Production Deal
December 17, 2007
After months of negotiations, Airbus's plans to sell three German factories and one in Britain are on the verge of becoming reality, the Frankfurter Allgemeine Sonntagszeitung newspaper reported on Sunday, Dec. 16.
Airbus boss Thomas Enders could be days away from selling four of the aircraft maker's factories to US company Spirit Aero Systems, the report said.
On Sunday in Hamburg, Airbus spokesman Tore Prang told the paper that although negotiations were well advanced, an agreement had yet to be signed. According to information from German public broadcaster ARD, Spirit made Airbus an offer on Friday, Dec. 14.
Expertise in carbon-fiber technology
Wichita, Kansas based Spirit is known for its expertise in modern carbon-fiber technology, which is expected to play an important role in the construction of future Airbus models.
The expertise, along with a desire to move some production to dollar-based zones, put Spirit ahead of German bidders, reports said.
Avoiding the currency squeeze
The head of Airbus parent company EADS, Louis Gallois, said earlier this month that the aerospace giant had "no choice" but to shift some production by Airbus to dollar-based zones to soften the financial impact of a soaring euro.
Airbus sells its planes in dollars but its costs are in the European single currency. With the dollar steadily depreciating against the euro, Airbus earnings have plummeted.
Three German factories -- in Augsburg, Nordenham and Varung -- are up for sale. A British factory, in Filton, is also part of the deal.
Unions oppose sale
Unions representing Airbus employees are opposed to the Spirit deal, according to news reports. Marina Lensky, from the French union CFDT, told the press last week that workers "did not trust" Spirit management to retain jobs
"The French, English and German unions agree that Spirit should not be chosen" to buy the factories, she told reporters. Other than Spirit, Germany's MT Aerospace is bidding for the Airbus factories. But observers say the concern is too small for such a massive takeover.
Overall, Airbus plans to shed 10,000 jobs and sell a total of six factories as part of its "Power8" restructuring plan, which was prompted by severe problems encountered with its A380 superjumbo jet program.
Spirit AeroSysteems has a very close working relationship with Airbus rival Boeing, reports said. But it is also an Airbus supplier.