Airbus Update: CEO "quits"?

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The A 380 delay announced by Airbus is generating a spasm of adjustment on the part of suppliers, with engine make Rolls—Royce suspending work on the Trent 900 engine.

The pain will spread downward. Layers of suppliers will reduce their work forces and may experience financial stress as accounts receivable stretch out.

BAE Systems shareholders officially voted to approve the buyout deal,  exercising, in effect a put option. Their money is now safe.

But in Europe, a political firestorm has caused Airbus to pledge talks  before laying off any workers. Not exactly the guarantee the workers want.

From Reuters,

Fears over possible job cuts have triggered a wave of political reaction across Europe. German Chancellor Angela Merkel and French President Jacques Chirac are expected to discuss the company's woes, which will affect its large French and German shareholders, when they meet in Paris next week.

The European Works Council at EADS said it received assurances on the matter from EADS co—Chief Executive Louis Gallois on Thursday.

"Mr. Gallois assured (us) that no definitive decisions had been taken as yet," it said in a statement.

"He assured the European Works Council that the management of EADS would not take any final decisions, including those on individual sites, without previously engaging in a dialogue with the employees' representatives."

Streiff has to pry as much more money as possible from the states, to preserve their Airbus jobs. But if his restructuring of the company is blocked by politics, then market forces will once again be muddled by reasons of state, with predictable consequences.

Thomas Lifson   10 06 06

Update: AP reports Streiff out

If this is true, Christian Streiff must have ruffled too many feathers with his recovery plan for the troubled company. Governments, unions, contractors all started hollering with pain. As expected.

Nobody wants to take responsibility for the downside in which they had a hand. There may be immediate issues of financial reporting or other issues, but Streiff's departure is the worst possible signal for the ability of the company to dig itself out of the hole in which it now lives.

Update: The company denies the story. Games are being played.

The A 380 delay announced by Airbus is generating a spasm of adjustment on the part of suppliers, with engine make Rolls—Royce suspending work on the Trent 900 engine.

The pain will spread downward. Layers of suppliers will reduce their work forces and may experience financial stress as accounts receivable stretch out.

BAE Systems shareholders officially voted to approve the buyout deal,  exercising, in effect a put option. Their money is now safe.

But in Europe, a political firestorm has caused Airbus to pledge talks  before laying off any workers. Not exactly the guarantee the workers want.

From Reuters,

Fears over possible job cuts have triggered a wave of political reaction across Europe. German Chancellor Angela Merkel and French President Jacques Chirac are expected to discuss the company's woes, which will affect its large French and German shareholders, when they meet in Paris next week.

The European Works Council at EADS said it received assurances on the matter from EADS co—Chief Executive Louis Gallois on Thursday.

"Mr. Gallois assured (us) that no definitive decisions had been taken as yet," it said in a statement.

"He assured the European Works Council that the management of EADS would not take any final decisions, including those on individual sites, without previously engaging in a dialogue with the employees' representatives."

Streiff has to pry as much more money as possible from the states, to preserve their Airbus jobs. But if his restructuring of the company is blocked by politics, then market forces will once again be muddled by reasons of state, with predictable consequences.

Thomas Lifson   10 06 06

Update: AP reports Streiff out

If this is true, Christian Streiff must have ruffled too many feathers with his recovery plan for the troubled company. Governments, unions, contractors all started hollering with pain. As expected.

Nobody wants to take responsibility for the downside in which they had a hand. There may be immediate issues of financial reporting or other issues, but Streiff's departure is the worst possible signal for the ability of the company to dig itself out of the hole in which it now lives.

Update: The company denies the story. Games are being played.