Ben Bernanke
Chairman of the Federal Reserve
If you want on or off my aerospace ping list, please contact me by Freep mail.
Posted on 10/10/2006 6:44:10 AM PDT by Righty_McRight
PARIS - The new chief executive of Airbus pledged job cuts at the troubled planemaker and said Tuesday that its biggest handicap against rival Boeing is the weak dollar, not deep production delays for its superjumbo.
Parent company EADS named one of its CEOs, Louis Gallois, to lead Airbus on Monday, after his predecessor Christian Streiff resigned just three months into the job. Gallois also continues to serve as co-chief of European Aeronautic Defence & Space Company NV.
Gallois said on Europe-1 radio Tuesday morning that a new recovery plan "will be painful, because there will be job cuts."
He gave no figures or other details of the recovery plan, except to say that the company would discuss with employees and unions "how to move forward together."
The CGT union said last week the predicted cuts would involve about 2,000 employees at four French facilities.
Gallois did not focus on the delays with the A380 superjumbo that have sent EADS stock sinking this year and frustrated airlines worldwide. Instead, he focused on the weak dollar.
"Airbus' principal handicap vis a vis Boeing is the dollar that has collapsed," he said. Airbus' expenses are largely in the stronger euro.
Workers "know the constraints we live under, they know the dollar exchange rate and they know that the dollar will not recover," Gallois said.
Gallois also said that he disagreed with Streiff's warning that it would take 15 years to turn Airbus around.
Streiff's departure dealt a fresh blow to crisis-hit Airbus. The planemaker, which stunned investors in June by doubling the A380 superjumbo's production delay to one year, doubled it again this month to two years and said the holdups would wipe a total of 4.8 billion euros ($6.1 billion) off EADS profits over four years.
Streiff drew up a cost-cutting turnaround plan for Airbus that enjoyed strong support from EADS directors, but he clashed with the board over how the plan should be implemented and how much control he would personally exercise, according to three officials familiar with the discussions.
In an interview in Tuesday's Le Figaro, Streiff said he had not been allowed the "necessary operational powers" to do the job effectively and welcomed as "a step in the right direction" the combination of the Airbus and EADS roles for Gallois.
EADS owns 80 percent of Airbus and is tightening up supervision of the civil jet unit as it acquires the remaining 20 percent from Britain's BAE Systems PLC.
After concentrating massive resources on the superjumbo, Airbus was taken by surprise by Boeing's two-engine 787, which delivers better fuel economy than older four-engine Airbus jets in the same size category — a sales argument that has grown more persuasive with higher fuel prices.
Airbus took orders for 226 jets through Sept. 30, compared with the 723 announced by Boeing for the year through Oct. 3.
Shares in European Aeronautic Defence and Space Co. fell Monday ahead of Streiff's resignation but rose slightly Tuesday morning, gaining 0.55 percent to 20.27 euros ($25.55).
I had a group of Scout families come to America to visit our troop. That was the main and oft repeated observation....we live in big houses. You guys have lots of space.
Ben Bernanke
Chairman of the Federal Reserve
If you want on or off my aerospace ping list, please contact me by Freep mail.
How about a weak brain. There is no one else to blame except Airbus' Management.
Wow. What a mess for AB. I expect more "resignation" before the year is up.
I believe it, since it was a while ago. But I do remember the big euro dip/dollar surge, as it made me very happy for a time.
FROM OBSCURITY TO THE SPOTLIGHT
Born in Montauban in the southwest of France, Gallois graduated from the École des Hautes Études Commerciales and also attended the École Nationale d'Administration. Beginning in 1972 he worked in relative obscurity in various
Louis Gallois.
AP/Wide World Photos
. posts for France's Ministries of Economy and Finance, Research and Industry, and Defense. In 1989 he emerged in the spotlight when he was named head of the Société Nationale d'Étude et de Construction de Moteurs d'Aviation (Snecma), a state-run enterprise involved in developing and manufacturing civil and military engines for Mirage jet fighters and Airbus airliners.
Gallois made a good first impression on colleagues. He visited the company's factories on the periphery of Paris and appeared to be more businesslike than his predecessor had been. Over time, however, critics noted that Gallois was unsuccessful in resolving many of Snecma's basic problems, including an overabundance of workers, inflexible work practices, protectionist pricing, and corporate extravagance.
In July 1992 Gallois was appointed chairman and CEO of Aérospatiale, the state-subsidized company involved in France's aerospace and defense industries. Although widely credited with extensive restructuring and cost cutting, Gallois could not keep the company from losing money on an epic scale. Many analysts noted that Gallois was hindered by the fact that the industry was precariously divided between state and private ownership. Nevertheless critics of Gallois, as noted by Ian Verchere in the European, complained that he "failed to transform" the business "into a profitable operation while continuing to call on the state for lavish injections of capital to stave off bankruptcy" (April 18, 1996). For his part Gallois accused the French government of endlessly vacillating over whether to provide the additional funding that he needed to institute privatization and a new economic order within the company.
They built the A380 to show off, not because it made business sense, now the flying white elephants are coming home to roost---and it's quite a crunch.....
Yes, the Euro went from $1.20 to $0.80 to $1.35. It is currently about $1.25.
Well-liked by passengers?
As one that has flown many A320's as a passenger, include me out of that assessment.
Yyyyyyyeeeah. The dollar vs. the euro made you guys make bad strategic decisions with the A350 and A380, and kept you from standardizing your CAD/CAM platforms across your plants in France and Germany. Got it. Riiiiiight.
}:-)4
So true, in America my wife and I would easily be in the top 5% (or better of the highest earners. In Germany we are, however, easily in the top 5% of taxpayers!! Sad, but true.
The problem is not the Euro. It's the Euroweenies!
I agree!
From here on out, the fourth envelope should say;
"Blame George Bush and the Americans."
It's not due to a weak dollar. It's due to a strong euro.
Them's the downside of having a monetary policy that is primarily geared toward supporting your currency rather than supporting your economy.
airbus will fail cuz it is under political control and governments can't run businesses.
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