Posted on 10/15/2006 5:16:32 PM PDT by Righty_McRight
The head of Airbus' parent firm has said he is against state involvement in the business amid reports the German government may buy into the company.
Thomas Enders, the German co-chief executive of EADS, said there was "no reason" for Berlin to take a stake in the troubled enterprise.
Newspaper reports have suggested the German state may buy Daimler-Chrysler's 7.5% holding in the business.
The French and Spanish governments already own shares in the company.
Jobs concern
EADS has been weakened by costly delays to the flagship Airbus A380, with the first delivery of the high-profile plane put back to late 2007.
Airbus is planning 1.6bn euros ($2bn) worth of cost cuts, a situation which has alarmed German politicians amid reports that existing manufacturing operations there could be shifted to France.
Airbus operates two main plants in Hamburg and Toulouse.
I do not see state involvement as a good thing, even what we already have
Thomas Enders, EADS, co-chief executive
Some experts believe the German government would be in a stronger position to prevent job losses if it held a direct investment in the firm.
German Chancellor Angela Merkel has said no decision has been taken on whether it would invest in EADS but she also stressed that no options had been ruled out.
'Hysteria'
Speaking to the Austrian newspaper Die Presse, Mr Enders said he strongly opposed further state investment in the business.
"The prevailing hysteria over EADS and Airbus in Germany at the moment is completely out of place," he said.
Although he admitted that the plane manufacturer had "real problems", Mr Enders said it was not on the verge of financial collapse.
"I do not see state involvement as a good thing, even what we already have. Of course the company has strategic importance but Britain and the US show that states can make their interests count without direct involvement."
Airbus' pressures mounted earlier this month when chief executive Christian Streiff resigned.
Anyway you slice it, the Toulouse Goose is cooked.
This type of thinking is alien to me. I suppose with a stretch of the imagination one might start to think of farm subsidies but this seems odd.
At the end of the day, we do not want Airbus to go out of business...but they shouldn't ever get state $, let them live or die on their own.
But alas since States already own shares, there is no way they will be allowed to go out of business, therefore there is no real reason Airbus has to get its act together, and so on.
Thus argument is alien to me, as is the argument that we shouldn't wish for the dissolution of the Democratic party. There seems to be some sort of fear that to the victor will go all of the spoils and thereby no responsibility. I beg to differ.
I hope that the democrats cease to be and that the opposition party to the Republicans become something closer to our ideology, like a Conservative or Libertarian party. Similarly, I hope that a government funded Airbus ceases to exist and that a free market company takes its place as Boeing's competitor. One can dream can't he?
Please.
If you could, answer this one question: Do you think it's better for the consumer (ultimately passengers) that Airbus goes out of business?
Boeing would want that, but no competition ever made a company sharp.
It would make room for Brazil's Embraer or another second tier to grow, free(ier) market into a better competitor. Airbus is sucking up capital and space in what world wide seems to be a market for only two big companies. Maybe Embraer with the Russians and Americans. Who knows. But it won't or will happen a lot slower with Airbus getting fed capital by government I.V.s that they wouldn't get otherwise.
I think it would be very hard to raise the funds for a Boeing competitor. I fear it's State competition or nothing.
What I do find interesting here is that the German investment would just be a purchase of the Daimler-Chrysler investment, which would bring no new capital to the firm. So it would be of no positive value to the company, and that's probably why management is against it.
They know that this is going to be in support of the German operations of Airbus, which management seems to want to phase out. That lack of flexibility would darken an already grim picture for the company.
I've never really trusted Airbus since that crash in Long Island when the tail fell apart. While the cause was officially pilot error, it seems clear that the design should have been better engineered to anticipate same.
D
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