Airbus Warns 135,000 Employees its Survival is at Stake

Mish

Due to a the Covid-19 outbreak, Airbus is bleeding cash at  unprecedented speed.

Reuters reports Airbus Warns Staff on Jobs with a stark message.

European planemaker Airbus gave its starkest assessment yet of damage from the coronavirus crisis, telling the company’s 135,000 employees to brace for potentially deeper job cuts and warning its survival is at stake without immediate action.

In a letter to staff late last week, Chief Executive Guillaume Faury said Airbus was “bleeding cash at an unprecedented speed” and that a recent drop of a third or more in production rates did not reflect the worst-case scenario and would be kept under review.

“The survival of Airbus is in question if we don’t act now,” he added.

“Unfortunately, the aviation industry will emerge into this new world very much weaker and more vulnerable than we went into it,” Faury wrote.

Survival at Stake? 

I doubt that.

The same with Carnival, now deemed as "Too Big to Fail" by the Fed which arranged emergency loans.

Carnival could easily file for bankruptcy reorganization and reschedule debt payments. 

One of my friends commented yesterday "This is just a play to save the equity, who are Trump’s friends."

OK but why would the Fed do this? 

"Because he has appointed a ball-less group of wimps. It largely does what he wants. Particularly on a petty issue like this," replied my friend.

Stay tuned for more shenanigans by the Fed, ECB, BOJ, BOC and all their respective governments.

Meanwhile, I repeat my comment from yesterday, "What's deemed too big to fail keeps getting smaller and smaller." 

Mish

Comments (12)
No. 1-7
sangell
sangell

Let it fail ( but Europe won't). It was never a real company and depended entirely on state subsidy and captive markets. If Europe wanted a civil airliner company they could have bought the civil aviation arms of Lockheed and McDonnel Douglas. Boeing did!

Jdog1
Jdog1

Airline travel is not going to return to pre virus levels for years. Many airlines will go bankrupt and that will result in a glut of airplanes worldwide. Surviving airlines will be able to pick those surplus planes up cheap, and thus their need to order new planes will fall dramatically. They will need to refocus on military contracts to offset the loss of demand in passenger markets.

sangell
sangell

Boeing bids on and receives Defense contracts but doesn't receive government funding to develop new civil airliners. One could make a case the 707 was derived from the KC-135 tanker in size and shape but, normally, aircraft makers worked with airlines to develop a new civil aircraft. That is how the 747 came to be. Pan Am wanted a long range widebody jet and Boeing submitted the 747 design,

Tony Bennett
Tony Bennett

"What's deemed too big to fail keeps getting smaller and smaller."

...

Where / When a line be drawn?

Until then equities will party on.

Maximus_Minimus
Maximus_Minimus

When will the movie industry be saved? After all, you cannot watch a re-run of the last season "production" which was a remake of the five year old series with different costumes.

davebarnes2
davebarnes2

"warning its survival is at stake"
What a load of crap.
The EU+UK is not going to let this happen.


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