Friday, June 16, 2006

EADS and Airbus being probed after A380 crisis.

Bidness: The fact something this major was kept quiet until this week is amazing.

Noël Forgeard, long-time "Monsieur Airbus" and now co-chief of Europe's aerospace giant EADS, was clinging to his job last night after signs that he had lost the confidence of the board over mounting troubles in the A380 super-jumbo programme. The leadership crisis came as it emerged that Mr Forgeard and three other top EADS executives had cashed in shares worth millions of euros in March, just weeks before the discovery of grave defects in the A380 wiring system. EADS stunned the markets this week with an admission that the $300m (£160m) double-decker A380 was far behind schedule, entailing at least €2bn ($1.4bn) in penalty clauses and extra costs. The stock lost a quarter of its value on Wednesday, though it rebounded 6pc yesterday to €20. Arnaud Lagardère, the French co-president of the board, warned yesterday of a "major crisis" at the world's top producer of passenger aircraft, announcing a probe to learn how the company had been allowed to go so far off the rails. "It's not just the delay that investors are punishing, it's their lack of confidence in Airbus's ability to properly manage very complex projects," he told Le Monde newspaper. "Before punishing whoever it may be, we're going to dig deep into the group to find out where the production problems are coming from. We will act on both the industrial and human level," he said.
I never got the appeal of the A380 because my P.O.V is that passengers are more concerned with point to point travel rather than going to a hub to catch another plane. What it looks like here is Airbus is now where Boeing was a couple of years ago being cocky and getting caught.

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