March 09, 2007
Airbus Woes Continue...

...and Boeing keeps chugging along.

Thomas Lifson continues his indispensable coverage of Airbus and Boeing in the American Thinker, reviewing the latest in Airbus's ongoing struggles. Those troubles include serious labor unhappiness with proposed restructuring at Airbus, to salvage the company from its increasingly uncompetitive state of affairs.

Lifson details the dreadful combination of excessive costs, ineffective product development, and lack of capital to launch the revised A350 to compete with Boeing's 787. All of which are small potatoes compared to the burdensome, multi-nation, political infighting affecting Airbus leadership.

Such turmoil occurs against the backdrop of Airbus losing its final customer for the A380 freighter, enhancing Boeing's already strong position in the not-so-inconsequential freighter market. Even where Airbus is doing well in securing more orders in the current calendar year, it continues to trail badly in the more valuable (and more profitable) widebody market. And that's even before the reported talks with fifteen different customers interested in assorted versions of the 747-8 come to possible fruition.

Good times.

Posted by Eric Earling at March 09, 2007 10:19 AM | Email This
Comments
1. This is more proof that the Liberal model is, to use their own cliche' UNSUSTAINABLE. The Toulouse Goose is cooked.

Posted by: JDH on March 9, 2007 10:27 AM
2. Yesterday the media announced the first orders for the 350xwb (competitor to the Boeing dreamliner) are starting to roll in. The only problem is that it is pure bullshit, what the orders rolling in represents is a "conversion" of an existing order for an older model 350. I know the media are pulling for Airbus over Boeing, but the transparency of their advocacy is ludicrous.

Posted by: JDH on March 9, 2007 10:31 AM
3. A couple of threads ago in the money for nothing discussion there were several comparisons to Europe. A lot of European style regulation is creeping into this state. Europe is a very beautiful place to spend time, but it has real structural economic problems and a lot of the social sytems are not sustainable. This company is like a camel, designed by committee. Unlike a camel, however, it probably won't work.

Posted by: WVH on March 9, 2007 10:52 AM
4. Socialism at work.

Posted by: JCM on March 9, 2007 11:05 AM
5. So yoa think this has anything to do with it?

EUROPE LAGS AS U.S. RACES AHEAD
Europeans once thought they had a better way -- a "third way" between socialism and capitalism -- that would deliver both income equality and economic growth. But in reality, the third way delivers neither -- and now Europe faces a massive, long-term problem of catching up to the United States, says Investor's Business Daily (IBD).

Eurochambres, a continent-wide business think tank concludes that the European Union (EU) is roughly 20 years behind the United States in economic development:

The United States reached Europe's current level of economic development -- as measured by gross domestic product per person -- back in 1985, a 21-year deficit.
Europe also lags behind in a number of other measures, including productivity (17 years), employment and R&D (28 years), and Internet use (four years).
Even last year, when the EU touted its strong rebound, growth came in at just 2.9 percent across the continent -- compared with 3.3 percent in the United States.
Per capita GDP in the EU would have to grow 8 percent a year for the next four years to catch up, and that assumes the United States stays at its 2005 level.
Why the difference? The United States has smaller government, less regulation and much higher productivity. It also has what Nobel Prize-winning economist Edmund Phelps recently called "dynamism" -- a culture of entrepreneurialism that doesn't exist in Europe, says IBD.

Unfortunately, Europe's policies happen to point in the same direction that congressional Democrats seem to want to take the United States. This would be a tragic mistake, says IBD. Democrats want more in the way of taxes, spending, regulation and labor costs and less in the way of free trade -- the very combination that repeated studies show has dragged down Europe's economic performance.

Source: Editorial, "Europe Lags as U.S. Races Ahead," Investor's Business Daily, March 8, 2007.

For text:

http://www.investors.com/editorial/editorialcontent.asp?secid=1501&status=article&id=258163758726158

For report:

http://www.eurochambres.be/PDF/pdf_Lisbon/070305-TimeDistanceStudy2.pdf


For more on Economic Issues:

http://www.ncpa.org/sub/dpd/index.php?Article_Category=17

Posted by: JDH on March 9, 2007 11:21 AM
6. Airbus crisis deepens with plunge into losses


http://news.yahoo.com/s/afp/20070309/ts_afp/franceaerospace_070309172850

Posted by: JDH on March 9, 2007 11:29 AM
7. From Yahoo News:
"The A380 setback came as French unions called for a one-day strike next Tuesday to protest 10,000 planned job cuts and the sale or closure of six Airbus plants under the "Power8" restructuring plan unveiled by Chief Executive Louis Gallois Wednesday.

German Airbus workers may join the strike, union officials said, along with staff at other EADS facilities in both countries>"

The cheese-eating surrender monkeys are at it again!

Posted by: John425 on March 9, 2007 11:31 AM
8. And the hits just keep on rollin' in.

From the Financial Times:

"EADS, Europe?s biggest aerospace and defence group, suffered an 86 per cent fall in operating profits last year, as its Airbus division plunged heavily into loss. It warned that Airbus would be hit by ?another substantial loss? in 2007."

Posted by: Ken on March 9, 2007 11:33 AM
9. A pro-American French Blog refers to AirBus as "AirBust"- LOL!

Posted by: John425 on March 9, 2007 11:36 AM
10. I wouldn't get too excited. It's great time for Boeing, but Honda already has a coporate jet and Toyota can't be too far behind. In a few years, Boeing might look a lot like Ford.

Posted by: ronin on March 9, 2007 12:05 PM
11. Ronin:

I agree with you. The key question is what is the amount of regulation in the states where Toyota and Honda choose to operate? Another question is what is the regulatory competitive environment in Japan and is it similar to what Boeing has to deal with here?

