After watching the plummeting dollar eat away at its bottom line over the last few months, Airbus Industrie (Toulouse, France) says it is now considering construction of an assembly facility in the U.S. Although Airbus’ production expenses are paid in euros, its sales are in industry-standard dollars, which means that the aircraft manufacturing giant is taking a financial bath as the value of the dollar slides — $1.45 billion (USD) for every $0.10 (USD) drop in value, according to some estimates. The dollar fell $0.16 against the euro in 2007.
The beneficiary of this strategic shift could be Mobile, Ala. Airbus executives say that if the company wins all or part of a U.S. Air Force tanker contract, which would involve modifying A330 aircraft, a new assembly facility could be built in Mobile. That facility could assemble not only the military tankers but commercial freighter and passenger versions of the A330.
The U.S. Air Force expects to announce the winner of the tanker contract in February or March this year. Officials are choosing between a tanker based on the Boeing 767 and one proposed by an EADS/Northrop Grumman partnership based on the A330. The contract is worth more than $20 billion for the initial tankers and potentially as much as $100 billion, if a decision is made to replace all of the tankers in the Air Force fleet. It is believed that both bids are competitive.
Airbus and parent company EADS, still reeling from the two-year delay of the A380 superjumbo jet, are in the midst of their Power8 production cost-cutting program, which aims to eliminate 10,000 jobs and decrease manufacturing costs by €5 billion ($7.4 billion USD) by 2010. Also a part of the Power8 effort is the sale of seven European manufacturing facilities to one or more Airbus/EADS supplier/partners. Plants on the block are located in Meaulte and Saint Nazaire in France; Filton, U.K.; and Varel, Nordenham and Laupheim in Germany. Also, EADS wants to sell a factory in Augsburg, Germany that primarily does work for Airbus even though it’s a part of EADS’ defense division.
Current suitors for the facilities are Spirit Aerosystems Holdings Inc. (Wichita, Kan.), Latecoere SA (Toulouse, France), OHB Technology AG (Bremen, Germany) and GKN Plc (Isle of Wight, U.K.). In late December, as HPC went to press, several news agencies reported that Spirit has been chosen by Airbus as the buyer of the plants in Varel, Nordenham and Augsburg in Germany and the facility in Filton, U.K.