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Airbus: National Jobs Over Rational Economics
Airbus: National Jobs Over Rational Economics
EADS Fails to Agree on National Shares of Airbus Jet
By Andrea Rothman
Feb. 19 (Bloomberg) -- European Aeronautic, Defence & Space Co. halted
plans to reorganize its Airbus SAS unit after French and German
executives on the board disagreed about distribution of work on a new
widebody airliner.
Airbus, the world's biggest planemaker, postponed an announcement
scheduled for tomorrow about cost cuts. EADS's board ``interrupted'
work on the proposal late yesterday after failing to agree on ``cross-
national sharing'' of the workload on the A350 XWB, Airbus said today
in a statement.
The company plans to slash 2.1 billion euros ($2.8 billion) in annual
expenses by 2010 to help pay for the development of the A350, which
will compete with Boeing Co.'s 787 Dreamliner. Airbus is short of cash
because of 4.8 billion euros in losses on the A380 superjumbo jet.
Delays on the A380 were caused by German and French developers using
different design software.
Cabin interiors on all the planes are done in Hamburg. EADS has been
looking at ways to cut costs by focusing widebody production in France
and single-aisle planes in Germany.
``I made proposals which I deem balanced, both from an industrial and
a technological point of view, and which serve our objective of
economic competitiveness,'' Louis Gallois, the Airbus chief executive
officer and the French Co-CEO of EADS, said in the statement. ``I wish
that they can lead to the consensus we urgently need.''
The German government on Feb. 12 said that cost-saving steps might
affect people within Airbus as well as workers at parts suppliers.
Economy Minister Michael Glos met last week with Gallois to discuss
the plan and express the determination that jobs be protected at
Airbus's seven German sites and at suppliers.
``Apparently the Germans want more work on the A350, but this flies in
the face of everything Airbus wants to do in rationalizing
production,'' said Olivier Esnou, an analyst at Exane BNP Paribas in
Paris who has an ``underperform'' rating on EADS shares. ``It's just
not coherent.''
Glos in early February told German newspaper Bild am Sonntag that
Germany would ``review'' its orders for military goods from EADS
should significant parts of Airbus's production be moved from Germany
to France.
``I don't think it's such a bad thing that the date has been postponed
a bit,'' Glos said today at a regularly scheduled news conference in
Brussels. ``We should have an equal sharing out as far as possible.''
Germany doesn't directly own shares in EADS, whereas France owns 15
percent. Holdings in EADS are evenly balanced between the two
countries. When the company was created in July 2000, Stuttgart-based
DaimlerChrysler AG owned 30 percent, the French state 15 percent; and
Lagardere SCA, a French media company, 15 percent.
When DaimlerChrysler sought to sell a third of its remaining 22.5
percent stake in EADS in recent months, the government urged German
banks and states to purchase the shares. On Feb. 9 a group a of German
banks and regional governments paid 1.5 billion euros for 7.5 percent
of EADS.
EADS Fails to Agree on National Shares of Airbus Jet
By Andrea Rothman
Feb. 19 (Bloomberg) -- European Aeronautic, Defence & Space Co. halted
plans to reorganize its Airbus SAS unit after French and German
executives on the board disagreed about distribution of work on a new
widebody airliner.
Airbus, the world's biggest planemaker, postponed an announcement
scheduled for tomorrow about cost cuts. EADS's board ``interrupted'
work on the proposal late yesterday after failing to agree on ``cross-
national sharing'' of the workload on the A350 XWB, Airbus said today
in a statement.
The company plans to slash 2.1 billion euros ($2.8 billion) in annual
expenses by 2010 to help pay for the development of the A350, which
will compete with Boeing Co.'s 787 Dreamliner. Airbus is short of cash
because of 4.8 billion euros in losses on the A380 superjumbo jet.
Delays on the A380 were caused by German and French developers using
different design software.
Cabin interiors on all the planes are done in Hamburg. EADS has been
looking at ways to cut costs by focusing widebody production in France
and single-aisle planes in Germany.
``I made proposals which I deem balanced, both from an industrial and
a technological point of view, and which serve our objective of
economic competitiveness,'' Louis Gallois, the Airbus chief executive
officer and the French Co-CEO of EADS, said in the statement. ``I wish
that they can lead to the consensus we urgently need.''
The German government on Feb. 12 said that cost-saving steps might
affect people within Airbus as well as workers at parts suppliers.
Economy Minister Michael Glos met last week with Gallois to discuss
the plan and express the determination that jobs be protected at
Airbus's seven German sites and at suppliers.
``Apparently the Germans want more work on the A350, but this flies in
the face of everything Airbus wants to do in rationalizing
production,'' said Olivier Esnou, an analyst at Exane BNP Paribas in
Paris who has an ``underperform'' rating on EADS shares. ``It's just
not coherent.''
Glos in early February told German newspaper Bild am Sonntag that
Germany would ``review'' its orders for military goods from EADS
should significant parts of Airbus's production be moved from Germany
to France.
``I don't think it's such a bad thing that the date has been postponed
a bit,'' Glos said today at a regularly scheduled news conference in
Brussels. ``We should have an equal sharing out as far as possible.''
Germany doesn't directly own shares in EADS, whereas France owns 15
percent. Holdings in EADS are evenly balanced between the two
countries. When the company was created in July 2000, Stuttgart-based
DaimlerChrysler AG owned 30 percent, the French state 15 percent; and
Lagardere SCA, a French media company, 15 percent.
When DaimlerChrysler sought to sell a third of its remaining 22.5
percent stake in EADS in recent months, the government urged German
banks and states to purchase the shares. On Feb. 9 a group a of German
banks and regional governments paid 1.5 billion euros for 7.5 percent
of EADS.
