sold as no break even in sight

I'm not sure what this 'N' stands for but a billion dollars loss for each A380 sold... You're being to optimistic  rotfl 

Quoting Aminobwana (Reply 14):
$ N2 for second line A320, $ N3 for interest expenses.

Again whatever the 'N' stands for....

Quoting Aminobwana (Reply 14):
the sales (lets forget the A400, which neither looks good)

Nothing wrong with the A400M. Besides all costs are absorbed by the European governements for whom the A400M is build. Aircraft sold to others will bring in a profit.

Quoting Aminobwana (Reply 14):
will be A320, which Margin on the direct costs
is very small,

Margin on direct costs!?!

Quoting Aminobwana (Reply 14):
and all the the A300 they can deliver antil lts say 2012.

Unles they decide to restart the A300 line that will be close to 0. The last A300 has already been build.  Wink

Quoting Aminobwana (Reply 14):
(first shipping 2013, bulk of deliveries 2016.+)

You're speculating.

Quoting Aminobwana (Reply 14):
If they upgrade capacity to 9 per year by 2009,

Not 'if', they will and are reportedly considering upping it to 10!

Quoting Aminobwana (Reply 14):
the upgrade
will cost the same or more as the increase profit;

 Wow! Do you actually believe what you are writing?

Quoting Aminobwana (Reply 14):
AB
would continue to lose money until they are able to begin to deliver A350,

No they wont. IIRC a small loss is forecasted for 2007. They should be back in black from 2008 (that's 5 years before they start delivering A350s).
 
aminobwana
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RE: To Succed, Airbus Should Be Divested By Eads

Fri May 18, 2007 2:58 pm

I do not know how in my reply 14 the quote was referred to my own unrelated Reply 10. It should have said:

Quote:
Quoting Nav20 (Reply 11):
Putting it all together, in an ideal world, I would think that Airbus best future is likely to lie in becoming a truly independent company specialising in civil aviation, run by the best people who can be recruited worldwide, and answerable not to shadowy 'political influences' but to all its shareholders



Quoting Ruscoe (Reply 1):
A good post Aminobwana, although there are plenty here who would disagree both on the detail and the way forward for Airbus

I agree that the way forward for Airbus, is for it to be floated off as a publically traded company, with a broad shareholder base.

This is not exactly what I had in mind. See my Reply 14 to NAV20. Thanks

Quote:
Apart from a host of reasons you have already stated, that makes this unlikely, where does it leave the parent EADS. Although Airbus had a rocky start, in recent times, until the 380 problems arose, it was Airbus which was making EADS look respectable

see also my reply 14. Thanks

Quote:
It will indeed be very interesting to see what the two sides (French & German) come up with. Common sense should prevail, but I was very concerned at the body language displayed by Sarkozy when he met the German Chancellor.

In my opinion it wasn't friendly, it was arrogant and condescending, (which may be excusable when you first become the President of a great Republic like France), but imo it makes agreement on Airbus, less likely, unless the Germans make a conscious decision to cave in

You remarks are totally to the point. In my long experience with French things, first Lycee Francais and
much later, associated for 10 years with a very important French company, where i had opportunity to
interact with highlevel civil servants, I had the experience that some of the latter have still the Grande
Nation complex, with make them act in the manner you describe with foreign nationals. Of course,
this is not the general case.

Quote:
Whatever, I strongly doubt Airbus will be divested.

I hope you are not right !! If the the German Government refuses flatly to to invest (which is probable),
or refuses to invest if the power sharing 50/50 is not maintained (which is sure) and consequently
Daimler veto French government investment, then who will provide the roughly $ 20+ B needed in the
next 5 years ?? I could be that in such case Lagardere and Daimler would offer the French Government
their stake (at today prices it would be about $ 7 B), so that they would need to come up with about
$ 27 B during the next 5 years,or more if the operation losses continue to grow !! Some of these
could be loans, which of course would create most serious WTO problems ! The could transfer about
15% = $ 3.5 B of these to Qatar and Russia with the negative effects stated in NAV20 Reply 11. And
I am not so sure that the Qataris will continue to be eager to invest if they reassess the situation !

And I think that nobody expects that a political and bureaucratic institution owned by France, Russia,
and Qatar (?) will be able to force through a meaningful restructuring !

Do you see a workable and realitistic Alternative ??

regards

Aminobwana
 
efcar98
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RE: To Succed, Airbus Should Be Divested By Eads

Fri May 18, 2007 3:08 pm

I just finished a research project for my public sector economics class where I explored the nature of Airbus as a public, private, or merit good. Economically speaking, there is no reason for Airbus to exist with its massive subsidies, but their local economies and egos justify the massive development support. Basically, Airbus exists to give Boeing a black eye in the name of Europe.
 
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scbriml
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RE: To Succed, Airbus Should Be Divested By Eads

Fri May 18, 2007 6:19 pm

Quoting XT6Wagon (Reply 12):
underperforming staff. *cough* John the mouth Leahy *cough*

Regardless of whether you like, dislike, loath or love him, I think you are the first to actually accuse John Leahy of being bad at his job!  Wow!

A brash, big-mouth he may be, but most sensible people consider him to be rather good at selling planes.

http://www.airbus.com/en/corporate/p...gement/biographies/john_leahy.html
In 1995, when Airbus had an 18% market share, Mr. Leahy set a commercial goal to achieve 50% of the market by the year 2000. Airbus achieved this goal in 1999 and has maintained over 50% market share in five of the following six years. Airbus also has over 50 percent of worldwide aircraft deliveries.
Time flies like an arrow. Fruit flies like a banana!
There are 10 types of people in the World - those that understand binary and those that don't.
 
astuteman
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RE: To Succed, Airbus Should Be Divested By Eads

Fri May 18, 2007 6:31 pm

Quoting EFCar98 (Reply 17):
I just finished a research project for my public sector economics class where I explored the nature of Airbus as a public, private, or merit good. Economically speaking, there is no reason for Airbus to exist with its massive subsidies, but their local economies and egos justify the massive development support. Basically, Airbus exists to give Boeing a black eye in the name of Europe.

Shame - a pass mark would have looked much better......  Smile

Quoting Manni (Reply 15):
And the crusade against Airbus continues  banghead  Where to start....

Suggestion - don't.  Smile

Regards
 
BoomBoom
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RE: To Succed, Airbus Should Be Divested By Eads

Sat May 19, 2007 1:31 am

Quote:
Louis Gallois is fed up with flags. When he took over as chief executive of Airbus last October, one of his early edicts was to ban the use of national symbols in company Power Point presentations.

"I said, 'I don't want to see any flags on slides,' because when you have a flag you have always an issue of national identity"...

"I am surprised by the limited progress made on integration over the last 10 years," he said. "Perhaps it was not the priority because things were working well. But we have seen with the A380 that things are not working well."

"We cannot afford to pay twice" for the errors that lead to A380 crisis, he said. "I think it is the right time to change."

"Inevitably, when you have a French CEO and a German CEO, you have a French camp and a German camp," Gallois said. "For that reason, I am sure that in the future we will have to go to a more normal, more classical organization."

http://www.iht.com/articles/2007/05/17/business/airbus.php?page=1
Our eyes are open, our eyes are open--wide, wide, wide...
 
ncelhr
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RE: To Succed, Airbus Should Be Divested By Eads

Sat May 19, 2007 1:51 am

Quoting Aminobwana (Reply 9):
Could you elaborate why you mention this here ?? It seems unrelated other than by the fact, that D. paid
$ 37 B for CH. 10 years ago, spent a lot of billions more on them, and now not only got noting, but paid
$ 700 M to get rid of them !!!! This obviously explain between other why they are not interested to maintain
more billions in EADS !

I was just pointing out the (small) error in your text - I was not meant to offend, sorry.
As for the explanation why they would not want to maintain more billions in EADS, this goes above my head. I am not aware of all financials of the company, nor their cash reserves, their relationship with the German government, and the geopolitical intricacies of Europe. Billions here and billions there are more than I can stomach, so I'll refrain from speculating.
 duck 
 
Wsp
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RE: To Succed, Airbus Should Be Divested By Eads

Sat May 19, 2007 2:48 am

Quoting EFCar98 (Reply 17):
I just finished a research project for my public sector economics class where I explored the nature of Airbus as a public, private, or merit good. Economically speaking, there is no reason for Airbus to exist with its massive subsidies, but their local economies and egos justify the massive development support. Basically, Airbus exists to give Boeing a black eye in the name of Europe.

