EADS/Airbus says that it is unaffected by financing woes of the banks but this is not entirely accurate…

Victoria
By Victoria October 11, 2011 14:17

EADS/Airbus says that it is unaffected by financing woes of the banks but this is not entirely accurate…

EADS CEO, Louis Gallois, stated yesterday that his company has not been affected by the difficulties French banks are having in securing dollar financing. He stated that foreign banks that have access to the greenback are filling in the gap left by French banks in providing dollar funding. French newspaper Les Echos reported yesterday that Airbus had convinced the governments of France, Germany and the UK to guarantee sales of A320 aircraft assembled at the Tianjin plant in China via their export agencies. So Airbus has shored-up problem areas and does not see a problem with the funding woes of some of the French banks. This is a clever move from Airbus, which has been quite clearly and deliberately kept to the sales side of the business. If however we decide to look at the procurement side of Airbus and start to look at the myriad of suppliers it has and where they are located, then the picture starts to look a whole lot different.

At a time when Airbus is due to ramp-up its production more or less across the board, suppliers have warned that many parts manufacturers are facing liquidity problems from the French banks. Airbus currently produces 38 A320 aircraft a month from European plants and aims to increase this to 42 a month by the end of 2012. However, warnings over the availability of credit for many key suppliers has cast doubt over these plans and could push back deliveries and therefore affect forecast cashflow for EADS/Airbus. Seeing as these same suppliers in many instances supply Boeing, which is also hoping to increase production, there is a bottleneck being created with liquidity badly needed now to increase parts production, but with parts producers finding funding a challenge. Last month Airbus entered talks to buy a majority stake in one of its German suppliers to prop it up after it suffered liquidity problems. It looks like we may well see this happen again.

Victoria
By Victoria October 11, 2011 14:17
Write a comment

No Comments

No Comments Yet!

Let me tell You a sad story ! There are no comments yet, but You can be first one to comment this article.

Write a comment

Only <a href="http://www.aviationnews-online.com/wp-login.php?redirect_to=http%3A%2F%2Fwww.aviationnews-online.com%2Ffinance%2Feadsairbus-says-that-it-is-unaffected-by-financing-woes-of-the-banks-but-this-is-not-entirely-accurate%2F"> registered </a> users can comment.