[KevO]

$this->bbcode_second_pass_quote('', 'T')he weak dollar is threatening the survival of European planemaker Airbus, chief executive Tom Enders told workers in Hamburg on Thursday. And the firm once again warned that its cost saving plan would have to cut deeper to counter the impact of the weakening US currency.
Airbus is owned by European aerospace and defence group EADS. "The dollar's rapid decline is life-threatening for Airbus," Mr Enders said in the speech to employees.
"The dollar exchange rate has gone beyond the pain barrier," Mr Enders added. And he said that Airbus's entire business model needed reviewing as "reasonable processes of adjustment" were hardly possible now, he said.

[Concerned]

Maybe China can buy Airbus, strip down the factories and start making them in China. Alternatively European workers could take Chinese style wages and no benefits in "reforms" to make them more competitive.

Capitalism the usual race to the bottom. Google Ricardos Iron Law of Wages, Ricardo was more famous for his comparative advantage analysis wine from Spain and or Portugal for wool from England.

[Harlequin]

$this->bbcode_second_pass_quote('Concerned', '[')Maybe China can buy Airbus, strip down the factories and start making them in China. Alternatively European workers could take Chinese style wages and no benefits in "reforms" to make them more competitive.
Capitalism the usual race to the bottom. Google Ricardos Iron Law of Wages, Ricardo was more famous for his comparative advantage analysis wine from Spain and or Portugal for wool from England.

[Bas]

Well, there you have it, we're past the point (for quite some time now, really) where the weak dollar makes American products more competative on the world markets. This should translate in increased export from the US to especially Europe, while the imports from especially Europe should decline. Ofcourse the American trade deficit has been so large for so long that it will still be a some time before it's back in balance or in surplus, so the dollar may still fall more, especially against the emerging markets' currencies, so that the trading balances also with them become a little more balanced.

In terms of PO; there's probably a big recession headed the US' way, with also plenty of oil demand destruction, and most probably a more mild recession in Europe a little later on with corresponding smaller oil demand destruction, and growth in the emerging markets will be slowed, both in terms of GDP and use of oil; some of the US' oil will instead go to Asia, going from a scenario that we'll stay on this production plateau for the next few years. (which ofcourse you may well consider to be optimistic.)

[RdSnt]

The US dollar may be inflating to a value of zero but that doesn't mean the debt/deficit disappears. The money is still owed.
As well, since the US economy is completely dependent on the consumer and the consumer has no savings, the debt is just going to get much worse. The consumer has to borrow for everything.
Then we have to derivatives mess that Wall St. has been desperately trying to hide. That's not going to last.
All the pundits have been turning themselves inside out to avoid the D word, so it's a "severe recession" a "deep recession", etc.
The longer Wall St. stalls and the more the Fed. props up these criminals, the harsher and more sudden the coming Depression is going to be.

There's no plan here and there's no control. What we have is a giant house of cards with more and more hands attempting to keep the whole stack upright. Sooner rather than later someone is going to panic (and it won't have to be a big event), rush in to help only to tip to whole works over.

[aflurry]

hey RdSnt,

what's that machine on your avatar?


also - is there a technical difference between recession and depression? or is it just a matter of degree with the crossover only vaguely defined?

[EndOfGrowth]

I think it's wishful thinking that the US and Europe will get away with just a recession (zero growth). All the evidence suggests that we are heading for a depression (-ve growth)

[EndOfGrowth]

Looks like the UK is almost in recession

The news came as third quarter GDP figures were released, showing slower growth in the UK economy than has been expected. The Office for National Statistics said the economy grew by 0.7pc in the quarter, below the previous estimate of 0.8pc.
http://www.telegraph.co.uk/money/main.j ... bba122.xml


Growth in the new year will have stalled imo

[Zardoz]

$this->bbcode_second_pass_quote('aflurry', 'h')ey RdSnt,

what's that machine on your avatar?

[SILENTTODD]

The biggest dead weight on the import side of the American import/export scale since the early 1970’s has been Oil.

America would have had export excesses for almost every year of the last 40 if not for the cost of imported Oil.

Further decline in the value of the dollar only makes the Oil tab grow larger. Exporting more requires more Oil, so there is no way the U.S. can export its way to a surplus again, not with the current American profligate use of Oil for cars and frivolous travel we have become so accustomed to.