Can you share the details of your analysis with the forum, to help everyone to better understand the issues?

From:

Quoting BoomBoom (Reply 20):
http://www.iht.com/articles/2007/05/17/business/airbus.php?page=1



Quote:
Early next month, he [Gallois] plans to present unions with a plan to overhaul the organizational structure of the company.

The goal is not only to unify administrative functions like human resources, information technology and procurement, but also to integrate all aspects of aircraft design and manufacturing.

Gallois would not discuss specifics ahead of the union presentation, but it was clear that national hierarchies like "Airbus Germany" and "Airbus France" would be dismantled. And instead of having, for example, a German team in Hamburg in charge of installing wiring according to a schematic designed by French engineers in Toulouse, there would be one transnational team working together, using the same tools and computer programs.

Doesn't sound like a CEO that is restricted by the EADS board in his decisions.

More context to one of BoomBoom's quotes:

Quote:
By all accounts, Gallois and Enders are said to work extremely well together, with Gallois taking primary responsibility for Airbus and Enders focusing on the military activities of EADS. But Gallois nonetheless lamented the effect that this dual governance structure had on the EADS corporate culture.

"Inevitably, when you have a French CEO and a German CEO, you have a French camp and a German camp," Gallois said. "For that reason, I am sure that in the future we will have to go to a more normal, more classical organization."
 
aminobwana
Topic Author
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RE: To Succed, Airbus Should Be Divested By Eads

Sat May 19, 2007 3:11 am

18_10-01-50_L18138158&type=comktNews&rpc=44

Quoting Manni (Reply 15):

And the crusade against Airbus continues

Of course you mean: ""And the crusade to help Airbus continues"" !![/quote]

If you didn't assess the gravity of the EADS/AIRBUS situation from the URL's posted under
the Reply 0 here and under the topic " Future Developments at EADS", I advise you to read
the new URL's posted yesterday and today.(see below)

What I trying to do, with the help of other knowledgeable members, it to propose a solution
to this situation, which is so bad that the President of France, immediately after assuming his
office, considers this as one of his two priorities. But is seems that the AIRBUS enthusiasts
within the Forum do not agree with him, assessing that there is no major problem

Again: closing the eyes to the reality does not solve anything.
-------------------------------------------------------------------------------------------

--------------------------------------------------------------NEW URL's-----------------------------------------------------

1) EADS, Airbus parent, begins reorganization
Tone set when executive co-president denounced the pressure of the French government to obtain allowances for its directors (and the general interference by this government)
[url] http://www.speroforum.com/site/artic...ory=33&idsub=124&id=9498&t=EADS%2C [/url]
Comment:This article shows very clearly, mote than before, that that EADS, and as consequence Airbus,
is not managed by sound commercial criteria,

2a) Sarkozy vows action on EU, EADS in Berlin
http://www.washingtonpost.com/wp-dyn...le/2007/05/16/AR2007051601570.html

2b)President Sarkozy makes EADS a test case for Franco-German ties
http://asia.news.yahoo.com/070517/afp/070517183920eco.html

2c) UPDATE 1-Sarkozy says France will one day sell EADS stake
http://yahoo.reuters.com/news/articl...13&WTModLoc=HybArt-C1-ArticlePage1
Comment: This articles show that Sarkozy is trying to convince the German to invest in EADS
against theirestablished policy not to do so in such type of Enterprises, but simultaneously tell
them the should from now on renounce to their 50% decision making. seems a non performer!
France Press also mention that only to cover past losses and provide the funds for the A350,
16.3B Euros ($ 22 B.)must be be raised.and his stated opinion that private investments shall
invest in EADS, without mentioning that the present private investors will disengage if further
state money comes in and there is no private group interested to come in

3) EADS has cash for deals: CEO
http://www.reuters.com/article/innov...idUSN1743466220070517?pageNumber=1
Comment: This was less concretely already stated some weeks ago and shows that EADS could
continue his business without the Civil aircraft component.

4) UPDATE 2 - Dubai-led fund may buy stake in EADS
http://yahoo.reuters.com/news/articl...50_L18138158&type=comktNews&rpc=44
Comment: This article states that Dubai is still studying to make such investment and a decision
could be made in 2 months.
The article is confuse regarding the order magnitude of an investment in EADS, it seems to state that
the Dubai fund has a total of $ 2 B available for purchase of stock in up to 12 international company,
if so, this investment would be minor. Probably the reporter got it wrong, previously a sum of $ 1-2 B
was mentioned, still relatively minor in relation of the needs. it must also be considered that Germany
opposes the fund as an investor with Board seats.

Note: The annoncement 3) or 4) had as effect a raise of 3% of the previously declining stock price

aminobwana
 
aminobwana
Topic Author
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RE: To Succed, Airbus Should Be Divested By Eads

Sat May 19, 2007 3:20 am

Quoting Ncelhr (Reply 21):
was just pointing out the (small) error in your text - I was not meant to offend, sorry.
As for the explanation why they would not want to maintain more billions in EADS, this goes above my head. I am not aware of all financials of the company, nor their cash reserves, their relationship with the German government, and the geopolitical intricacies of Europe. Billions here and billions there are more than I can stomach, so I'll refrain from speculating.

I am by no means offended because you corrected my error.

But my question was related to why your mention DAIMLER's CHRYSLER sale !!/

aminobwana
 
zvezda
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RE: To Succed, Airbus Should Be Divested By Eads

Sat May 19, 2007 3:29 am

The problem is not that Airbus is part of EADS. The problem is that EADS is an admixture of private enterprise and government bureaucracy. The solution is to fully privatize EADS.
 
XT6Wagon
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RE: To Succed, Airbus Should Be Divested By Eads

Sat May 19, 2007 3:33 am

Quoting Scbriml (Reply 18):
Regardless of whether you like, dislike, loath or love him, I think you are the first to actually accuse John Leahy of being bad at his job!

A brash, big-mouth he may be, but most sensible people consider him to be rather good at selling planes.

The problem is that his job is much more than selling planes. One should note the direction Airbus has taken since he got his job running all of sales and marketing. Maybe its not his fault but it is remarkable that since he joined they have had 0 successful programs start. A345/A346 was the first failure, and now on into A380, A350 Mk I-VI, etc

Frankly it doesn't matter if he is responsible or not, Airbus needs to fix its problems and then get someone new to act as a talking head. He is simply damaged goods by now with his willingness to lie, willingness to blame customers for airbus problems, and his willingness to attack Boeing in such a way that Airbus looks like a 3ring circus not a professional company.
 
aminobwana
Topic Author
Posts: 923
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RE: To Succed, Airbus Should Be Divested By Eads

Sat May 19, 2007 3:39 am

Quoting Wsp (Reply 22):
Quote:
Early next month, he [Gallois] plans to present unions with a plan to overhaul the organizational structure of the company.

The goal is not only to unify administrative functions like human resources, information technology and procurement, but also to integrate all aspects of aircraft design and manufacturing.

Gallois would not discuss specifics ahead of the union presentation, but it was clear that national hierarchies like "Airbus Germany" and "Airbus France" would be dismantled. And instead of having, for example, a German team in Hamburg in charge of installing wiring according to a schematic designed by French engineers in Toulouse, there would be one transnational team working together, using the same tools and computer programs.

Doesn't sound like a CEO that is restricted by the EADS board in his decisions.

Obviously, what this shows that Gallois has the right ideas and the board will certainly not restrain him
how to coordiante activities like the cabling issue. But it really does not show that he is otherwise free
from from board restraint. And let not forget when Gallois, himself board member and EADS co-CEO,
presented last January to the Board a first.less diluted and much announced draft of Power 8 to the
Board, it was resoundendly rejected, putting him and EADS in a terribly discomfort.
And the relation between French and German has certainly not improved since then !!

