December 6, 2006
THEY'RE ONLY EUROS, MAY AS WELL WASTE THEM:
Can Airbus Afford the A350?: Plans are finally on the table for the European planemaker's long-awaited wide-body jet. But where will the money come from? (Carol Matlack, 12/06/06, Business Week)
[T]he Airbus plane is going to cost a bundle to develop—$13.5 billion in R&D, plus $2 billion in capital expenditure, Gallois said. Where will Airbus get that kind of money? After all, the company is bracing for a $6 billion hit to earnings over the next few years because of production snafus on the A380.Posted by Orrin Judd at December 6, 2006 7:13 PMAt the same time, the strength of the euro and the British pound against the dollar has weakened the competitiveness of Airbus' mainly European manufacturing base. Airbus also has to keep its eye on Boeing's likely next move, a new version of its narrow-body 737 line that could force Airbus to respond by updating its own narrow-body planes, the A320 series.
The Europeans will have to be cautious here - providing virtually unlimited subsidies to Airbus will not only vaporize patience in the US, it will cause problems with the WTO and will also anger more than just Boeing and its friends. I think Microsoft, GE, and a few other US firms will have plenty to say to Congress if their business plans are thwarted (or balance sheets impacted) by a European bureaucracy that is saying one thing about competition and then giving billions to what is essentially a protected government enterprise run out of Paris.
And look for continued delays on the A380 - the wiring issues have yet to be fully plumbed.
Posted by: jim hamlen at December 7, 2006 12:08 AMJim,
I'm in total agreement and wonder why none of the papers have done a story that spotlights the EU bureaucrats legislate away our rights (US, China, India, etc.)regarding goods and services used/sold in the Eurozone. There's no accountability from them to us. For instance, just look at the front shape of cars these day. They've changed because the EU legislated minimum front height clearances for cars sold in the EU.
Posted by: KRS at December 7, 2006 1:48 PM