BAe selling stake in AIRBUS (Merged)

Its ironic that the news came on the same day when SIA told Airbus to redesign the A350.

How’s that ironic? :rolleyes:

😀 😀 😀

I have heard one interesting thing about this at work, but its nowhere near as panicked or actually set in stone as an actual re-design. I love the way journalist step all over the facts (and common sense) to make their point.

In my opinion, this is a fairly arbitrary point all-round because, all BAe really do is stump up the cash to launch a product, and reap the reward, if its not them then it’ll be somebody else.

BAe has obviously been thinking about this for a while, and fair enough, as long as the government keeps the faith then I’m happy. I noticed in an overview I read last week that, for every pound the british government lends Airbus, Airbus pays back THREE. Now thats interest……

coanda

There’s nothing stopping BAe becoming a contractor/partner to Boeing.

If BAe feel they can survive and grow stronger with concentrating on military hardware, for which they have great expertise, then I say “All the best to them and good luck” 🙂

There is no way the British government would allow a Boeing-US tie up, for that matter neither would the US govermnet. In the EU foreign ownership laws restrict non-EU members from owning more than 49% of a company and holding more than 49% of the voting rights on the board – the US is even more strict on this with just 25% – however to complicate matters the British goverment imposed a clause, when Bae was privatised, that the company may never have more than 25% of shares or voting rights in the hands of a non-British company or individual?

Whats with deleting my previous post?

I think I may have just come across the answer to BAe’s pull out:

Click here

HUGE bills to tackle problems on some of Airbus’s new projects persuaded BAE Systems to sell its 20% stake in the plane maker, industry experts believe.

Senior BAE executives have calculated that Airbus will have to find more than £5bn for research and development to solve design problems on the A350 twin-engined wide-bodied jet and extra spending on the new military A400 transporter.

Significantly, BAE’s decision last week to pull out came on the day that Singapore Airlines, the world’s second-biggest carrier, called for a total redesign of the A350 if it was to compete with its Boeing 787 rival.

Are the current ….”unpleasentries” in France affecting Airbus?

Yes, on Thursday the factory was blocked for two hours by students. But that’s it. No other effects.

To the topic:
I don’t think it is wise to sell the share although I clearly see the point. BAe has a clear strategic focus. Airbus is more a German-French thing and they are actually giving the direction. Little space for BAe to make strategic decisions. So they can bail out now and get got money for it.

I don’t see Airbus doomed. Just to put it into perspective: In 2002 Airbus had achieved 100 A380 orders, Boeing was struggling with the funny Sonic Cruiser. Everybody was talking about Boeing disappearing from the market, which was at that time BS. Same applies today other way round: Don’t speculate too much, it gets emberrassing in a few years.

I am very worried about Boeing taking over BAe Systems. No sane government could allow that. Bad enough that my government does not have too much idea of defending strategic defense industry against foreign investors (HDW Docks in Kiel building U-Boat 212), but having the world market leader taking over the second biggest European aviation company doesn’t look good.

Britain wrecked its car industry completely (BMW was glad to help) and has castrated its aviation industry from the leading European nation in the 1950s to a single company in 2000, which now reduced its share in civil aviation to that of a subcontractor instead of a decision taker. Let’s hope they get sober over there again.

Politics belong in General Discussion, chaps………

GA

It looks like that Airbus is going to be like the EU, it must have been an Union but actually its France and Deutschland ruling leaving some bread crumbs to Spain.
That is why Italy and UK are merging most of their activities and making also a lot of affair in the US. Nobody want to be ruled by a French-German group.

Are the current ….”unpleasentries” in France affecting Airbus?

im just thinking aloud here…but BAE wants to get more exposure to the US arms market, one of the big players is Boeing…BAE has a worldclass team when it comes to designing highly efficient wings…Defence contracts lead to civilian contracts and so on

Possible tie up between Boeing and BAE?

Both of the above I feel on hearing this news. If the board at BAe reflect this country’s attitude towards civil aviation manufacture, heaven help us. I’m all for business sense, but it should be balanced with maintaining our place as a major owner of a large civil aircraft project.

😡 😡 😡 😡 😡

And if the only way to maintain a share in civil aviation is to expose a company to higher than reasonable risks…. is that proper business sense?

The board at BAe have their reasons, whatever they may be. We can only hope it is in the interest of the company, national pride be damned if it keeps our people in work? Right?

Saddened and Angry

Both of the above I feel on hearing this news. If the board at BAe reflect this country’s attitude towards civil aviation manufacture, heaven help us. I’m all for business sense, but it should be balanced with maintaining our place as a major owner of a large civil aircraft project.