I refer you my reply 23 to show the difficulty to correct the french-German duality

thanks

aminobwana
 
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Stitch
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RE: To Succed, Airbus Should Be Divested By Eads

Sat May 19, 2007 4:00 am

EADS integrated Airbus into their structure for a reason, and it wasn't to screw it up. Airbus was a pretty loose alliance of three manufacturers prior to joining EADS and merging it with EADS - especially since all three manufacturers themselves had merged to form EADS the previous year - makes sense to me and it made sense to a great deal of other people.

And folks need to remember the A3XX program was years before Airbus became part of EADS, so it's not like Airbus joined EADS and suddenly the idea of the A380 sprang to life. In fact, the Airbus Integrated Company was created the year after the formal launch of the program in December 2000.

So breaking Airbus back out doesn't strike me as any type of panacea and would probably make things even worse...

[Edited 2007-05-18 21:02:11]
 
airfrnt
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RE: To Succed, Airbus Should Be Divested By Eads

Sat May 19, 2007 4:05 am

Quoting Keesje (Reply 2):
Might be an interesting solution. However in reality defense & civil aviation is a good combination. In civil goes bad, defense usually goes better.

People forget that the surving players in the late 90s had very little defense business between the two of them. Boeing had never really had much success in the defense space compared to McDonnell Douglas and Lockheed, and Airbus had very little millitary penetration because the US was basically footing the entire NATO bill.

Simply put, we don't have enough history to be sure.

Quoting Keesje (Reply 2):
The deep VLA LA problems you mention, I think we should not judge to hastely & look in a few yrs / months to see how the situations is. Contrary to popular belief EADS has deep pockets now.

They might have deep pockets, but remember that a lot of those pockets are debt financed. Airbus can only drawn them down so low before it impacts their credit rating.

Quoting Moo (Reply 3):
One thing has baffled me recently - why has a business structure which took Airbus from strength to strength over the past 25 years suddenly no longer any good in many peoples eyes? What suddenly changed?

Simple. The structure they have now is not the structure they have had for the last 25 years. It got overhauled in the early 2000 period, when the national manufacturers merged under political pressure to do so. Foregeard pushed for it.
 
airfrnt
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RE: To Succed, Airbus Should Be Divested By Eads

Sat May 19, 2007 4:11 am

Quoting Wsp (Reply 13):

The need to seek owner's approval for business decisions doesn't preclude a company from working efficiently. You make it sound like the EADS board in its nine meetings somehow tried to micromanage Airbus' policy.

The entire Christian Streiff episode seems to indicate that.

Quoting Manni (Reply 15):
And the crusade against Airbus continues banghead Where to start....

Pointing out the efficiencies at Airbus is hardly a crusade.

Quoting Stitch (Reply 28):

And folks need to remember the A3XX program was years before Airbus became part of EADS, so it's not like Airbus joined EADS and suddenly the idea of the A380 sprang to life. In fact, the Airbus Integrated Company was created the year after the formal launch of the program in December 2000.

Take a look at the building the A380 book that came out last year. The book makes it quite clear that the various governments and Foregeard demanded the change to make the A380 possible and in exchange for launch aid.
 
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Stitch
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RE: To Succed, Airbus Should Be Divested By Eads

Sat May 19, 2007 4:38 am

Quoting AirFrnt (Reply 30):
Take a look at the building the A380 book that came out last year. The book makes it quite clear that the various governments and Foregeard demanded the change to make the A380 possible and in exchange for launch aid.

But the defense and space side of all three members were already merged into EADS, so why continue to leave the commercial side separate? Especially as a loose confederation instead of a tightly-integrated one?

If Boeing and McDonnell-Douglas merged and then spun BCA off into a separate company, what would have been the benefit? Darn little, I imagine. And I imagine DaimlerChrysler, CASA and Aérospatiale-Matra saw darn little benefit in leaving their commercial divisions separate.
 
airfrnt
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RE: To Succed, Airbus Should Be Divested By Eads

Sat May 19, 2007 4:49 am

Quoting Stitch (Reply 31):

But the defense and space side of all three members were already merged into EADS, so why continue to leave the commercial side separate? Especially as a loose confederation instead of a tightly-integrated one?

If Boeing and McDonnell-Douglas merged and then spun BCA off into a separate company, what would have been the benefit? Darn little, I imagine. And I imagine DaimlerChrysler, CASA and A�rospatiale-Matra saw darn little benefit in leaving their commercial divisions separate.

Bear in mind that both decisions in retrospect have turned out fairly negatively for the company. The A380's woes were a reflection of the corporate problems at EADS, not the other way around. Boeing's merger with McDonnell-Douglas almost put them out of the commercial aviation business. Neither plan has worked well for Boeing or Airbus. Boeing is benefiting because it's downturn occurred when the entire industry was down. Airbus is struggling during a upturn in the entire business. But in both cases, the judgments made are (IMHO) highly dubious.
 
DAYflyer
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RE: To Succed, Airbus Should Be Divested By Eads

Sat May 19, 2007 5:20 am

Quoting Keesje (Reply 2):
Splitting up companies can be a good idea. I once suggested splitting up Boeing Commercial Aircraft & IDS to remove the risk of the massively subsidized defense / space R&D (e.g. NASA) illegally being used to support the commercial aircraft business.

There are no illegal NASA subsidies of Boeing. How many times must we go over this, Keesje? Your refusal to see the facts of that progam is disturbing. And dont sit there and spout off about how Airbus doesn't see any technology sharing from the A-400M either. If you think that's true, I have a tower in Paris to sell you.....
One Nation Under God
 
aminobwana
Topic Author
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RE: To Succed, Airbus Should Be Divested By Eads

Sat May 19, 2007 6:46 am

Quoting Zvezda (Reply 25):
The problem is not that Airbus is part of EADS. The problem is that EADS is an admixture of private enterprise and government bureaucracy. The solution is to fully privatize EADS.

Agreed. see also the declarations of Mr. Sarkozy (Reply 23). There is only one very large problem:
No new private investor will come in, and the existing ones will leave, if Airbus does not present a real
restructuring plan (not the timid intent as Power 8 is), including the commitment of the French
Government to sell its stake and cease to interfere. And even if Mr. Sarkozy profess a free market
philosophy, it seems a long stretch to expect such from any French government !!

I must add that given the typical and cozy relation of many French large enterprises, due that they
need its support, with the Government, such "private: investment must be excluded, as it would leave
the government with their hand in the pie !!

But yes, panie Zvezda (I have an idea of Polish, but not enough to understand it, I assume Pan means
Mr. also in Lithuanian?), this could be a solution, as long as board and shareholder decisions would
be taken by majority or at most, with 50.01% majority.

Quoting XT6Wagon (Reply 26):
Quoting Scbriml (Reply 18):
Regardless of whether you like, dislike, loath or love him, I think you are the first to actually accuse John Leahy of being bad at his job!

A brash, big-mouth he may be, but most sensible people consider him to be rather good at selling planes.

The problem is that his job is much more than selling planes. One should note the direction Airbus has taken since he got his job running all of sales and marketing. Maybe its not his fault but it is remarkable that since he joined they have had 0 successful programs start. A345/A346 was the first failure, and now on into A380, A350 Mk I-VI, etc

Frankly it doesn't matter if he is responsible or not, Airbus needs to fix its problems and then get someone new to act as a talking head. He is simply damaged goods by now with his willingness to lie, willingness to blame customers for airbus problems, and his willingness to attack Boeing in such a way that Airbus looks like a 3ring circus not a professional company.

This is not the first case of a salesperson who has too much power within his company, so he can
satisfy customers and make sales, by lowering prices, accepting onerous conditions, promising
what is not achievable, but when this happens, offering remedies which makes the customer happy,
etc.
This was not a major problem, as long the product sold was mainly the A320, which was really
competitive, but began to hurt a bit with the A330, still competitive but pressured by the B777 (as
was the A340 before the oil prices began to hit) but in the last times reached a climax with the
A380 and the A350 fiasco, by trying to save sales at nearly any cost.

A salesman wants to sell and earns proportionally, and it is a duty of the top management to
restrain him from damaging the company. Obviously this was and is not the case at Airbus.