[Kingcoal]

It just shows the interdependency of world trade, which is much more important than many understand. The problem is that there are too many exporters and not enough importers. Every country has the same problem; too many unskilled or low skilled people to employ. Employment equals votes in democratic countries and less riots in totalitarian countries like China. Manufacturing is the ticket for well paying (from a relative point of view) jobs for unskilled and low skilled workers. These are the people who always suffer. I'm old enough to remember the hardy days of the high paid union worker in the US. Back then, why go to college when you could make even more money as a union factory worker? Well, the unions failed in the US and the writing is on the wall in the EU. They did everything they could, but they couldn't stop companies from just packing up their bags and moving out. After all, the unions don't own the company, the shareholders do. And in nations that respect property rights (that includes the EU and US), there is nothing that can stop them from selling out and moving production facilities overseas. If you had a billion Euros invested in a company and found that you could get a much better return on investment and more importantly, ensure the survival of the company and hence your investment, if you just fled towards an LCR what would you do? Don't know what an LCR is? Well you aren't much up on corporate jargon are you? LCR is low cost region. China, India, Thailand, etc, etc.

The problem that Airbus has is that if they can’t make a profit, then operating expenses have to come from the governments that support the company. EU countries will have to step up and foot that bill, or not. If they increase subsidies, they have to print more Euros. In a backhanded way, the US is pressuring the EU central bank to inflate the euro, which will help out with the exchange rate with the dollar. Remember the broken record message coming out of the Treasury department; “the United States supports a strong dollar!”

[Concerned]

$this->bbcode_second_pass_quote('Harlequin', 'W')asn't the Iron Law of Wages developed by Ferdinand Lassalle?

[thor]

$this->bbcode_second_pass_quote('Kingcoal', 'T')he problem that Airbus has is that if they can’t make a profit, then operating expenses have to come from the governments that support the company. EU countries will have to step up and foot that bill, or not. If they increase subsidies, they have to print more Euros. In a backhanded way, the US is pressuring the EU central bank to inflate the euro, which will help out with the exchange rate with the dollar. Remember the broken record message coming out of the Treasury department; “the United States supports a strong dollar!”

[Cabrone]

The US dollar may be helping US aviation companies but the whole industry is going to take a beating anyway.

It's seems a rather hollow advantage TBH.

[cube]

$this->bbcode_second_pass_quote('thor', '.')..
Airbus is doomed. Plans are to boot 10.000 employees and more are to follow. Secondly, the only way to pay the bill is to print Euros and by moving to a low cost region where people only care about a bowl of rice at the end of the day.

[emersonbiggins]

$this->bbcode_second_pass_quote('cube', '
')The Brits were "clever" to give up on the aircraft manufacturing business. Call me paranoid but I have this theory that aircraft manufacturing, operating and accommodating has and always will be a money losing industry and it only exists (thanks to government help).

[thor]

$this->bbcode_second_pass_quote('cube', '
')
10,000 employees? This has got to be the worst French "strategic failure" since WW2. I hear it's VERY difficult for companies to layoff workers in Europe, unlike over here in America it's no more difficult then cutting a tree down with a chainsaw. Things must be getting pretty bad. This financial fiasco reminds me of the Concorde supersonic plane.

[KevO]

$this->bbcode_second_pass_quote('', 'G')ulf Arab rulers are expected to change currency policy at a summit this week without disrupting exchange rates between oil producers preparing for monetary union, the United Arab Emirates state news agency said.

Rulers of Saudi Arabia and five neighbours meet in Qatar's capital Doha on Monday and Tuesday under intense market scrutiny after the UAE urged regional central banks to sever pegs to the tumbling dollar and track a currency basket.

[Kingcoal]

$this->bbcode_second_pass_quote('thor', 'I') like Airbus, I really do, but I don't see how this company is going to survive in the long run.

[Andy]

$this->bbcode_second_pass_quote('KingCoal', ' ')thor wrote:
I like Airbus, I really do, but I don't see how this company is going to survive in the long run.


If it's any consolation, I don't see how any commercial aircraft manufacturer can survive peak oil.