😡 😡 😡 😡 😡

A Moderation Moment

Ahem. Just a gentle reminder from your Friendly Neighbourhood Moderator that we don’t do A vs B willy-waving in here any more.

Just in case anyone has forgotten…… 😉

Cheers

GA

Taken from: Thisismoney.co.uk

HUGE bills to tackle problems on some of Airbus’s new projects persuaded BAE Systems to sell its 20% stake in the plane maker, industry experts believe
Senior BAE executives have calculated that Airbus will have to find more than £5bn for research and development to solve design problems on the A350 twin-engined wide-bodied jet and extra spending on the new military A400 transporter.

Significantly, BAE’s decision last week to pull out came on the day that Singapore Airlines, the world’s second-biggest carrier, called for a total redesign of the A350 if it was to compete with its Boeing 787 rival.

Spending on these projects would have affected Airbus’s financial performance-in a few years, so faced with a £1bn-plus liability and smaller dividends, BAE calculated that now was the best time to get out.

The value of its stake is being assessed by four banks. An agreement with EADS, the Franco-German company that owns the remaining 80% of Airbus and has first refusal on BAE’s stake, is unlikely to be finalised for weeks.

But its already clear that EADS will have to pay at least £4bn to take complete control of Airbus.

The British government, which has lent Airbus £1.2bn over the past 20 years, is confident that the future of Airbus UK, with 13,000 employees in Broughton, North Wales, is safe.

Its investment in Airbus is guaranteed by commitments made by EADS that it will not relocate to other countries.

But even though the plant has a reputation as the world’s most skilled wing manufacturer, there are fears that Germany may take some business. Last November, Airbus’s plant near Hamburg was given a contract to build part of the A350 wings and the Germans seem confident that they can win more.

While BAE has earmarked most of its Airbus stake to expand in America, which now produces 40% of its profits, it still plans to spread its influence in UK naval shipbuilding-It is still considering whether to make a joint bid with VT Group for Babcock International and it is looking at acquiring other shipbuilders.

It is also believed to be looking at buying Plymouth’s Devonport dockyard, which has been put up for sale by owner KBR, a subsidiary of America’s Halliburton. The yard is valued at about £250m.

Big article in the todays Financial mail. Investors speculate that the redesign of the A350 and the continueing of the A440M military transport, plus cost over-runs on the A380 could amount to £5billion in investment over the next 5 years which will be called upon by EADS.

Also interesting the HM Government has invested £1.2billion over the last 20 years into Airbus, and has secured assurances from EADS that jobs will remain in the UK.

With the amount of investment/Tax payers money each UK Goverment has given companies….I’m still waiting for my Nissan Micra and Airbus A318CJ

Its ironic that the news came on the same day when SIA told Airbus to redesign the A350.

In addition to BAe Systems offloading their 20%, Daimler Chrysler and Lagadare each want to offload 7.5% of EADs stock (Source Daily Telegraph)

Rather think bmused has left off the A330 and A320 – the products that are currently selling quite well which should mitigate any large requirement for extra funding for a revamp of the A350 (not that there is any need for it). Indeed, I rather imagine that the A350 is the “stop gap” for the next dozen years, with Airbus no doubt having some cunning plan for a 767/777/A330/A340 replacement, incorporating any significant engineering gains accrued from the early years of operation of the 787.

Back to the point of the thread: The wings will continue to be built in the UK – the name of the employer will be changed from BAe to EADS. It would probably cost too much for EADS to shift wing production (and all other associated costs) to an existing location.

Not at all.

Those programs are running well. But the A330 has a limited lifespan now due to the A350 and 787. The A320 will not sell forever and is not a high margin line in the first place. Widebodies are what create the big bucks and Airbus just got a hell of a shellacking on that market.

The A320 is a great plane, selling well, but the margines are tight and will not sustain Airbus and al its R&D forever.

But we digress…..

Rather think bmused has left off the A330 and A320 – the products that are currently selling quite well which should mitigate any large requirement for extra funding for a revamp of the A350 (not that there is any need for it). Indeed, I rather imagine that the A350 is the “stop gap” for the next dozen years, with Airbus no doubt having some cunning plan for a 767/777/A330/A340 replacement, incorporating any significant engineering gains accrued from the early years of operation of the 787.

Back to the point of the thread: The wings will continue to be built in the UK – the name of the employer will be changed from BAe to EADS. It would probably cost too much for EADS to shift wing production (and all other associated costs) to an existing location.