But aside selling, the most important duty of a Commercial/M&S manager (not a simple salesman!)
is to transmit to the top management the reality of the market. Obviously, M. Foregeard didn't knew
this reality or he preferred not to acknowledge it to please his political mentors). Probably it was a
combination of deficient info by Leahy and deficient processing by Foregeard.

Anyway, Mr. Leahy succeeded to convey the impression to many inside and outside EADS/AIRBUS
(incl many Forum colleagues) that things are not so bad !! Obviously he should not survive any real
restructuring!

Quoting Stitch (Reply 28):
EADS integrated Airbus into their structure for a reason, and it wasn't to screw it up. Airbus was a pretty loose alliance of three manufacturers prior to joining EADS and merging it with EADS - especially since all three manufacturers themselves had merged to form EADS the previous year - makes sense to me and it made sense to a great deal of other people.

And folks need to remember the A3XX program was years before Airbus became part of EADS, so it's not like Airbus joined EADS and suddenly the idea of the A380 sprang to life. In fact, the Airbus Integrated Company was created the year after the formal launch of the program in December 2000.

So breaking Airbus back out doesn't strike me as any type of panacea and would probably make things even worse...

As already stated other-where, there was nothing wrong to unite the military and civil components
under a sole umbrella. The problem was that the umbrella was infected by a senseless shareholder
pact,political jockeying, favoritism etc., which seems as stated in above reply to Zvezda insurmountable.
And we shall not forget: due to the political and chauvinistic influences, not making the right decisions,
as it happened with the A380 from the beginning on, but more so a shortly after the launch, when the
realityof the market and competition became visible.

Quoting AirFrnt (Reply 32):
Bear in mind that both decisions in retrospect have turned out fairly negatively
for the company. The A380's woes were a reflection of the corporate problems at EADS, not the other w
ay around.

And this, in few words, is my motivation that EADS shout divest AIRBUS, as today with all their
problems they would be able to manage without AIRBUS, and if as I would prefer the new umbrella
should not be an Military aircraft manufacturer but lets say an Electromechanicall group, maintain a
technological full interchange EADS/AIRBUS.

Aminobwana
 
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Stitch
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RE: To Succed, Airbus Should Be Divested By Eads

Sat May 19, 2007 7:16 am

Quoting Aminobwana (Reply 34):
There is only one very large problem: No new private investor will come in, and the existing ones will leave, if Airbus does not present a real restructuring plan (not the timid intent as Power 8 is), including the commitment of the French Government to sell its stake and cease to interfere.

And yet Qatar is said to be ready to take a 20% non-voting stake. I doubt the emirate is doing it for a tax write-off, so they must believe they will see a solid return on that investment even without a say in how decisions are made. And Russia, while wanting a say in those decisions (via one or two seats on the Board) would still not be in a position to block France and Germany, and yet they too are willing to invest.

Quoting Aminobwana (Reply 34):
This is not the first case of a salesperson who has too much power within his company, so he can satisfy customers and make sales, by lowering prices, accepting onerous conditions, promising what is not achievable, but when this happens, offering remedies which makes the customer happy, etc.

And yet those prices, conditions, and other incentives are not so onerous to Airbus, either, as they have enjoyed margins better then Boeing Commercial Airplanes in years past. Perhaps if BCA had spent more time making their customers happy, they would have enjoyed higher margins and retained the mantle of largest commercial aircraft manufacturer...  Wink

Quote:
This was not a major problem, as long the product sold was mainly the A320, which was really competitive, but began to hurt a bit with the A330, still competitive but pressured by the B777...

The A330 has no competition. She chased the 777-200 off the field of battle and killed the 767-400ER before it could even take the field.

Quote:
...but in the last times reached a climax with the A380 and the A350 fiasco, by trying to save sales at nearly any cost.

We have no clue what Airbus is doing for the A350 and A380 to move them. The papers are saying a lot of stuff, but they aren't backing it with anything more then rumor and innuendo. They "report" that EK and SU received 55-60% discounts to order the A350, and yet the contracts have not been signed and the information they're using to base these claims on is confusing, if not downright suspect. Same with the papers that claim Boeing knocked 60% off the 747-8I.

Frankly, discounts of this nature are so extraordinary that they would spur additional sales, yet the A350, A380 and B747-8I remain relatively stagnant...

Quoting Aminobwana (Reply 34):
As already stated other-where, there was nothing wrong to unite the military and civil components under a sole umbrella. The problem was that the umbrella was infected by a senseless shareholder pact, political jockeying, favoritism etc., which seems as stated in above reply to Zvezda insurmountable.

Airbus was a political entity from the moment it formed in 1966 and the French and German governments had their hands - and taxpayer money - in it from Day One. I recommend a read of the "Story of Airbus" by Flug-Revue at http://www.flug-revue.rotor.com/FRheft/FRH0002/FR0002d.htm.


Nonetheless, Airbus inherited the governing structure of the company it merged with - EADS. And consider how disastrous McDonnell-Douglas leadership was for Boeing (especially Boeing Commercial Aircraft) after that merger.

Quote:
And we shall not forget: due to the political and chauvinistic influences, not making the right decisions, as it happened with the A380 from the beginning on, but more so a shortly after the launch, when the reality of the market and competition became visible.

It is far too early to say what the legacy of the A380 will be. This is like saying in 1957 that the 707 would never be successful because it was so much more expensive then the piston-powered planes of her day. Hindsight may be 20-20, but foresight rarely is.  Smile

Quoting Aminobwana (Reply 34):
And this, in few words, is my motivation that EADS shout divest AIRBUS, as today with all their problems they would be able to manage without AIRBUS, and if as I would prefer the new umbrella should not be an Military aircraft manufacturer but lets say an Electromechanicall group, maintain a technological full interchange EADS/AIRBUS.

And yet how would Airbus be managed? It was run by the EU governments before it merged with EADS and under EADS it is still run by the EU governments.

The better answer is not to split Airbus from EADS, but to split EADS from the EU governments as Zvezda and others have proposed.
 
ncelhr
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RE: To Succed, Airbus Should Be Divested By Eads

Sat May 19, 2007 7:19 am

Quoting AirFrnt (Reply 29):
People forget that the surving players in the late 90s had very little defense business between the two of them. Boeing had never really had much success in the defense space compared to McDonnell Douglas and Lockheed, and Airbus had very little millitary penetration because the US was basically footing the entire NATO bill.

Simply put, we don't have enough history to be sure.

Boeing benefited from research into the B1B & B2 bombers to design the 787.

It only seems logical that Airbus should stick with EADS to benefit from research contracts EADS gets.
 
zvezda
Posts: 8886
Joined: Sat Aug 28, 2004 8:48 pm

RE: To Succed, Airbus Should Be Divested By Eads

Sat May 19, 2007 7:44 am

Quoting Aminobwana (Reply 34):
The problem was that the umbrella was infected by a senseless shareholder
pact

The shareholder pact was not senseless. It was unfortunately a necessary step in reducing state control over the aviation manufacturing sector in europe. Without it, EADS never could have been formed. Now Sarkozy and Merkel can lead the effort to rescind it.

Quoting Aminobwana (Reply 34):
panie Zvezda (I have an idea of Polish, but not enough to understand it, I assume Pan means Mr. also in Lithuanian?)

I speak Russian in daily life, not Lithuanian, but you're very close. Mr. in Lithuanian is ponas or pone depending on grammatical declination in the sentence. When I'm feeling charitable, I think of languages spoken by fewer than 100 million persons as quaint.
 
airfrnt
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RE: To Succed, Airbus Should Be Divested By Eads

Sat May 19, 2007 8:11 am

Quoting Ncelhr (Reply 36):
Boeing benefited from research into the B1B & B2 bombers to design the 787.

I don't know why this keeps coming up, because it's inaccurate, and widely known to be inaccurate. ITAR shoves a hard barrier between classified (and the composition and construction of the B-1B and B2 are about as classified as it gets) data and unclassified. There are stories around how some of the data leaked, and screwed part of the early 787 program, as they then had to go and redo all of the calculations and experimentation that had led to the data that was used in the first place.

