Skip to comments.Airbus plans to cut 80 percent of subcontractors
Posted on 11/06/2006 5:30:34 PM PST by Righty_McRight
PARIS (AFP) - European aircraft maker Airbus plans to reduce by 80 percent the number of subcontractors used by the company as part of a vast restructuring plan aimed at reducing costs, a company spokesman said.
The number of subcontractors is to be cut from nearly 3,000 to about 500, the spokesman said, confirming a report in the Financial Times Deutschland published on Monday.
The group, based in Toulouse, southern France, also plans to cut its administrative costs by 900 million euros (1.14 billion dollars) in total by 2010 and its supply costs by 350 million euros over the same period, the spokesman said.
He added that the number of logistics facilities used by the company would be reduced from 80 to between four and eight.
Airbus announced in October that it planned to implement a cost-cutting program to compensate for the financial strain caused by delays to deliveries of its sumperjumbo A380 plane.
The A380 program is two years behind schedule and has suffered from higher costs as a result of wiring difficulties in the giant aircraft, which are capable of carrying up to 840 passengers and are set to become the biggest civilian jetliners in the world when they enter service.
Airbus has sharply revised down its profit targets for the A380 project, saying it will now have to sell 420 planes to break even instead of 270 as previously announced.
Nyuck nyuck nyuck. (three stooges)
I'm never setting foot on one of those things, if I can help it.
Wow...talk about going out with a bang!
Why do you need quality control inspectors anyway...and those expensive alloys, they didn't need them for the Hugo.
How much repercusion will this have in the US? (sp?)
The main repercussion of all this will be more orders for Boeing...
If you simply reduce the number of competing subcontractors - you can save on administration at the risk of being beat up on cost and performance.
Experience tells me that some faceless 'management' committee will suffer little damage from about 70% of the cuts, the other 30% will be the ones you needed the most for those pesky little issues no one else will touch.
If you reduce subcontracting and try to bring work into EADS shops you are going against every trend in industry and risking even greater cost overruns/quality lapses.
(You can't sue yourself, you can't withhold payments from yourself - 'yourself' has you over the barrel.)
Quality needs to be a separate measure - but I don't trust Airburst to handle that too very well.
Airbus needs 420 deliveries to break even. They have 176 firm orders. Best case, after few deliveries in 2008-09, they start full production of 45 A380's a year in 2010. It takes Airbus until 2020 to break even, and at what risk? Sick, sick, sick what pride has wrought. Boeing seems sincerely saddened by all this. They recognize that the world will demand competition for them and Airbus is committing slow suicide.
would you bet on there even being an A380
Airbus plans to cut 80 percent of subcontractors
If I were a bookmaker, these would be my odds:
NO--minus 280 (must bet 280 to win 100)
Yes--plus 230 (bet 100 to profit 230)
I am not even sure now. But I sure as hell don't like the idea of getting on one...as the days go by, it seems to become more and more half-baked, a plane put together by committee. And that ain't a good thing...
They are screwed. Their entire supply network will unravel unless they are able to cut those suppliers in the next couple of weeks. If you are an Airbust sub and you believe there's shot at gettin dumped are you going to be real anxious to invest more money and risk more of your capital? This move will lead to preemptive dumping and courting of Boeing.
How to zombify dead companies!
Two or three anyway.
Nothing like cutting your subs off to replace them with those real efficient 28 hour a week French workers,, good luck on getting co-operation with those same subs teaching Airbust employees how they produce those parts on time and at a reasonable cost... that learning curve is nothing to sneeze at... reliability will become a huge issue with any aircraft they're lucky enough to complete and maintenance will be a nightmare with so few to be in service and so much variety in the parts...
Right now those subs are resubmitting billing for past work and warming up their legal teams...
Before summer, Airbus will announce the end of the A380 program, after two primary customers select the new 747 instead and cancel their orders. Bank on it.
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