Translated material
An auditor is coming to Airbus
German authorities may buy out DaimlerChrysler's stake in the European aerospace concern EADS
The deep crisis in which the European aerospace concern EADS found itself due to its subsidiary aircraft manufacturing company Airbus SAS, caused quite harsh statements from the management of the corporation, as well as discontent among airlines in connection with the postponement of serial production of the giant Airbus A380 by two years. EADS told Bloomberg yesterday that the aircraft company's work would be subject to a "robust investigation." Since Airbus delayed the A380, it has left a hole in its budget, with EADS forecasting a loss of €4.8 billion by 2010. The concern intends to compensate for at least 2 billion euros with reforms that should reduce budget expenditures. However, French Prime Minister Dominique de Villepin supported EADS and Airbus at a press conference yesterday: “There is no need to remind you that I fully trust the management of Airbus, as well as the management of EADS.” At the same time, German authorities are now studying the issue of purchasing a 22.5% stake in EADS from DaimlerChrysler, which has long wanted to get rid of this stake. And although the intention to further nationalize the European concern is being sharply criticized, the timing for it is very good: yesterday EADS shares experienced a collapse, down to 12% from the previous day’s closing level. In general, during the year their rate decreased by 29%.EADS is controlled by German and French shareholders (the concern's charter stipulates that the board of directors is not formed by all shareholders, but only by German and French ones). 22.32% of the shares belong to DaimlerChrysler, 15% each belong to the French government and Lagardere (of its stake, 7.5% of EADS shares are now in the process of being sold to increase the free circulation of these securities, earlier this year for the same purpose DaimlerChrysler has already sold a 7.5% stake in EADS). Another 5.44% of the shares belongs to EADS’s “junior strategic partner” - the Spanish state-owned company SEPI, and 42.49% is traded on the stock market. Russian Vneshtorgbank recently announced that it had managed to consolidate a 5.02% stake in EADS, while Russian presidential aide Sergei Prikhodko claimed that the bank was ready to bring its stake to a blocking stake. However, Vladimir Putin, during a recent visit to France after a trilateral meeting with Jacques Chirac and Angela Merkel, told reporters that VTB exclusively plays in the stock market and there is no talk of any expansion into the European aircraft manufacturing industry.
The A380 is the largest passenger aircraft in the world, which Airbus plans to produce in Hamburg. It is capable of carrying 550 passengers. Four such airliners have already conducted 575 test flights with a total duration of 1.8 thousand hours. A month ago, the A380 took off for the first time with passengers - Airbus employees, who made a seven-hour flight over Toulouse. The start of serial production of these machines was scheduled for 2007, but in the summer it became known about a delay, first by a year, then by ten months, and finally, the other day it was announced that the deadline would be postponed by two years.
International airlines, which had previously placed their orders for the new European airliner, eventually began to talk not only about the possibility of reorienting to the aircraft products of a competitor - the American corporation Boeing, whose 787-series Dreamliner has somewhat similar characteristics, but also about penalties. Among the biggest victims of Airbus' decision are Singapore Airlines, Emirates Airlines, Malaysian Airlines and Australia's Quantas. Only the Australians named the specific amount of their losses in this regard - Quantas reported damages in the amount of $77 million.
The payment of penalties could be disastrous for the Hamburg airline. In this regard, according to unofficial information that has appeared, the Airbus shareholder plans to fully or partially transfer the technological process of final assembly of the A380 from Hamburg to Toulouse, France. Such a prospect will inevitably hit the authority of the current German government coalition led by Chancellor Angela Merkel. At the end of last week, she discussed the problems of the German part of Airbus with Economics Minister Michael Glos and Finance Minister Peer Steinbrück. It was a preemptive response by the federal government in the event that jobs in Hamburg were at risk. The basis for fears of this kind among senior German politicians is fueled, in particular, by Airbus’s intentions to partially transfer orders for the production of individual components and assemblies of the A380 to Russia, India or China, which would also be in line with the EADS concept of savings in the coming years.
Therefore, the German federal government, as reported by German media, is exploring the possibility of following the example of France and becoming a shareholder in EADS. State Secretary of the German Ministry of Finance Thomas Mirow is conducting preliminary negotiations on the purchase by the state bank Kreditanstalt fuer Wiederaufbau of part of the stake owned by DaimlerChrysler. By the way, Mr. Mirow, being a senator for the economy of Hamburg, ensured that the production of the A380 is located in his suburb - Finkenwerder. 750 million euros were invested from the state budget for these purposes.
However, representatives of the German Ministry of Finance and the Ministry of Economy are in no hurry to clearly confirm the interest of the German state in equity participation in EADS. This idea is criticized by experts who, on the contrary, believe that “in its current situation, EADS needs just less government influence.”
By the way, next week Vladimir Putin will be visiting Munich, where the German headquarters of EADS is located. The planned conversation with Bavarian Prime Minister Edmund Stoiber will inevitably touch on the prospects for Russian participation in the European aviation industry.