Airbus cancelled negotiations with MT Aerospace / OHB over the sale of Airbus’ German factories.
Airbus said that OHA was not “economically andindustrially sound”. Indeed, OHB, which lacks real expertise in aerostructures, seemed tohave been chosen by default by EADS, assumes Les Echos, which also reveals thatinvestment fund Cerberus accelerated the end of talks when it retired from the sale process.But Airbus also blamed the weakness of the dollar. Talks started when the dollar was worth€1.35. Last Thursday, the US currency traded above 1.75 to the euro. OHB TechnologyChief Executive agreed that currencies had been an issue, and predicted that Airbus may notsell its sites at all. Yet, negotiations with Latecoere and GKN are still going on, confirmedspokesman Rainer Ohler. For Les Echos, the difficult restructuring process of Airbus hasentered a new phase of turbulence. Although Airbus underlined that this incident would notchallenge the rest of the sale process, it clouds the feasibility of the Zephyr plan andincreases risks on the A350 programme, states the paper. To proceed with the sale, ThomasEnders, Airbus CEO, is considering forming an aircraft production company, with the help ofinvestors, and which the plane maker would hold a majority stake. “There is no turning back”in outsourcing, he underlined. Whatever, Airbus will not wait for the end of the sale processto make the required investments in the A350 programme. “We are making the necessaryinvestments to make sure that the entry into service isn’t affected”, confirmed an Airbusspokesman. In addition, costs saving measures resulting from this aborted sale attemptmight be necessary. Airbus CEO Thomas Enders wrote in a letter to his employees thatadditional efforts would have to be made, “efforts that even go beyond our current Power8objectives”. According to rumors, US firm Spirit may be back in the race. It was ThomasEnders’ initial choice until he agreed to talks with OHB to comply with government wishes tokeep the plants in German hands. The US would probably back a talks revival, in the light ofEADS just having been given a large contract with the US government.
Bloomberg, DowjonesNewswire, AFX, AFP (27/03) Les Echos, La Tribune, Le Figaro, Liberation, L’Agefi, Financial Times, TheWall Street journal, Herald Tribune, Frankfurter Allgemeine Zeitung, Handelsblatt, Suddeutsche Zeitung
As expected, EADS signed a €16.6 Bn deal with UK to supply 14refuelling tankers.
The Ministry of Defence told reporters in a news conference that it hadsigned a 27-year Private Finance Initiative (PFI) deal with the Air Tanker consortium, whichalso includes Rolls-Royce Group PLC, Cobham, Thales UK and VT Group. EADS itself is toget a 40% share in the sales of the contract. The consortium will supply modified A330s (thesame airplanes that were chosen by the Pentagon a few weeks ago) to replace old Tristarand VC-10 models of the RAF. Indeed, Louis Gallois commented that “this victory furtherdemonstrates the A330 as the platform of choice for the world’s refuel ling fleets and comeson the back of our recent success in the US market”. For the Financial Times, it is indeed afurther boost for the group’s ambition to become the global (more…)
Market rumors said that Chinese investors may grab a share in EADS,
but the aerospacecompany replied they were “groundless”. A spokesman added that the development of theA350 XWB was going on as planned.
Reuters (27/03)
AMF, the French financial market authority, will hold a meeting next Monday
to debateon the EADS insider trading probe report. This is a real matter of concern for EADS. If theAMF happened to confirm fraud suspicion, it would jeopardize the fragile and subtle Franco-German balance within the aerospace firm. For instance, if Hans-Peter Ring, who overseesall financial issues at EADS, was to be suspected, Germany would feel quite angry againstFrance. Les Echos also believes a negative decision may have consequences on the UStanker deal.
Les Echos
Airbus expressed confidence that airline company Malaysia Airlines would not cancelan
order for 6 A380 jets, despite long delays in delivery. John Leahy, Airbus salesman,did not provide any comments on ongoing talks. But “I’ll be hopeful that we’ll have somethingto announce in the not too distant future”, he said. Malaysia Airlines may place an order forabout 50 A320 and A321 aircraft.
AFX, AFX, Reuters, (27/03)
On the eve of the JEC Composites exhibition, Air & Cosmos reports on the path taken
On the eve of the JEC Composites exhibition, Air & Cosmos reports on the path takenby Boeing and Airbus towards composite materials. According to Roland Thevenin,composite expert at Airbus, the share of structural composite materials will account for 53%of the A350 XWB primary structures. The article emphasizes how Airbus has beenprogressively introducing composites in its airplanes – regarding the A350 XWB, the majorchoices have already been done, it’s just about details now, Airbus says.
