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.
Table of Contents
1. Airbus’ Power 8 – Power for Europe ?
2. Airbus – the company
3. Cost Reduction Program Power 8 And Its Necessity
4. The EU’s interest in Airbus
5. Power 8’s effect on the EU
6. Recommendation on policies
Objectives and Topics
The report aims to analyze the challenges faced by the aircraft manufacturer Airbus, specifically regarding the "Power 8" cost reduction program, and to investigate the complex relationship and conflicting interests between the multinational corporation and the European Union.
- Corporate structure and operations of Airbus S.A.S.
- Technical and organizational challenges in the A380 production.
- Detailed components of the "Power 8" restructuring program.
- The role of EU subsidies and political influence on corporate strategy.
- Recommendations for future regional and environmental policies.
Excerpt from the Book
Cost Reduction Program Power 8 And Its Necessity
R&D and the final production of the A380 project has cost Airbus $ 10.7 billion. It is the largest aircraft in terms of passenger capacity. However, the brain child of Airbus is at the same time the reason for the current crisis and unrest in the company itself. The double production line of the A380 in Toulouse and Hamburg has generated 50 powerpoint presentation emails a week to ensure and comment on their efforts and efficiency in reporting and a performing coordination between international divisions. Thus to guarentee an “up-to date” status for the responsible superiors, their email inbox was overrun with emails ( Euros du village, 2007 ). To reduce the amount of reporting another team was engaged to compress the given data in the reports into a more manageable format. The result, however, was unproductive mass information and therefore of uncertain status about the project’s development.
Besides, there have been technical difficulties e.g. the use of different design software in Toulouse and Hamburg has lead to significant mistakes in construction of the eletronic cable courses ( Manager Magazin, 2006 ). The result has been a 1 ½ years delay in delivery for all customer orders ( Der Spiegel, 2007a ). In addition to this massive financial burden and penalties for non-performance, clients like FedEx have cancelled their orders ( ten A380’s ) and skipped to Being ( Euros du village, 2007 ).
Summary of Chapters
Airbus’ Power 8 – Power for Europe ?: This introductory section outlines the globalization context and states the report's purpose regarding the conflict between Airbus' corporate cost-cutting measures and EU interests.
Airbus – the company: This chapter details the corporate structure of Airbus, its focus on key European member states, and its position as a major global aircraft manufacturer.
Cost Reduction Program Power 8 And Its Necessity: This chapter explains the financial and technical crises leading to the development of the "Power 8" program, including production delays and the impact of the weak Dollar.
The EU’s interest in Airbus: This chapter explores the political and economic interdependence between Airbus and the European Union, highlighting the role of state subsidies and employment welfare.
Power 8’s effect on the EU: This chapter analyzes the direct consequences of the "Power 8" program on the European workforce, specifically the planned job cuts and site restructuring.
Recommendation on policies: This final section provides policy suggestions for the EU, focusing on R&D investment and tax strategies to support sustainable and competitive industrial growth.
Keywords
Airbus, Power 8, EADS, A380, European Union, Cost Reduction, Globalization, Aerospace Industry, Research and Development, Production Efficiency, Corporate Restructuring, Trade Law, Subsidies, Industrial Policy, Stakeholders.
Frequently Asked Questions
What is the primary focus of this report?
The report examines the "Power 8" cost reduction program initiated by Airbus and how these measures interact with European political and economic interests.
What are the central themes of the work?
The core themes include industrial restructuring, the challenges of multinational production, the impact of government subsidies, and the tension between corporate efficiency and political regional policy.
What is the main objective of the analysis?
The objective is to identify the disputes arising from the "Power 8" program and to discuss whether these measures reconcile corporate profitability with the economic interests of EU member states.
Which scientific approach is utilized?
The study utilizes a descriptive and qualitative analytical approach, evaluating corporate data, industry reports, and political frameworks to assess the impact of Airbus' strategic changes.
What topics are discussed in the main body?
The main body covers the company's background, the specific components of the "Power 8" program, the role of international R&D, the influence of political entities on corporate decisions, and policy recommendations.
Which keywords define this work?
The work is characterized by terms such as Airbus, Power 8, European Union, industrial policy, restructuring, subsidies, and global competition.
What triggered the need for the "Power 8" program?
The program was triggered by significant cost overruns, technical design issues with the A380, production delays, and the financial impact of the strong Euro against the Dollar.
How does the EU influence Airbus' strategy?
The EU influences the company through massive R&D subsidies, industrial cooperation agreements, and by safeguarding employment, which makes the company an "industrial anomaly" linked to national and European defense interests.
What is the expected outcome of "Power 8" by 2010?
The primary aim of the program is to save Airbus €5 billion by 2010 to address cash flow deficits and secure funding for future aircraft projects like the A350.
How does Airbus plan to increase productivity?
Airbus aims to improve engineering productivity by 15% and reduce the total aircraft development cycle from 8 years to 6 years through improved manufacturing and leaner processes.
- Quote paper
- Michael Kumke (Author), 2007, Airbus Power 8 - Cost reduction program, Munich, GRIN Verlag, https://www.grin.com/document/135340