You can take a look at what NASA does, and say that maybe that helps Boeing, but it has helped Airbus as well. This is just as inaccurate as the constant mantra from the Boeing people that Airbus can give planes away because of the European launch aid.
 
aminobwana
Topic Author
Posts: 923
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RE: To Succed, Airbus Should Be Divested By Eads

Sat May 19, 2007 10:34 am

Quoting Zvezda (Reply 37):

Quote:
The shareholder pact was not senseless. It was unfortunately a necessary step in reducing state control over the aviation manufacturing sector in Europe. Without it, EADS never could have been formed. Now Sarkozy and Merkel can lead the effort to rescind it.


You are right, Gospodin Zvesda. I should have written " by a unfortunate and decision-inhibiting
shareholder pact"
I think that it is no way that Germans will accept to remain in minory when in the majority the
French government is in !

By the way, is Russian an official language ?? I thought only Lithuanian, Polish and Ukranian !!
-----------------------------------------------
Quoting Ncelhr (Reply 36):

Quote:
Boeing benefited from research into the B1B & B2 bombers to design the 787

.

Aside of the fact that the reserach results are open to Airbus, it is not exactly the same with the reseach
paid by the ESA to Airbus ?? Are the results open to Boeing ??
------------------------------------------------
FURTHER news:

See URL

Sarkozy pledges conditional help for ailing EADS
http://www.iht.com/articles/2007/05/18/news/eads.php

Between other, he said:
* TOULOUSE, France: President Nicolas Sarkozy of France said Friday that his government was prepared to inject new cash into EADS, the parent company of the struggling European plane manufacturer Airbus, if new shares were issued.
"The French state will do its duty if there needs to be a capital increase," Sarkozy said at the Airbus headquarters here. But he ruled out either a partial or total nationalization of EADS.
Sarkozy could be sought. He did not specify whether France would seek to grow its actual stake in EADS
.

Comment: He may have not said it there, but he did so repeatedly in Germany.
For a polititian, he seems very careless. Without German assent, France cannot invest, and if there is a
German Veto, how will he explain this to the not-so-government friendly ?? Og gorse, he could state
that he said "IF" there is a capital increase, but such arguments are not very popular with Labor !!

aminobwana
 
aminobwana
Topic Author
Posts: 923
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RE: To Succed, Airbus Should Be Divested By Eads

Sat May 19, 2007 12:36 pm

Quoting Stitch (Reply 35):

And yet Qatar is said to be ready to take a 20% non-voting stake

If you look at today's http://yahoo.reuters.com/news/articl...50_L18138158&type=comktNews&rpc=44
there is nothing to confirm this

I already had asked you where this info comes from. I saw only reference to 10%.
The history of this board surly could not explain such a vote of confidence by Qatar, as invest
10% (you say 20%) without any say !!

And Mr Sarkozy, when asked where the money would come from, speaks of France and Private
investors, no mention at all of Qatar and Russia.

[

Quoting Stitch (Reply 35):

And yet those prices, conditions, and other incentives are not so onerous to Airbus, either, as they have enjoyed margins better then Boeing

Again, lets speak of the last years and particularly 2006. Where is the source ??

Quoting Stitch (Reply 35):

The A330 has no competition. She chased the 777-200 off the field of battle and killed the 767-400ER before it could even take the field

I do not see why you bring up this, my comment (see my remark "a bit") obviously referred to the
A330-300
How can you compare the A330-200 253pax with the B777-200/200ER 305 pax ?? Boeing has at this
moment no equivalent to the A332 and this is the reason that the A300, as the only successful
Airbus wide body, did and still does well, until the B787 becomes available.
The B767 is a much older aircraft and therefore not competitive.

Quoting Stitch (Reply 35):

We have no clue what Airbus is doing for the A350 and A380 to move them. The papers are saying a lot of stuff, but they aren't backing it with anything more then rumor and innuendo

You have a very good clue, even if you do not confide in the press, by the statements of the purchasing
airlines
I do not either believe all what the media say, but if 4 or five independent source state the same, then I do !

Quoting Stitch (Reply 35):

Airbus was a political entity from the moment it formed in 1966

I will not discuss the pre-EADS issue. fact is that since its foundation, politics, shareholder pact and
chauvinism interfere. This was not critical as long the government help was plenty and BOEING in
disarray, but it is now.

Quoting Stitch (Reply 35):

It is far too early to say what the legacy of the A380

There are no absolute truths, bur reasonable expectations.
The B707 and later the B747 were absolute paradigm shifts and therefore difficult to assess, the A380 merely
a 25-30 % larger aircraft.

Quoting Stitch (Reply 35):

And yet how would Airbus be managed?

I have already repeatedly stated that I am not proposing an independent Airbus, but to transfer its ownership
to a private financially potent entity, which would ensure a sound management following sound economic
criteria. If it would be possible to liberate EADS from the political/chauvinistic/50-50 interference, in which
case private investors will spring from the ground, what I propose could be forgotten, but the chances of
such are, if you look at the news of the last days, nearly equal to zero. Mr. Sarkozy is saying he wants
private investors to come in, but instead to tell them:

[b]"If you bring us the money, we, the government, are out for good from the management and board"[b]

he tells instead:

1) we will invest some, we want the biggest stake in the company, so we can appoint the management,
...without 50/50 restrictions
2) "Germans, recede !, but do not forget to put some money (a little less than ourselves} first !"
3) "You, private investors, put the balance of the needed money and hope for the best".

But hopefully a miracle will occur and finally all players will see the light!

aminobwana
 
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Stitch
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RE: To Succed, Airbus Should Be Divested By Eads

Sat May 19, 2007 11:25 pm

Quoting Aminobwana (Reply 40):
If you look at today's http://yahoo.reuters.com/news/articl...50_L18138158&type=comktNews&rpc=44 there is nothing to confirm this

Indeed nothing, since the URL doesn't work.  Smile Still, you are correct it is 10% and not 20%. Still, it is a major investment offer if it goes through.

Quoting Aminobwana (Reply 40):
I do not see why you bring up this, my comment (see my remark "a bit") obviously referred to the A330-300.

No, it referred to the A330, period, which includes the A330-200 and A330-300. This is why most of us specifically identify the model number when we don't mean the family as a whole.

Quote:
How can you compare the A330-200 253pax with the B777-200/200ER 305 pax?

See above. In my mind, you were the one doing the comparing.

Quote:
Boeing has at this moment no equivalent to the A332 and this is the reason that the A300, as the only successful Airbus wide body, did and still does well, until the B787 becomes available. The B767 is a much older aircraft and therefore not competitive.

And yet the 767 family sells two frames for every three frames the A330-200 does... Not bad for an "uncompetitive" family.  Wink

Quoting Aminobwana (Reply 40):
You have a very good clue, even if you do not confide in the press, by the statements of the purchasing airlines I do not either believe all what the media say, but if 4 or five independent source state the same, then I do !

Not when those four or five independent sources all quote the same original rumor.  Smile

Quoting Aminobwana (Reply 40):
I will not discuss the pre-EADS issue. fact is that since its foundation, politics, shareholder pact and chauvinism interfere. This was not critical as long the government help was plenty and BOEING in
disarray, but it is now.

It is impossible to discuss the current situation with EADS and Airbus in a vacuum. This is not an episode of "South Park" and a simplistic Mr. Mackey statement of "EU Government Oversight is Bad, m'kay?" is not going to cut it when it comes to having a reasoned debate on the situation.

To be frank, it is this attitude which makes it so difficult to try and actually discuss anything with you and is why many "independents" on this board, to say nothing of the "Airbus Aficionados" view you as nothing more then a simple anti-Airbus shrill or a member of the "Boeing Boosters".

Quoting Aminobwana (Reply 40):
There are no absolute truths, bur reasonable expectations. The B707 and later the B747 were absolute paradigm shifts and therefore difficult to assess...

Fiddlesticks. The 707 was just a faster mode of transport. And the 747 just flew farther and carried more people so it made air travel cheaper and therefore more accessible.

Quote:
...the A380 merely a 25-30% larger aircraft.

And yet if traffic rises the 25-30% many industry analysts predict (especially a newer, more efficient planes like the A388 drive down the cost of travel), it might not be a bad idea to have a plane capable of carrying those extra folks...

