University of Gloucestershire

Assignment

The European Business Enviroment

"Airbus′ Power 8 ­ Power for Europe ?"

Written by:

Michael Kumke

Set on:

Academic year 2007 / 2008

12.12.2007

University of Gloucestershire / The Business School

The Park

Cheltenham

Airbus′ Power 8 ­ Power for Europe ?

Agenda

Airbus′ Power 8 ­ Power for Europe ? 1
Airbus ­ the company 1
Cost Reduction Program Power 8 And Its Necessity 5

The EU′s interest in Airbus 7
Power 8′s effect on the EU 9
Recommendation on policies 10

References 12

Image Reference 14

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Airbus′ Power 8 ­ Power for Europe ?

In times of Globalization and Internationalization major national companies become "global"

in terms of structure, purchase or production. Great "geopolitical" supra national bodies like

the European Union ( EU ) play an important role in terms of regulating trade-traffic or

improving the economic standard for its members. The multinational aircraft manufacturer,

Airbus S.A.S, is a good example to emphasize how corporate goals do not always equate with

EU ideals.

The purpose of this report is to identify those disputes relating to the current cost reduction

program of Airbus called "Power 8". By handling the agenda the lead question will be

discussed. Recommondations in the last part mention proposals concerning political issues in

regional and environmental policy. As a whole this report gives an overview concerning the

disputes of a margin orientated company and the EU with the economic interest of all its

members.

Airbus ­ the company

In 2001 Airbus S.A.S. ( Société par Actions Simplifiée ­ joint stock company ) became the

second largest aircraft manufacturer in the world as an integrated company to the EADS (

European Aeronautic Defence and Space Company ). It is a multinational company, with its

headquarters in Toulouse, which coordinates all activities and controls the progress in all

corporate functions ( e.g. purchase, production, destribution etc. ). Its main actions are

focused on four EU members: France, Germany, UK, Spain ( Airbus online, 2007a ):

France includes four manufacturing sites and three assembly lines. As one of the founder

members France has the biggest number of employees ( 19.500 ). The company′s structure

is based on "Centres of Excellence", which means that certain areas are specialised in

particular aircraft components. A new assembly line has been built especially for the A380,

which replaced the Boeing 747 as the biggest passenger plane ( Airbus worldwide, 2007a ).

Germany has an important role in the development and engineering of all aircrafts. Hamburg

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is the Centre of Excellence for cabin and cargo customisation. They are also the site for the

final Marketing and acceptance of A380s customers in Europe and the Middle East.

Concerning the A380 Hamburg produces complete fuselage sections, which are shipped to

France on a special ferry. Another production line in Stade became one of the world′s leading

centres concerning the use of carbon fibre reinforced plastic, which is important to create

advantages against Boeing. With a workforce of 19.250 Germany is the second largest

employer ( Airbus worldwide, 2007b ).

The main contribution of the United Kingdom is the expertise in the design and

manufacturing of wings. The assembling of wings for all Airbus aircrafts takes place in the

UK. However, the wings of the A380 have a single special transport by road and then loaded

onto the ferry to France. The overall workforce in the UK is about 11.500 people ( Airbus

worldwide, 2007c ).

Spain contributes the expertise in weight-saving, composite materials and in innovative

manufacturing technologies. The A 380 profits from new developments in technology and

materials. With a workforce of 300 employees Spain is the smallest employer in terms of the

traditional Airbus EU countries ( Airbus worldwide, 2007d ).

However, non EU members like China, Japan, USA or Russia have become more and more

attractive in terms of working conditions and tax policy. To concentrate on EU issues only the

above presented countries will be looked at closely.

These international collaborations emphasize the multinational thinking of Airbus and

indicate the EU as an important partner in terms of creating attractive general conditions. The

images below give an overview of Airbus and some of the corporate figures, which show

Airbus as one of the biggest aircraft manufacturers in the world.

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