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Bid To Rescue CSeries Overshadowed By Airbus Turmoil


10/22/2017


Bid To Rescue CSeries Overshadowed By Airbus Turmoil
The spotlight from a growing ethics row last week was taken off and investors were stunned by Airbus’s coup in buying a $6 billion Canadian jetliner project for a dollar. However, questions over how smoothly it can implement the deal have been raised by internal disarray.
 
Just as the Airbus sales machine reels from falling sales and internal and external corruption investigations, pledging to throw its marketing might behind the loss-making jets, the European planemaker secured the deal for Bombardier’s CSeries program.
 
in the face of growing concern over fallout from the investigations and of French reports describing payments to intermediaries, Chief Executive Tom Enders has urged staff to keep calm.
 
But there is a grim mood at the group’s Toulouse offices.
 
“Bombardier asked for an ambulance and Airbus sent a hearse,” said one person with close ties to the company, according to the media
 
Talks to buy the CSeries were camouflaged by the French media attention on the growing scandal. Enders and a colleague were visiting Paris to meet investigators, according to rumors that were circulated in late August. In fact, they were holding the first of several secret dinner meetings with Bombardier.
 
But sales momentum has started to be clouded by the same affair, which first came to light in 2016. In its head-to-head battle with U.S. rival Boeing, Airbus accounted for only 35 percent of global jet sales in the first nine months of the year.
 
With some blaming Enders for turning the company against itself, the Airbus sales operation is demoralized and in disarray, multiple aerospace and airline industry sources were quoted in the media as saying.
 
Rather than risk being drawn into the investigation, some employees have begun to shy away from selling in problematic countries, according to sources.
 
To help steady the operation, soon-to-retire sales chief John Leahy has been asked to stay until the end of the year.
 
The chaos engulfing Airbus means now is not considered the right time for major new announcements even though Leahy designated his deputy Kiran Rao as his successor earlier this year.
 
Reports of instability were dismissed by a spokesman for Airbus.
 
“We have a great sales team ... but it is fully understood that they cannot repeat records every year; and the year is not over,” he said.
 
UK and French investigations have been focusing on a system of sales agents run by a separate Paris department that has since been disbanded as Enders has strongly defended his decision in 2016 to report flawed paperwork to UK authorities.
 
While Enders has pledged to continue the overhaul of sales practices historically shared between Toulouse and Paris, Airbus says no evidence of corruption has been uncovered.
 
Things would settle down by the time the deal for Airbus to sell the CSeries closes next year, predicted a source close to Bombardier while acknowledging disruption at Airbus.
 
(Sourcec:www.reuters.com) 


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