Air & Cosmos
In order to reinforce its hedging policy against the dollar, Safran said
it would boostoutsourcing some of its operations. “All of out companies have a site in the dollar zone oremerging countries. They are capable of transferring some business there”, indicated YvesLeclere, in charge of the equipment branch of the French supplier, which regroups Aircelle,Messier-Dowty and Hispano-Suiza. He explained that the surge in activity from plane makerswas at the origin of the outsourcing move – and there is no slowing trend looming. Safran’spolicy will concern the A350 – it will supply all landing and braking control systems – andYves Leclere underlined the point was to retain some suppliers in France.
Le Monde
EADS Astrium officially announced that the ATV Jules Verne refuelling module
getting close to the International Space Station. Nicolas Chamussy, Astrium’s ATVprogram manager, explained that all 28 engines, solar panels and navigation instruments were perfectly functioning. Saturday will be a crucial day for the ATV, which will carry out several tests to a distance of 3.5 km from the ISS.
AFP (27/03)
EADS Astrium would have made the highest offer to acquire from Surrey university
80% in SSTL (Surrey Satellite Technology Limited (SSTL), the world leader in the design, manufacture and operation of high performance small satellites. EADS Astrium was bidding against Thales Alenia Space and OHB-System, which currently is preparing with SSTL the operating phase of Galileo. EADS Astrium is seeking to boost its presence in the UK and to expand its portfolio with micro and mini-satellites.
Air & Cosmos
Airbus cancelled negotiations with MT Aerospace / OHB over the sale of Airbus’ German factories.
Airbus said that OHA was not “economically andindustrially sound”. Indeed, OHB, which lacks real expertise in aerostructures, seemed tohave been chosen by default by EADS, assumes Les Echos, which also reveals thatinvestment fund Cerberus accelerated the end of talks when it retired from the sale process.But Airbus also blamed the weakness of the dollar. Talks started when the dollar was worth€1.35. Last Thursday, the US currency traded above 1.75 to the euro. (more…)
In an interview with the Financial Times, Rudiger Grube, EADS chairman,
seems to rejoice that much less is being written about the company, what the paper calls an“under-stated jubilation” after the battle between France and Germany to reorganizethe management. “It was not possible with this two-headed structure to come to a realsolution about paying a dividend”, Mr. Grube says. He insists that “today, it’s clear we’re inone boat” and that EADS definitely works as a normal company today, “free of the nationalcamps and flags”. Speaking about political issues reportedly interfering in Airbus’ plant saleto US group Spirit, he rather emphasizes that Spirit’s conditions “didn’t fit with our target”. Healso reassures that the sale of factories to Latecoere, GKN and MT Aerospace “is still ontrack” (more…)
According to German news agency DPA, EADS has given up on its plan to implement
a golden share and now considers the option of limiting its shareholders’ voting rights inorder to protect itself against a hostile takeover bid. Under this new scenario, the groupwould limit voting rights for all shareholders controlling 15 % of its capital, explained the newsagency, citing unidentified industry sources. EADS declined to comment, but Daimler, whoowns 15 % of the group’s capital, said no decision had been taken. Confirmation came thisweek-end from Rudiger Grube, who pleaded for “a fresh protection mechanism” to stopforeign takeovers. He mentioned that any decision would have to get approval from Brusselsand be acceptable to financial markets. Anyway, such changes would probably not happenthis year, he added. (more…)
Alexei Fiodorov, the boss of Russian public holding UAC,
stated that his group wouldacquire VEB’s 15% stake in EADS by the second half of the year. The transaction wouldtake the form of a stake swap, as VEB might receive shares of leasing company IliouchineFinance.
AFP (24/03)
The sale of Airbus’s German plants to aerospace supplier OHBhas failed,
reports Financial Times Deutschland on its website. Citing industry sources,the German newspaper’s online edition claims discussions between Airbus and OHB overthe financial and industrial terms of the sale have failed. Airbus CEO Thomas Enders willnow have to make a decision over the fate of the three involved factories within two to threeweeks. An Airbus spokesperson, however, said “negotiations are going on in the threecountries”, namely France, Germany and the UK. OHB and its subsidiary MT Aerospacewere not available for comment last week. The press recalls that Louis Gallois recentlydeclared that the Airbus plant sale programme could be slowed down by the strong euro andthe global financial crisis. According to French paper Le Figaro, (more…)
The tanker contract award to EADS remains under fire in the US,
where lawmakers and trade unions criticise the Pentagon for favouring a European supplierover Boeing. Globalisation has become a “nasty word” since, notes Le Point. But critics seemto forget that Boeing itself relies much on foreign suppliers and is a true example of globalmanufacturing. About 60 % of the components for all its commercial aircraft models aresupplied by foreign subcontractors, and this share climbs to 70 % for the 787 Dreamliner.However, Boeing spokesman Daniel Beck replies there is “no comparison to be madebetween an aircraft destined for the commercial market only and a refuelling tankerexclusively designed for the Army”. The French magazine details that the tanker modeloffered by EADS/Northrop will be assembled in Alabama, (more…)
