Why has Airbus/EADS reached such a point of economic failure?

Résumé du document

Last semester, in ?Strategic Management' module, our teacher Rob Dekkers would repeatedly draw parallels between Boeing and Airbus. Therefore when we were told that we had to find a subject for a research paper, a study of Airbus came immediately to our mind. Given the recent news about Airbus, EADS, we thought it would be interesting to talk about this failure. Moreover, as French citizens, we were directly concerned about the future of this company. Until the year 2000, Airbus was the leader of the aeronautic industry. IT was subsequently succeeded by Boeing and Embraer. From this time on, Airbus kept losing some market shares especially due to the problems met with during the A380 conception. In addition to this, owing to the cost in Euros and the selling price in a weak dollar, with a decrease of 10 cents in the dollar, Airbus lost 1 billion Euros. This was thus a major economic issue inducing huge losses. The question that we must now address is: why has Airbus/EADS reached such a point of economic failure?

Extraits

[...] Le fait d'avoir chargé la barque d'Airbus n'a pas qu'une fonction en interne. Elle concerne aussi les actionnaires. En effet, Daimler Chrysler doit annoncer la semaine prochaine la vente de du capital d'EADS à des investisseurs, principalement allemands. Pour éviter toute contestation sur le prix de cession, le constructeur automobile ne pouvait se permettre d'être accusé d'avoir camouflé des difficultés. Le Monde Focus, vendredi 19 janvier 2007, p FOCUS Aéronautique et défense Qui pour sauver EADS ? Le conseil d'administration de la maison mère d'Airbus se réunit vendredi 19 janvier dans un contexte de crise de l'action, des ventes, des commandes et du management. [...]

[...] Cela revient en fait à exiger d'EADS de ne surtout pas s'adapter à l'évolution des conditions du marché. Mais cela signifie aussi en clair que la compétitivité est secondaire, qu'on ne fera de mal à personne et que les voix des électeurs iront à celui qui criera le plus fort pour l'exiger. Il ne peut y avoir meilleure démonstration de la divergence entre les objectifs politiques et ceux d'une entreprise privée. La vérité est que, sur le marché mondial, seul celui qui sera en mesure de fabriquer de manière au moins aussi efficace en termes de temps et de coûts des produits aussi compétitifs que ceux de son concurrent connaîtra le succès. [...]

[...] This plan consists in a new organization of the company in strategy, but also in economic. It was interested to observe the situation at the same moment that started the report, because with all the information, the situation was explained very well. This report permits also to understand the situation of a company who can evaluate very fast today. It's like the life of everybody with the misfortune to loose the job. EADS is maybe also one limit in the cooperation between European countries. [...]

[...] As seen above in the introduction, the question is: Why has Airbus/EADS reached such a point of economic failure? Until 2000, Airbus was the leader of the aeronautic industry before Boeing and Embraer. From this time on, Airbus kept losing some market shares especially due to the problems met with the A380 conception. So in this report we will try to explain the reasons of this failure. In a first part, these reasons can be found in the strategy of the company. [...]

[...] In first the company has to be consecrated to guarantee the future of Airbus especially with an adaptation with the weakness of the dollar as the euro. With the the company will try to reduce the cost with an outsourcing more present in the company strategy. (Le Monde Economie) With the outsourcing, we can reduce the cost but also we can reduce the delay to build a plane. That's an element important in the new strategy because we have an important increase of the order in this sector, and the order book are full sometimes for three years. [...]