Posted on 06/15/2006 11:18:16 PM PDT by saganite
Airbus parent EADS has launched an inquiry into the sudden disclosure of A380 delivery delays which hit its stock price and pushed the planemaker into a "major crisis," its co-chairman was quoted on Thursday as saying.
Frenchman Arnaud Lagardere said he would not look for any quick scapegoats, but fired a warning shot over the futures of Airbus chief Gustav Humbert and the co-CEO of EADS, Noel Forgeard, who has apologized to investors over the affair.
"I don't want to over-react and force heads to roll just to please the markets," Lagardere told Le Monde in an interview published a day after EADS stock fell by 26 percent.
"The question I am asking is whether the head of Airbus knew about the internal situation," Lagardere told the newspaper.
"Before punishing anyone, we are going to carry out a deep dive into the group to find out where the production problems are. We have already found some. There is no question of making someone at the bottom of the company pay the price."
The disclosure of further six month delays due to wiring problems identical to ones identified last year shocked the industry after Airbus and EADS insisted the program was on track in recent weeks. Airlines are seeking compensation.
"We are facing a major crisis and I put myself in the position of shareholders and analysts who do not understand this new delay," Lagardere, whose family media group owns 7.5 percent of EADS, told Le Monde.
Recriminations at senior level began even before EADS's "Black Wednesday" on the stock market was over, with Forgeard telling analysts Airbus would have to look at changes in its methods or else face stricter central controls.
Analysts say Forgeard is under just as much pressure over the EUR2 billion (USD$2.53 billion) delays because of his close links with the A380 program which he launched while running Airbus. EADS also faces headaches over the mid-sized A350 plane he launched.
Asked in Le Monde whether Forgeard retained his confidence, Lagardere gave a guarded response. "I am not in the habit of not showing solidarity with my teams, and this is a discussion that I will have with (German co-chairman) Manfred Bischoff."
Forgeard's critics have always suspected him of wanting to run Airbus after leaving the EADS unit last year, so the claims that he knew nothing of the delays have raised some eyebrows.
Forgeard was propelled to the top of EADS, which owns 80 percent of Airbus, following a power struggle last year.
Lagardere backed him over a French protege late in the day, reportedly under pressure from Forgeard's mentor, French President Jacques Chirac whom he once served as an adviser.
In comments leaving no doubts about Lagardere's fury at the timing of the news -- weeks after his media company and Germany's DaimlerChrysler reduced stakes in EADS -- Lagardere accepted that EADS had lost sight of what is happening in its plants.
Lagardere said he had had no idea about the looming delays in Airbus before agreeing with the German car firm to sell a total of EUR4.2 billion (USD$5.3 billion) of stock in April when EADS shares were above 34 euros, compared with barely 20 euros now.
"If we had been dishonest, we wouldn't have sold 7.5 percent of EADS but all of our (15 percent) stake. I have a choice between appearing dishonest or incompetent because I don't know what is happening in the factories. I chose the latter."
Lagardere declined to comment on decisions by some EADS executives including Forgeard to exercise stock options in March, saying it was a matter for them.
EADS shares recovered 7.3 percent on Thursday with at least one broker suggesting they had been oversold in Wednesday's rout. In late trading the shares stood at 20.09 euros.
Poor choice of words now that France is almost an Islamic Republic.
"I have a choice between appearing dishonest or incompetent because I don't know what is happening in the factories. I chose the latter."
You don't get to choose between them. You are either dishonest or incompetent (or both). The facts will make the choice for you.
They also have the other disaster to consider, the A-350. Airlines don't want it and Airbus has to go back to the drawing board with that model. If the A-380 and A-350 fail, Airbus is left with outdated models no one wants and will be 5-10 years behind Boeing. Quite a turnaround from last year when everyone was hailing them as the Boeing slayer.
Well, when you lack strategic vision and invest into a sky cattle car instead of an efficient airplane, you end up 5 years behind.
And the hits just keep on coming...
I'm guessing they will announce the cancellation of the A-350 program.
1. Wider fuselage, probably at least the equivalent of the 777 fuselage.
2. Extensive use of lightweight structures.
3. A380-style cockpit.
4. New 80,000 to 115,000 lb. thrust bleedless engines based on a new Rolls-Royce Trent derivative (800 series features but with 1000 series bleedless operation) and a new General Electric GE90 derivative that uses GENx bleedless technology.
5. Three-bogie main landing gear.
6. New, low-drag high-efficiency wing that allows the A370 to cruise eocnomically as high as Mach 0.88. It will be available in two different wing span widths.
7. The fuselage lengths available will allow Airbus to compete against the 787-9, 777-200 series and 777-300 series.
Any background on bleedless engines? First I've heard of them.
Might be competitive, 'cept you'll get the 787 quicker...
Yea... like 5 years quicker.
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