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EADS GIVES POSITIVE UPDATE

18 Jul 06. Tom Enders Louis Gallois co-chief CEO’s of EADS gave an upbeat but guarded statement with regard to the future at EADS following the Airbus debacle reported earlier this month

Enders said, ”You know what the priorities are, Airbus, Airbus, Airbus.”

However since the Press Conference details of the ‘New’ A350 have been clarified by BATTLESPACE sources. Unconfirmed sources suggest that existing customers for the A350 may have Airbus over a barrel and that they have held the company to the original price quoted for the A350 prior to any changes required by ILFC and others. This would leave EADS’s balance sheet looking wanting if the company has to finance the difference, believed to be substantial, between the A350 XWB and the original A350. It is likely that A350 customers may have threatened to withdraw any A350 funding plus compound interest if these demands were not met; time will tell.

The dilemma facing the Board was reflected in the remark made by Enders that, “The A350 is a new plane; we have never had such a problem after the launch of a new plane. We have discussed the new timeframe for the launch of the A350 XWB at a Board Meeting.”

Neither party would comment on a question asked that Noel Fogeard knew about A380 problems prior to the announcement last month as was stated at a May 16th that Airbus would only deliver 17-20 A380 as opposed to the 25 stated by Fogeard.

When questioned over the likelihood of any U.K. job losses in the wing production plant in particular, Enders would not be drawn saying that there were no guarantees of jobs in Germany or the U.K. However Gallois capped this by saying that it was unlikely that the wing production would move from Chester.

Neither of them would confirm who would make the wings for the A350 XWB, a hint that perhaps both the U.K. and Spain could be drawn into a bidding match? Spain ahs always coveted the wing production and has the composite capability in-country. Enders added that jobs would have to be based on competition and innovation.

When further questioned about aspirations in the U.K. and the possibility of a Board Member from the U.K., Enders said that EADS had a clear footprint in the U.K. and that the company had a firm commitment to establish a global R&D centre in the U.K. Enders said the board member would be appointed by EADS.

“We have every reason to contemplate having British people on the board, but we have to get out of this nationality trap. We have to have someone who can contribute value, not just someone who can protect British jobs.” Gallois said.

Gallois said that the company was mulling the possibility of listing the company on the London Stock Exchange. He also confirmed the company’s target of having €10bn of defence-related sales in 2007. When questioned about the possibility and wish for EADS to own 100% of MBDA, he said that this had not been ruled out but that it depends on the desires of both BAE and Finmeccanica as to whether they would wish to dispose of their shares; the same was true of ATR. BATTLESPACE sees it as very likely that EADS will own 100% of MBDA by the end of the year, which may become part of an overall BAE escape package.

Earlier, UK Trade and Industry secretary Alistair Darling said the government and EADS agreed in principle to have a U.K. subject on the EADS board if BAE Systems sells its stake in EADS unit Airbus.

EADS has fewer than 17,000 staff in the UK, of whom about 12,000 work for Airbus at sites in Bristol and Chester.

“It would be absurd for EADS and Airbus not to take advantage of the facilities at Chester and I don’t know where else we would be able to build the wings other than in Chester,” Gallois said.

They said that EADS remained hopeful a negotiated agreement could be reached by the E.U. and the U.S. on the issue of government support to rival aircraft manufacturers Boeing. The latter has often come under fire from the U.S. for

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