'New delay' to Airbus super-jumbo

I have word of some suppliers to Airbus being upset as well; many had to fund parts development themselves to be awarded contracts, they now have scheduling problems of their own to deal with.

There is contract language in many such arrangements that guaruntees payments and provides penalties and damages for loss of income, etc.

Airbus may soon be taking fire from two sides.

Emirates asked for over $100 million, Quantas for about $40 Million for their second pack of airplanes. They have already received $40 for the first part of the order.
And Virgin is rumoured to have asked for about £20 Million...

However Lufthansa, Air France and Singapore have been quite about compensations...

More seeds of doubt to be sown:

business.timesonline.co.uk...

Sounds like there is more trouble than meets the eye.

Its no good them trying to rearrange the deckchairs, they need to be getting on with the real work.

You want to know the problem?


There are too many f__king bean counters instead of engineers in the decision making positions. If these dim-witted a_sholes were removed, then none of these problems would ever have emerged.



Its a problem not soley confined to Airbus either. There are too many d_ckheads out there more concerned with the share dividend than actually producing a good product and letting profitability take care of itself.

Agreed, Kilcoo, Accountants and Lawyers kill what Engineers and Salesmen create, in any field.

BTW, it's official; Airbus is going to have a new chairman:

news.yahoo.com...

While of course I will continue to defend the A380 as a concept and as an aircraft against what I see as ill-founded or ill-informed criticism, I feel nothing but contempt for what looks like an expensive game of musical chairs.

I have no affinity for Streiff per se but his quick departure leaves me pondering a couple of qustions;

Does Steiff think the job is too big and the goals beyond reasonable expectation?

Or does Airbus find his pill too hard to swallow and are we going to see a half hearted, watered down recovery plan in its place?

Well it's a surprise alright
but
being such a surprise one has to wonder just what lies behind EADS accepting the resignation (which we'd heard was threatened in an attempt to force their hand re the latest restructuring proposals) and the market instability it must cause and not go along with the proposals from Mr Christian Streiff.

Maybe he proposed changes which refused to recognise the political realities that embrace Airbus and it's operations (and no matter how much one might day-dream otherwise such enormous high-tech endevours - everywhere - have political just as much as they have commercial considerations).

Sounds like the new guy has at least a background in senior management in mass-transportation which Mr Streiff did not.

......as for the compensation charges we hear customers are looking for?
Mere loose change in the overall scheme of things.

Hi, everyone! Just checkin' in with my bros across the pond!

Completely unbiased and objective Off_the_Street

What this means is the governments will run the show, again. So goodbye reforms and reduction of bean-counters.

Hello again to endless committees and bureaucracy.

I hope it doesn't happen, at least with the current French administration (I actually think the German chancellor will send Airbus into a pit), or they will destroy Airbus were they are going to have thousands of jobs of nothing.

I don't think Airbus needs layovers, I think they are all grown up and need to get away from under mommy's skirt and face the world on it's own.

There's a great article in today's (10/10) WSJ. Apparently the "Power 8" plan will be implimented by Gallois, but the whole of Airbus is a structural mess with German, French, and now Russian government interference due to get worse.

It gives me a little satisfaction to do "I told you so" but I've been told to sell short on the company because this has not yet sorted itself out. They needed someone like Streiff to make hard business decisions rather than political ones based on how many jobs go to Germany vs. France.

This sort of thing scares customers, and although the order books may look full now, they could start emptying out in a hurry.

The Flight website is carrying an interview with Streiff himslef which they have translated from the original French source, here it is;

Strei ff interview

Good stuff, one wonders if there's a circular firing squad being formed over there.

The board of directors seems to have priorities other than stockholder profit maximization in mind, and if 5% of the stock doesn't entitle you to a seat, why hold the stock?

I heard today that "a shift of resources" to the A380 from other projects was underway at Airbus to prevent future delays. I don't pretend to know what that means.

Well Airbus's new chief is already getting to work. Louis Gallios is proposing cost cutting measures intended to reduce the financial effect of the delay in A380 deliveries. These measures include "painful" job cuts. The firm hopes to save around $2 billion in costs from 2010 onwards.

Source

Well I must admit it sounds exactly like I suggested; the man may well be a good manager (even if air transportation is not his background, building materials are) but it does look as if he was not up to the political aspects of the job.

It's amusing to see people here dismiss this as inconsequential when it so clearly is not.

This is particularly so when the cutting edge, high tech and large scale aero-industry everywhere is just as much a political animal as Airbus is in Europe.



[edit on 10-10-2006 by sminkeypinkey]

Its fukking cost cuts that started this mess....


But of course the d_ckhead managers and bean counters are too stupid to see that...



I would expect the job losses will be at Hamburg/Toulouse, it seems thats where most work duplication was occuring. Which is again the result of bad management.


Would it not be much more prudent to centre different design teams at different sites... say Hamburg works on the A320 improvement project, while Toulouse does the A350?



But I guess such a move would require something akin to common sense!

Going slightly off topic here but that reminds me how in the very early days of SA1, which was the name the A320 was developed under, there was talk of avoiding duplication of effort to maximise profit margins and of having the final assembly line in the UK, making use of the soon-to-be redundant BAC One Eleven assembly line at Hurn.

If only eh?

[edit on 10-10-2006 by waynos]

All kidding aside, this recent business is not all that good -- at least not in the long run -- for my company. There have been rumors that we're going to buy BAE, since they've been one of our best top-tier subs in a long time, but that could have some political fallout, too.

We're up in arms because we see Northrop Grumman as a stalking hourse for Airbus in the upcoming KC-X program. the Euros could say the same thing if we eat BAE: that they're now a stalking horse for Boeing!

It wasn't that long ago that we had the same problems Airbus does now, and it cost us first place in the business. Now we've fought back and Airbus has at least 5 years of playing catchup to us. but they must -- and they will -- remain competitive.

Right now, we're the best, but the only reason we are is unremitting pressure from Airbus. Competition makes everyone stronger, and we need competition as badly as you do. I have no doubt that sooner or later, EADS will re-organize as a profit-making rather than a neo-political entity, becasue if they don't, they will go out of business.

It's going to bean interesting situation in five years. My guess is that my company will still be the top dog, with Airbus right next to us, and both or us realizing that there are three dogs in this dogfight, and the rottweiler from Brazil has sharp teeth, indeed.

Update for yez:

New restructuring plans have proposals for design centres for a team, not specialist areas as is currently.

Talk of 10,000 lay-offs [from everywhere, engineers, paper-pushers, shop floor], most of which would be taken back on as the company sorts itself out.

The cuts are necessary to provide the funds to launch the A350. If the cuts aren't successful, no A350 - or maybe the original watered down one [aka no XWB].

One of the UK centres is likely to be closed, virtually certain to be Filton before Broughton.




I assume the A320+ project funds will be ringfenced and get priority over the 350, after all, its where the company revenues are. No word on that either way though.

[edit on 12-10-2006 by kilcoo316]

They have now announced that they have to sell significantelly more of these aircraft just to break even this will surely put them under even more strain? linkeh