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).
Our home equity has increased a great deal since 1997. I think a lot of the increase in the price of housing has been driven by the tax law changes, passed in 1997 that exempted taxes on capital gains up to $250K for singles and $500K for couples.
I think it is mostly related to the lower interest rates...See what happens if interest rates hit 9%.
During the last great run in real estate values (January 1976- January 1979) the fed funds rate rose from 4.87 to 13.82 percent. While that was happening home demand and prices continued to skyrocket. Low interest rates play a role but demand is much more important.
Look at the real estate bear markets of 1974-75, 1980 and 1990-92. In each of these the prime rate was falling during the years mentioned. Internationally, real estate fell in Japan throughout the 1990s despite interest rates falling to near zero.
I know someone who took a couple courses in ArcGIS from the Geography Dept at a major university. Not as intuitive as AutoCAD from what I can tell. However, I would imagine knowing ArcGIS would be a highly valuable specialized skill. My very first job was mechanical drafting.
LOL! Dassault is to Airbus as Airbus is to Boeing?
ArcGIS has better query tools for mining data. It's just that AutoCAD could run on MS-DOS based computers rather than Unix work stations, so we used AutoCAD. Computing hardware is much cheaper now, so functionality is more important. AutoCAD is great as a drawing tool for creating map entities, but ArcGIS is better for linking those entities to databases. AutoCAD Map has the ability to have multiple users check out portions of the same drawing and write the changes back to that drawing, but ArcGIS being a true GIS does those operations better.
Ok, what drives demand?
To Euro-peons, bad stuff is always someone else's fault, and fixing it is always someone else's responsibility.
So, Airbus' troubles are not an uncompetitive product mix or serious market missteps... it's that bogeyman of all socialists, Bush.
But actually, they have a point. The "weak" dollar was actually one of the more brilliant economic moves Bush has made. By bringing the dollar back closer to historic norms with respect to world currencies (versus its artificially inflated "strength" during the preceding decade), our export economy got a much-needed jump-start, after two decades of withering from Clintonian exchange-rate mismanagement and the assaults of NAFTA, GATT and so on. Europe was caught flat-footed. Unfortunately the Chinese yuan still mostly pegged to the U.S. dollar, so its export economy is benefiting too.
But all in all, Airbus' trouble is a product line that misses the market. One example: the A350 is a lovely bird, one of the prettiest in the sky and a solid machine with a good safety record, but it's a quad-jet competing against the sublime Boeing 777, a much-more-efficient twinjet, and the new 787 dreamliner, also a twinjet and super-ultra-efficient. Meanwhile Airbus put all its eggs in the A380's basket... the Edsel of the air.
From 1997 to 2004 we cashed in more than $3.5 trillion in capital gains. This is more than the previous 20 years combined. In terms of numbers, our population is also growing rapidly. Also and to your point, lower interest rates has allowed more renters to become owners and new technologies have reduced the cost of obtaining a mortgage and standardized a set of lending guidelines that has allowed for a more precise measurement of a borrower’s credit risk.
I also think the fact that many new kinds of mortgages have become available has helped demand. The secondary mortgage market has grown and matured so that many kinds of mortgages can now be packaged and sold as mortgage-backed securities. The mortgage market has also become more specialized, as firms concentrate on different pieces of the market, including origination, servicing and securitization.
All these things have played a role in increasing demand. The rapid rise in home values has been limited to specific regions and is in no way being experienced by the entire country. Many areas continue to see average increases that are unremarkable. This shows that demand for housing is based on geographic desirability which is also an important consideration.
You are obviously very well informed. Thanks for the info.!
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.