Quoting Aminobwana (Reply 40):
I have already repeatedly stated that I am not proposing an independent Airbus, but to transfer its ownership to a private financially potent entity, which would ensure a sound management following sound economic criteria.

I'm sorry, but that is the definition of "an independent Airbus". It would require the three partners to fully divest their commercial divisions as well as spinning off Airbus UK into a new consortium, independent of EADS. Essentially, what Airbus was before the merger.

Quote:
If it would be possible to liberate EADS from the political/chauvinistic/50-50 interference, in which case private investors will spring from the ground...

They might, but they're going to require much more...insurance...then what Airbus now enjoys as part of EADS through RLA. Airbus will be lucky to get the $15-20 billion needed to launch the A350 and A320RS at the Prime Rate, much less the Central Bank Rate. And then there is all the work that needs to be done to form and administer the consortium, which is going to draw internal resources and focus from the job of building airplanes...

Of course, this all applies to an independent EADS, as well, but it is far better, in my view, that EADS as a whole move towards being privatized then pieces of it.
 
aminobwana
Topic Author
Posts: 923
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RE: To Succed, Airbus Should Be Divested By Eads

Sun May 20, 2007 2:20 am

Quoting Stitch (Reply 41):

Indeed nothing, since the URL doesn't work. Still, you are correct it is 10% and not 20%. Still, it is a major investment offer if it goes through.

This is a convoluted issue. I will address it in a separate post. But as it can be seen from the articles
and also basing on their preceding investments in other companies,
they would only invest, in positive case, less than $ 1.5B, which is very little compared with the needs.

The complete URL is (it seems to long for the Forum software):
http//yahoo.reuters.com/news/articlehybrid.aspx?type=comktNews&storyID=urn:newsml:reuters.com:20070518:MTFH43229_2007-05-18_10-01-50_L18138158&pageNumber=0&imageid=&cap=&sz=13&WTModLoc=HybArt-C1-ArticlePage2
See also the much more detailed
[i]http://www.khaleejtimes.com/DisplayArticleNew.asp?xfile=data/business/2007/May/business_May594.xml¡ìion=business&col=[i]

If you cannot open it, I could E-mail them to you.

Quoting Stitch (Reply 41):

No, it referred to the A330, period, which includes the A330-200 and A330-300. This is why most of us specifically identify the model number when we don't mean the family as a whole.

You mentioned only the A330-200 and I commented that if an airline need about 250 pax, the
B777-200/200ER
is too large and therefore in this case not competitive, In spite this, the B772 sold 518, the E332 sold
393, both have only 37 open orders each. So why you wrote that the A330 knocked the B772 out ??

Quoting Stitch (Reply 41):
And yet the 767 family sells two frames for every three frames the A330-200 does... Not bad for an "uncompetitive" family.

Agreed, but this is due to the B767F. The pax version has only 23 open orders.

Quoting Stitch (Reply 41):
Not when those four or five independent sources all quote the same original rumor.

When I wrote independent I meant precisely that the source shall not be the same

Quoting Stitch (Reply 41):
It is impossible to discuss the current situation with EADS and Airbus in a vacuum. This is not an episode of "South Park" and a simplistic Mr. Mackey statement of "EU Government Oversight is Bad, m'kay?" is not going to cut it when it comes to having a reasoned debate on the situation.

To be frank, it is this attitude which makes it so difficult to try and actually discuss anything with you and is why many "independents" on this board, to say nothing of the "Airbus Aficionados" view you as nothing more then a simple anti-Airbus shrill or a member of the "Boeing Boosters

Stitch, I must reverse your statement. I like to discuss with you, and you do it generally in a nice way,
but sometimes when you do not find arguments, you try to push me out in such unwarranted manner !!
Did you see me attacking anybody personally, even if sometimes plainly insulted ??
The tactic to say "oh you bad man, you are saying this because you hate them !" does not work,
especially when the issues involved base on facts.

Objectively: what I said about interference is not more than the co-CEO Enders just said and also
mentioned in a less hard form by Gallois, Lagardere and Bischoff
And have you thought that if I wished Airbus destroyed I would loose my time trying to find solutions
of their crisis ?
In such case I would lean back comfortably and wait that they reach the comatose stage due to their
self-inflicted (better said EADS inflicted) wounds !!
And as long the Airbus aficionados (and also the independents which desire their survival to provide
competition) do not realize that to cure the patient the sickness must be acknowledged,
no solution will come forth!!

Quoting Stitch (Reply 41):
Fiddlesticks. The 707 was just a faster mode of transport. And the 747 just flew farther and carried more people so it made air travel cheaper and therefore more accessible.

Now you are applying hind vision. As yourself stated, many argued that the increase of pax will
not justify their high price, also arguments as the increase noise. Again: all was totally new,
differently as for the A380.

Quoting Stitch (Reply 41):
I'm sorry, but that is the definition of "an independent Airbus". It would require the three partners to fully divest their commercial divisions as well as spinning off Airbus UK into a new consortium, independent of EADS. Essentially, what Airbus was before the merger.

AirBus would continue to be dependent exactly as they are now, but the "mother" will be reasonable
and not influenced by political and particular national interest catering "boyfriends" (I could use a more
precise word!)

Quoting Stitch (Reply 41):
They might, but they're going to require much more...insurance...then what Airbus now enjoys as part of EADS through RLA. Airbus will be lucky to get the $15-20 billion needed to launch the A350 and A320RS at the Prime Rate, much less the Central Bank Rate. And then there is all the work that needs to be done to form and administer the consortium, which is going to draw internal resources and focus from the job of building airplanes..

.

Totally agreed. The "mother" is absolutely necessary. Therefore I wrote that the divestment must be
done by a sale of Airbus to a first class and FINANCIALLY POTENT company, which would not need
to consider undesired investments to raise the needed money for the Airbus development

Quote:
Of course, this all applies to an independent EADS, as well, but it is far better, in my view, that EADS as a whole move towards being privatized then pieces of it.

Again: totally agreed. but do you think that the French government will agree to take its fingers out of
the pie ??
This would go against the ingrained philosophy that the state must show the big enterprises how to
do things, help financially and in exchange of its wisdom and money, expect that the company will
humbly accept their guidance and very important, personnel suggestions (!). And M. Sarkosy, being
a French politician, will do not differently, his first action were promising the unions that the state will
put the money as far as needed (the statement they will sell their stake I would not take it seriously)
and to tell the Germans that their money would be welcome, but we, the French, must have the last
say! The Minister of Louis XIV, M. Colbert, creator of the "Laisser Faire, Laisser Passer" concept,
would turn in his grave looking on his today's countryman.

Sorry, here I am being sarcastic, but realistic.

regards

Aminobwana
 
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Stitch
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RE: To Succed, Airbus Should Be Divested By Eads

Sun May 20, 2007 3:48 am

Quoting Aminobwana (Reply 42):
You mentioned only the A330-200 and I commented that if an airline need about 250 pax, the B777-200/200ER is too large and therefore in this case not competitive, In spite this, the B772 sold 518, the E332 sold 393, both have only 37 open orders each. So why you wrote that the A330 knocked the B772 out ??

I did mean both members of the A330 family (hence I used A330), because the 767-400ER is Boeing's closest competitor in size to the A330-200 and the 777-200 is the closest competitor in size and range to the A330-300.

Quoting Aminobwana (Reply 42):
Agreed, but this is due to the B767F. The pax version has only 23 open orders.

I am not speaking just of 2007's orders for the A330-200 and the 767-300ER/F, but of all orders since the launch of the A330-200 and that ratio does not include the 52 767-300 freighters because until this year Airbus did not offer a factory freighter model of the A330-200 so I did not feel it correct to also count 767Fs. It also does not include 21 767-200ERs since the A310 better competes with her nor the 6 767-300s because that is A300 territory.

Since her first sale in February 1996, Airbus has sold 393 A330-200s. Since February 1996, Boeing has sold 241 767-300ERs and 767-400ERs. So, historically the A332 wins 3.2 orders for every 2 orders the 763ER/764ER wins.