It is sometimes difficult to compare international corps because the operating envirnoments are so different. Airbust is really pathetic because it is failing with massive direct government subsidies.

Posted by: WVH on March 9, 2007 12:30 PM
12. Aribus essentially bet on the wrong horse. Boeing had thier own Super Jumbo 747 in the works but they got smart and scrapped it to focus on the 787. Now they've spent all this money on the A380 they don't have enough $$ to compete with their own 787.

Eventually Russia will join Airbus and bail everyone out before heading back to buisness as usual.

Posted by: Cato on March 9, 2007 12:33 PM
13. AIRBUS:
-obsolescent, ill performing products,
-products without customers,
-lagging in innovation,
-excessive administrative costs
-heavily unionized,
-union workers perceiving they are guaranteed lifelong employment with large benefits having no relationship to productivity or qualityof the entity,
-drenched in politics while ignoring their overall mission
-financial strength dwindling,
-increasingly reliant on lobbying Gov't for never ending cash infusions
-foreign competitors eating their lunch..

EDUCATION SYSTEM IN WASHINGTON STATE:
-wait a second, see above list!!

Posted by: Hank on March 9, 2007 12:34 PM
14. Hank:

I'm laughing so hard that I'm crying. Wait, I'm really crying because you are so spot on.

Posted by: WVH on March 9, 2007 12:38 PM
15. What this shows is how poorly governments do running any sort of service oriented enterprise.

Take Airbus, add in what happened at Madigan and you have a nice picture of what our health care system will look like once it is taken over by the Feds. And it will be taken over by the Feds.

Yippee.

Kudos to Boeing. When the fight got tough they put on the 8 ounce gloves and went at it.

Posted by: G Jiggy on March 9, 2007 01:22 PM
16. G. Jiggy:

An article about three weeks ago in the Brit papers indicated that somewhere between a third and up to 40% of their National Health Service Physicians have private health insurance for themselves and their families. Kinda tells you something about government monopolies and how the elite in those monopolies make their life choices.

Posted by: WVH on March 9, 2007 01:36 PM
17. Russia is ALREADY working with Boeing guys and has been for years.

Posted by: Army Medic/Vet on March 9, 2007 02:14 PM
18.
Let's see...French Communard workers managed by brie-munching Eurocrats versus Chevy driving American jobbers and engineers managed by US ex-military and biz school grads.

No contest!

Posted by: John Bailo on March 9, 2007 02:52 PM
19. Welcome to Socialism. The only place it can survive is in a government where force can be used to extract more money from its citizens. When Socialist principles are applies to a product, that depends on satisfied customers and real purchases, it shows its true colors.

Smart people can see that the same bad economic principles are at work, no matter where the failure that is collectivism is attempted.

Dumb people (mostly on the left,) will just keep stealing more money from the middle class to keep their failed dreams alive.

Posted by: Jeff B. on March 9, 2007 04:19 PM
20. WVH @ 16:
Very true. I know of what you speak.

Also, in Canada, all health care must go through the government system. You can't jump the queue or pay cash. Doctors are heavily fined for taking cash payment, giving favored treatment or taking somebody out of sequence. People die waiting for MRIs and other "high tech" solutions that we take for granted and get virtually instantaneously.

But guess who can get health care any place they want? Cash, clinic, insurance, short wait, whatever works the best for them. The people that created that system . . . the ruling elite. When they created that mess up there they conveniently excluded themselves from it. Just like DC where congressional parents send their kids to private school but deny vouchers to kids in the worst and among the most expensive school system in the nation.

The tragic part about all this is that a recent poll said that 67% of the American people want national health care.

We're doomed dudes.

Posted by: G Jiggy on March 9, 2007 09:10 PM
21. Possibly the next Prime Minister of England and secular progressive to the core. One of the reasons why socialism is like communism:

Exclusive: Chancellor at £100-an-hour private clinic

Gordon Brown: Uses private dentist

Gordon Brown's fierce opposition to private medicine was called into question last night after it was revealed that he pays £100 an hour to be treated by one of Britain's top private dentists.

The Chancellor had routine treatment last week at the London Centre for Cosmetic Dentistry, which is run by a wealthy dentist who boasts of celebrity patients.

http://www.dailymail.co.uk/pages/live/articles/news/news.html?in_article_id=441472&in_page_id=1770&ct=5

100 pounds = 193.179 USD

He favors socialized medicine.

Posted by: WVH on March 10, 2007 03:39 PM
22. The last chance France had of saving itself was lost when they failed to put Jean Marie La Pen in the leadership spot of the "conservative" party. That party is about as conservative as Ted Kennedy. France will be overrun with Muslims and become an Islamic state within 20 years. There's very little going on to even recognize they have a problem, much less deal with it. Airbus will be an afterthought compared to what's about to happen to France.

Posted by: Scott on March 12, 2007 12:56 PM
23. France will be overrun with Muslims and become an Islamic state within 20 years. There's very little going on to even recognize they have a problem, much less deal with it.

Not just France, but many other countries in Europe as well. As soon as they let Turkey into the EU, Muslims from there will freely migrate to France, Germany, the Netherlands, etc. Those people will drive down wages in many of those countries as well.

If you read some European news services, this is a well covered story. There are accusations of racism and heavy handed politics when it comes to Turkey entering the EU. I don't think this story is covered in the MSM here because of political correctness in regards to Muslims. They don't want the general US public to know that much of Europe is trying to stop the immigration of Muslims into their countries.

Posted by: Palouse on March 12, 2007 01:25 PM
Post a comment
Name:


Email Address:


URL:


Comments:


Remember info?