THINK OF FRANCE AS THE PEQUOD:

Brinksmanship at Airbus (Thomas Lifson, 2/26/07, Real Clear Politics)

With only 10 aircraft on order, the additional cost of producing a freighter version of the A380 may be greater than any possible financial benefit to Airbus for completing the engineering, tooling, and other costs involved in modifying the passenger version for freight use. Airbus desperately needs both engineering talent and money to work on the twin jet A350XWB next-generation composite technology airliner, to compete with Boeing in the largest market segment for jumbo jets. If it decides to concentrate its resources where the payoff is greater, that might be a rational business decision.

Moreover, if the UPS delivery slots are vacated, it frees them up to be used by passenger airline customers, whose own orders would be less delayed as a result. This could lessen the penalty payments Airbus must make to these airlines, adding to financial benefits of a cancellation.

The freighter version of the A380 faces a difficult market ahead anyway. Because of its double deck configuration, it is best suited to comparatively lightweight package service of the sort UPS and Fedex specialize in. It cannot carry high density heavy cargo as well as the various 747 freighter models (including the forthcoming 747-8F stretch version). Boeing has already sold more than 50 copies of the 747-8F before it even takes to the air.

However, if Airbus finally admits defeat and cancels the A380 freighter, this might set a precedent for cancelling the entire A380 project, something that has so far been regarded as absolutely unthinkable in political terms. However, a freighter cancellation might also throw a scare into Airbus workers and labor unions, targets of another sort of brinksmanship.

Brinksmanship with the Unions

Perhaps the most dramatic news to leak out of Airbus over the weekend following the Franco-German summit was notice that Airbus might ask its workers to put in a 40 hour week, instead of the 35 hours per week they have been working. For no extra pay. Via Reuters:

Airbus is considering extending its workweek to 40 hours from 35 hours without compensation as part of the European planemaker's restructuring plans, German magazine Focus reported.

The reported proposal is likely to ring alarm bells in France, where a 35-hour work week was introduced by a Socialist government in 2000 and remains a potentially divisive issue ahead of April-June presidential and legislative elections.

"Management apparently is talking to unions about longer hours: 40 instead of 35 per week are envisaged," Focus reported in its Monday edition.

EADS unit Airbus declined comment and union representatives could not be reached.

French and German labor laws probably would have to be changed to permit a 40 hour week, but indications are that this could well happen.

Socialist presidential candidate Segolene Royal has promised to review the 35-hour work week with the aim of "reducing negative consequences for workers and employees."

Conservative candidate Nicolas Sarkozy says the 35-hour week should be retained but viewed as a minimum, not a maximum, with people free to work more or longer if they want.

Retreating on the 35 hour work week would itself be a humiliating retreat for France and Germany, which have taken pride in their more civilized approach than the savage Americans. No doubt, vicious American competition would be blamed, but one wonders if other sectors of the French and German labor force would welcome such an increase in work at no additional compensation, just because their political leaders backed a grandiose airliner. Once Airbus is allowed to inhumanely exploit its laborers in this way, what greedy capitalist could fail to demand the same from his own laborers?

MORE:
http://www.spiegel.de/international/spiegel/0,1518,468624,00.html>Germany's Airbus Disadvantage (Dinah Deckstein, Konstantin von Hammerstein, Wolfgang Reuter and Janko Tietz, 2/26/07, Der Spiegel)