Quoting Aminobwana (Reply 42):
When I wrote independent I meant precisely that the source shall not be the same

Well some of the "biggest" stories like Airbus selling the A350-800 and A350-900 to EK and QR for the same price as the 787-8 was only reported "fresh" by the Times. Every other story I saw linked to that claim in this forum themselves used the original Times article as a basis.

Also, most articles I have read that say EK is getting the A388's for 50% off all point to an original - and highly disputed - paper written by an analyst who I believe was actually hired by Boeing to write it in the first place!

Quoting Aminobwana (Reply 42):
The tactic to say "oh you bad man, you are saying this because you hate them !" does not work, especially when the issues involved base on facts.

But by your own statements, the only facts you wish to discuss are the ones that take place right here and right now. You state you are not interested in the past, but only the present. Yet any student or professor of history - and this issue has a lot of history behind it - will tell you that it is not possible to look at only the present.

In order to (hopefully) better make my case, I will use an example from a decade ago:


In the third quarter of 1997, Boeing recorded a $696 million loss. In addition, Boeing reported the earnings for that quarter would be reduced by $1.6 billion, even as revenues rose $2.4 billion compared to the 3rd quarter of 1996. That day Boeing's stock lost a bit under 10% of it's value ($54 to $50).

Now, if at that time I said "This is it! Boeing Commercial is doomed! They need to be freed from the incompetent grasp of President Ron Woodard and Chairman Phil Condit and spun off or Airbus will control the entire market!", a dozen or more members would immediately point out that:

  • Boeing's deliveries in the 4th quarter of 1996 rose 40%.
  • Boeing's profits in the 4th quarter of 1996 rose 14%.
  • Boeing's profits in the 1st quarter of 1997 rose 300% compared to the 1st quarter of 1996.
  • Boeing signed a 20-year exclusive delivery deal with DL, CO and AA for over 250 aircraft worth over $16 billion and ILFC ordered 61 jets worth $4.5 billion.
  • The total production rate was increasing from 29 to 43 planes a month.
  • Boeing had delivered 272 planes and was on track to sell well over 300.

Looking at all that, the situation doesn't seem so dire, does it? 20 years worth of guaranteed orders. Orders and deliveries rising. Production rate increasing. And profits climbing strongly.

Yet all that happened in the past, so I don't care. No, all I care about is that right this second Boeing lost $700 million and will see revenue decrease by over twice that. So I tell those people - and anyone else who tries to point out that Boeing is still strong - that Boeing Commercial is doomed by their own incompetence and the fact that they just lost $700 million proves it without a doubt.

Frankly, if I was lucky, I'd be laughed off the forum. More likely, I'd be savaged by the "Boeing Boosters" who would call me a troll and a pro-Airbus / anti-Boeing shrill. If I didn't live in the United States, I'd be accused by many American members of being anti-American and "jealous" and a bunch of other stuff. All because I refused to look at "the entire picture" and only concentrated on one, isolated second.

And now, a decade later, I'd look like an idiot for saying Boeing Commercial Aircraft was doomed now that they've had two consecutive 1000 order years and could very well pull off a third. Now that their latest plane is the fastest selling commercial airline in history. That even their "ancient" models like the 767 are being ordered by the dozen or even the score every year.

Anyone who remembered what I had posted in 1997 would be serving me humble pie and crow ala mode and I'd deserve to choke it down with a tall glass of bitter dregs. Big grin



This, sir, is why it annoys me when you refuse to look at Airbus' past history and how their successes and failures helped steer them into the position they are today. Because in ten years, if Airbus is still here and healthy and dominant again, you are going to be called on it. And your opinions and statements are going to be colored in the eyes of many because of that, just as they are starting to be now in the eyes of some. This is not something that happened because of the hubris of Noël Forgeard and Gustav Humbert alone. Nor because Jacques Chirac and Gerhard Schröder wanted to use Airbus as a "jobs program" for their respective countries.

Just as Boeing's problems in 1997 were not caused solely by Ron Woodard and Phil Condit and Harry Stonecipher.






Quoting Aminobwana (Reply 42):
AirBus would continue to be dependent exactly as they are now, but the "mother" will be reasonable and not influenced by political and particular national interest catering "boyfriends" (I could use a more
precise word!)

So EADS would just become a holding company with no control or influence over Airbus? I don't see how that could be put into practice as long as DaimlerChrysler Aerospace, Aérospatiale-Matra and Construcciones Aeronáuticas did not divest themselves of their commercial divisions.

It would be like Boeing Commercial Airplanes was a part of Boeing, but W. James (Jim) McNerney, Jr. had absolutely no say in how BCA was run and in fact provided no support to, nor derived any revenue from, BCA. In fact, none of the Executive Council other then Scott E. Carson would have anything to do with BCA. And Carson would be required to fund all of BCA's operations separately from the rest of Boeing.

I just don't see how that would be possible unless BCA became a separate, independent company and just licensed the name "Boeing Commercial Airplanes" from the Boeing Corporation itself.

Quoting Aminobwana (Reply 42):
(T)he divestment must be done by a sale of Airbus to a first class and FINANCIALLY POTENT company, which would not need to consider undesired investments to raise the needed money for the Airbus development.

Who could afford to buy the commercial divisions of DaimlerChrysler Aerospace, Aérospatiale-Matra and Construcciones Aeronáuticas? Boeing? The Russians? The Chinese?


As to your last comment about how the French government views French industry, I am not qualified to comment, so I will not.
 
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keesje
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RE: To Succed, Airbus Should Be Divested By Eads

Sun May 20, 2007 3:57 am

Quoting Stitch (Reply 41):
And yet the 767 family sells two frames for every three frames the A330-200 does... Not bad for an "uncompetitive" family.

The 767 was/is a very succesfull aircraft family more the 1000 sold since 1979. It´s econimcs are still quiet good if range & cargo capasity aren´t that important (e.g. regional leisure flights). However last time I checked Boeing was producing 1 767 every two months & selling cheap to keep the line open for KC767, A330 producing 7 / months & rising.

Quoting Aminobwana (Reply 40):
Boeing has at this moment no equivalent to the A332 and this is the reason that the A300, as the only successful Airbus wide body, did and still does well, until the B787 becomes available.

The 767-400ER is equivalent to the A330-200, the 787 is directly aimed at it´s position (250 seat long haul with a lot of cargo). The A300 might have been succesfull but is out of production. The A330 (200, -300, F) seems more succesfull.
"Never mistake motion for action." Ernest Hemingway
 
zvezda
Posts: 8886
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RE: To Succed, Airbus Should Be Divested By Eads

Sun May 20, 2007 4:14 am

Quoting Keesje (Reply 44):
However last time I checked Boeing was producing 1 767 every two months

No. The 767 production rate has been 1 per month for several years. It was never 1 every two months.
 
Wsp
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RE: To Succed, Airbus Should Be Divested By Eads

Sun May 20, 2007 4:25 am

Quoting Aminobwana (Reply 23):
What I trying to do, with the help of other knowledgeable members, it to propose a solution
to this situation, which is so bad that the President of France, immediately after assuming his
office, considers this as one of his two priorities. But is seems that the AIRBUS enthusiasts
within the Forum do not agree with him, assessing that there is no major problem

Again: closing the eyes to the reality does not solve anything.

So when we have the next shooting involving young people and suddenly all politicians rush to the microphones to propose various bans on "dangerous" games/movies/websites etc. then we must assume that since it has become a priority for top politicians then it must be really bad? And when after two days the topic is all forgotten and the politicians rush to the next topic de jour then we must assume that the "problem" has been solved?

Quoting Zvezda (Reply 25):
The problem is not that Airbus is part of EADS. The problem is that EADS is an admixture of private enterprise and government bureaucracy. The solution is to fully privatize EADS.

You should keep in mind that after a full privatization EADS will have to spend significant amounts of money to lobby governments and buy politicians. This can easily go into the millions  mischievous 

Quoting Aminobwana (Reply 27):
But it really does not show that he is otherwise free
from from board restraint. And let not forget when Gallois, himself board member and EADS co-CEO,
presented last January to the Board a first.less diluted and much announced draft of Power 8 to the
Board, it was resoundendly rejected, putting him and EADS in a terribly discomfort.
And the relation between French and German has certainly not improved since then !!

