Re: FT: Aerospatiale on Airbus

From: (Roger Chung-Wee)
Organization: Concord World Travel
Date:         12 Apr 96 02:11:26 
References:   1
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On 30 Mar 96 16:01:04 , (Alain Deckers) wrote:

>Anyway, if all the major Airbus partners (France, Germany and the
>United Kingdom) no longer seem worried about these issues, they must
>obviously be satisfied that the advantages of incorporation outweigh
>the benefits.
>That still leaves the most important question of all: why incorporate
>at all? In my opinion, an important contributory factor in this has
>been the long held belief of the German and UK governments that they
>needed to impose some discipline on AI (read "on the French") to force
>it into a realistic attitute towards its costs, and the two
>governments' desire to limit their financial exposure to the
>consortium. The current French government was bound to be more
>receptive towards these arguments than its predecessors, and it was
>perhaps a case of seizing the opportunity (remember, the French have
>also recently announced a major rationalisation of their defence
>industry -- civil aviation falls under the purview of the Direction
>Generale de l'Armement (DGA) and the French have traditionally
>considered civil aviation an adjunct to the defence industry).

One of the consequences of operating under the GIE structure is that
any benefits accrue to the members (read BAe) - not the consortium.
Thus Airbus cannot compete cost-wise with Boeing.

Becoming a limited company will sort this out as well as giving Airbus
access to the capital markets.  I think that it's fair to say that
what's suitable for French winegrowers is looking increasingly
indefensible in a business as complex and as costly as aviation
manufacturing and selling.

I'm not sure that the German and UK governments are so involved.  The
big push towards restructuring Airbus has come from BAe which is doing
rather nicely out of making wings, but does not want to be dragged
under by its inefficient partners.

Roger Chung-Wee <>
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