Sat, Nov 18, 2006
Says It Needs No New Partners
Rumors of an investment
by Persian Gulf interests for a stake in Airbus are false according
to parent company EADS.
Media reports had EADS in advance talks with Dubai International
Capital and Qatar Investment Authority for a direct stake in
Airbus. Those same reports said EADS was courting investors from
China, India, Russia and the US.
An EADS spokesman in Germany told Reuters, "I can deny that. We
are not looking for a partner to invest in Airbus."
EADS directly owns Airbus since the UK's BAE Systems sold its
20% stake back earlier this year.
Despite the denials, French newspaper Le Monde says EADS IS
considering those investors. It says EADS stock is in bad shape
after the A380 fiasco and BAE's decision to pull out of Airbus. All
of that leaves the European conglomerate $10 billion short on
development funds for Airbus' A350 program. EADS has yet to approve
a final design for that jet.
Airbus' woes with the A380 program have wreaked havoc across the
Continent. A two-year program delay has cost the company
billions. Worse, customers are starting to cancel orders for the
superjumbo. That could spell disaster for Airbus which now
estimates it needs in excess of 500 deliveries for the A380 program
to recoup development costs alone. So far, Airbus has less than 150
orders.
The disaster sparked a major company restructuring that's
already cost it one CEO. Christian Streiff stepped down after his
plan met with disapproval at EADS.
As it stands, EADS is playing its restructuring plans close to
the vest. That's understandable considering the political
ramifications that will come from the inevitable plant closings and
layoffs. The company seeks to restructure while causing the least
political damage possible within its core investment countries of
Germany, France and Spain.
Add to all of this renewed pressure from the US through the
WTO to end European government subsidies of Airbus and
it's not surprising speculation regarding EADS' search for
investment money is running rampant.
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