IIRC there were two board meeting within days. All these meetings are non-public. What you present here is pure conjecture. But if you claim to know that the plan was watered down then please give us the details. Which items were removed from the plan?

*AND* more importantly for your theory to make any sense you should also provide us with details that these supposedly removed items where note merely items that the board rejected in their legal function as overseers of Airbus but explicitly because of nationalistic non-commercial considerations.

Quoting AirFrnt (Reply 30):
The entire Christian Streiff episode seems to indicate that.

From what is known they wanted to be kept up-to-date on a major restructuring of the company they are supposed to oversee. But Aminobwana's claim is that they were overriding Streiff's decisions because of nationalistic and non-commercial considerations. I am still waiting for him to provide sources that prove that.

Quoting Aminobwana (Reply 34):
A salesman wants to sell and earns proportionally, and it is a duty of the top management to
restrain him from damaging the company. Obviously this was and is not the case at Airbus.

If Airbus salesmen earn commission based on revenue not profit then the managers that have approved these contracts are to blame. But of course this is pure conjecture since no one here knows these contracts and what payments the salespeople receive.

Quoting Aminobwana (Reply 34):
Anyway, Mr. Leahy succeeded to convey the impression to many inside and outside EADS/AIRBUS
(incl many Forum colleagues) that things are not so bad !! Obviously he should not survive any real
restructuring!

Poor Mr. Gallois, until now he had to ask Sarkozy, Merkel, Daimler, Legardère about every personnel decision, now he needs to take a.net into account too... Frankly I suspect Leahy gets a rise every time certain members of this board throw some dirt in his direction.  stirthepot 

Quoting AirFrnt (Reply 38):
I don't know why this keeps coming up, because it's inaccurate, and widely known to be inaccurate. ITAR shoves a hard barrier between classified (and the composition and construction of the B-1B and B2 are about as classified as it gets) data and unclassified. There are stories around how some of the data leaked, and screwed part of the early 787 program, as they then had to go and redo all of the calculations and experimentation that had led to the data that was used in the first place.

You can take a look at what NASA does, and say that maybe that helps Boeing, but it has helped Airbus as well. This is just as inaccurate as the constant mantra from the Boeing people that Airbus can give planes away because of the European launch aid.

We are talking about decades of various research programs with dozens of researchers gaining personal experience, doing thousands of experiments with different materials, processes etc. With thousands of failed experiments. With thousands of small observations at the sidelines etc. etc. Boeing would be utterly incompetent if they were unable to transfer this knowledge into their civil programs. And for the NASA programs Boeing would be utterly incompetent if they would attempt to squeeze all that detailed knowledge into those mandatory few hundred pages of the final report.

They had to redo some experiments that they knew in advance would work, whose results they probably already knew down to 10 decimal digits precision? Wow, thats really an unsurmountable hurdle!

Please understand me correctly, I have nothing against this, I think EADS should do the same because these military programs have delivered lots of progress for civilian applications. But listening to these absurd denials that want to make you believe that the poor people at Boeing Commercial don't even know the phone numbers of the people at the military division is really insulting the intelligence of the readers.

Quoting Aminobwana (Reply 40):
Again, lets speak of the last years and particularly 2006. Where is the source ??

Check out the press conference for the 2005 earnings. They pointed out their margins and that they planned to operate (and calculate) in the future based on these margins.

Quoting Aminobwana (Reply 40):
I have already repeatedly stated that I am not proposing an independent Airbus, but to transfer its ownership
to a private financially potent entity, which would ensure a sound management following sound economic
criteria.


Hmm what you describe sounds like a hedge-fund... Sarkozy will end as Louis XVI 2.0 of he does that.  fight 
 
User avatar
Stitch
Posts: 26783
Joined: Wed Jul 06, 2005 4:26 am

RE: To Succed, Airbus Should Be Divested By Eads

Sun May 20, 2007 4:55 am

Quoting Keesje (Reply 44):
The 767 was/is a very succesfull aircraft family more the 1000 sold since 1979. It´s econimcs are still quiet good if range & cargo capasity aren´t that important (e.g. regional leisure flights). However last time I checked Boeing was producing 1 767 every two months & selling cheap to keep the line open for KC767, A330 producing 7 / months & rising.

Why must you always get in the little digs at Boeing, my friend?  Smile

Seriously, many airlines fly the 767-300ER all over the world, with flights close to 6000nm in length in three classes with good payloads upstairs and down. And when it comes to pricing, the 767's "discount rate" in 2005 and 2006 was actually lower then the A330's. The A330 family is truly an amazing one that continues to show itself to be a competitive, desirable, and relevant platform for airlines around the world in all kinds of missions.

It doesn't need "backhanded compliments" cast at it's competition to make it look good. And that is because it is good.  thumbsup 

Quoting Wsp (Reply 46):
You should keep in mind that after a full privatization EADS will have to spend significant amounts of money to lobby governments and buy politicians. This can easily go into the millions.  mischievous 

That's just the cost of doing business.  angel 
 
aminobwana
Topic Author
Posts: 923
Joined: Tue Apr 10, 2007 7:32 am

RE: To Succed, Airbus Should Be Divested By Eads

Sun May 20, 2007 6:20 am

Quoting Stitch (Reply 47):
Quoting Wsp (Reply 46):
You should keep in mind that after a full privatization EADS will have to spend significant amounts of money to lobby governments and buy politicians. This can easily go into the millions.

That's just the cost of doing business.

Here (!) I agree with STITCH. Millions, yes, but not billions misspent, as now

aminobwana
 
aminobwana
Topic Author
Posts: 923
Joined: Tue Apr 10, 2007 7:32 am

RE: To Succed, Airbus Should Be Divested By Eads

Fri May 25, 2007 4:28 am

To complete the documentation of the developing events, see the following:

More comments follow later, but the most relevant points in this 8 URL's and general Press being:

a) Contrary to optimistic statement by M. Sarkozy regarding an agreement with Fr. Merkel, she
stated that the only agreed to the urgency to discuss the problems, the next step being in 2
month (July) in Toulouse.
There were negative German comments regarding the request to lift the equal power of French
and German interests in EADS.

b) Russia stated not to have interest to invest in EADS unless they participate in developments
of new aircrafts and to have a say in EADS. Previously there were hints that the Aeroflot
deal depends of the same issue and that they were upset by EADS refusal to comply with their
wishes

c) EADS addressed the European Central Bank not to raise interest rates as this would be negative
for the company's exports (a request which lifted many eyebrows as considered unappropiate).

d) EADS is between several enterprises eyed by Dubai's Investment funds for an investment of max.
$ 1.5 B. They are in a period of due diligence. as they are interested in undervalued stock with good
growth perspective. At this moment, the consensus is mixed, but in average SELL.
At this moment, it is difficult to see if this is indirectly related with the Qatar investment study.

LIST of URL's:

Europe, EADS : Mme Merkel "reserrve" sur les projets de M. Sarkozy, selon le "Spiegel"
http://www.lemonde.fr/web/article/0,1-0,36-912766,0.html

No agreement yet on EADS steps - Germany
http://investing.reuters.co.uk/news/..._RTRIDST_0_EADS-GERMANY-URGENT.XML

Russia links EADS stake to joint aircraft deal
http://yahoo.reuters.com/news/Articl...2775_2007-05-21_07-27-50_L21531219

Pour Airbus, une hausse des taux ne serait "pas du tout une bonne nouvelle"
http://lemonde.Fr 22.5

Airbus ¨C 'spoilt child' of EADS
http://www.cafebabel.com/en/article.asp?T=T&Id=11045

EADS Faces Headwind for Rest of 2007 (this being an interesting overview by a serious source)
http://www.aviationweek.com/aw/gener...0Headwind%20for%20Rest%20of%202007

Dubai firm eyes stake in EADS
http://www.khaleejtimes.com/DisplayA...s_May594.xml§ion=business&col=

UPDATE 2 - Dubai-led fund may buy stake in EADS
http://yahoo.reuters.com/news/articl...13&WTModLoc=HybArt-C1-ArticlePage1

aminobwana

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