L'Ombre de l'Olivier

The Shadow of the Olive Tree

being the maunderings of an Englishman on the Côte d'Azur

19 June 2006 Blog Home : June 2006 : Permalink

Keep Airbus Flying

As someone who thinks that state aid to industry is one of the least justifiable forms of government expenditure, my first reaction on reading this IHT article linked to by the EU Referendum blog, was that Airbus should be told to go jump in the lake before I and my fellow European taxpayers get to finance its miscalculations and incompetance. I still think that and I still think that the company would benefit from a certain amount of new blood at the top. Actually I think it could probably do with a number of decimations in upper and middle management (recall that a decimation killed one out of 10 so a dozen decimations merely reduces the ranks by 0.910 or to a total of around 28% of the original) but I think it would benefit more from having top level managers who are used to working in competitive industries that don't receive government handouts. The insider trading and related A380 issues are symptomatic of a management that has lost sight of what its priorities should be and hence drastic changes need to take place at the top.

However having written all that I'm forced to say that I think it would be an extremely bad idea if Airbus goes bust in such a way that it is not longer an aircraft design and manufacturing enterprise. The reason for this is that it has produced excellent prod for Boeing who otherwoise would have a near monopoly on large aircraft. Indeed the fact that Boeing finally got around to developing the 787 is, IMO, a clear indication of the benefits of competition because I really doubt Boeing would have made the investment had it not been threatened by Airbus. Boeing prefered to keep selling varients on its older designs and it was only when the A320 and relatives came along that Boeing realized that it couldn't really do this anymore.

I despise l'Escroc and Vile Pin