Friday, February 16, 2007

Power 8 Looms: Kool Aid For Airbus? UPDATE

There's a fresh article on Reuters this afternoon that talks about Power8 in some detail. The stage is set for a throwdown with union representatives and local officials who don't want their towns to turn into another Flint, Michigan.

One thought that occurs to me is, can Airbus squeeze the kind of savings that it needs out of reorganization and revamping to fund the development of the A350XWB? Because that's where a large chunk of the seed money's supposed to come from. One analyst from Goldman Sachs suggests that Airbus could dump 7 of 16 main facilities including four in Germany and two in France.

The 800 pound gorilla on the coffee table, however, is the dry hole that the A380 has become. It's not selling, it's overweight, it's at least two years behind schedule, and every one that's been 'sold' is a cash hemorrhage as customers line up for deep discounts and rebates on other products as the price for not jumping ship. How long can this go on?

-end update-

There's an interesting take on IAGblog about the upcoming launch of the Airbus restructuring project, euphemistically called "Power8" by the folks whose job it is to coin new ways to package disaster for worker bees.

My pal Addison Schonland opines therein that Louis Gallois, CEO of Airbus is not going to have an easy time of it next week, because there's going to be a lot of hurt passed around that is going to shake some deeply held ideas about the social contract in Europe and what's involved. Chrysler and Ford style bloodletting is unthinkable in Europe, so Addison says.

On the other hand, we here in the states may not like this sort of thing any more than anyone else, but we're resigned to it and are learning to survive it-partially because our labor unions are not terribly influential any more. We also have internalized on an individual level that we're only as good as our last performance, and we realize that there's life after Flint, and Detroit, and Kalamazoo, and Long Beach, and Gary, and Newton, and all the other places where working stiffs once had a say in their futures.

Thomas Lifson, over at American Thinker opines that substantive change of the sort that will be required of Louis Gallois was what cost Christian Streiff his job. He suggests that the problem at Airbus is that it is a state controlled enterprise which chose to bet the ranch on a symbol of the Newer and Much Better Than You Europe-and that symbol is dragging Airbus down the chutes and draining it of the money that's required to invest in newer products for the segments of the market that are growing.

So, because Addison scoops us on a regular basis here at the Dougloid Papers (I don't know, maybe he never sleeps or it's the time difference or something)I figured out I best build a better mousetrap.

That mousetrap, posted early in the day today, suggests that the weight problem with the A380 may still be there.

And that, my friends is news.


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