It was a bad day for the new leaders of EADS, who reported today that the profits at Airbus’ parent company had fallen 9 percent.
The problems were largely due to the delays with the A380 program and smaller-than-anticipated savings from a cost-cutting program, Financial Times reported. http://news.moneycentral.msn.com/provider/providerarticle.asp?feed=FT&Date=20060727&ID=5900245 The falling value of the dollar against the euro isn’t helping.
Key Quote: “The leading European aerospace and defence group also faces a further round of cost cutting to address its loss of competitiveness due to the weakness of the US dollar against the euro and the gradual unwinding during the next five years of $50m of protective currency hedges.”
However, new co-CEOs Tom Enders and Louis Gallois vowed to get EADS back on track, according to the Associated Press. http://www.chron.com/disp/story.mpl/ap/fn/4075482.html
Key Quote: “‘Together we will address the huge challenges ahead, particularly A380, A350 and the U.S. dollar issue,’ Enders and Gallois said in a statement. ‘We will rebuild the markets’ confidence in EADS.’”
Analysts want them to move quickly, Bloomberg News reported. http://www.bloomberg.com/apps/news?pid=20601085&sid=aVrtew.Sl.Y0&refer=europe
Key Quote: “‘Management upheavals, delays in new planes, the A350, and delays in existing planes, the A380, have been the key features of the first half,’ said Marc Watton, a credit analyst at BNP Paribas, in a note to investors. ‘The question is, will the new management team manage to get the immensely complex A380 project back onto track without any further delays.’”