Airbus Suppliers: A Rough Road Ahead

As if driving its customer satisfaction ratings and its financial valuation into a nosedive was not enough, Airbus is now damaging its supplier relationships as well. Thanks to a never ending spat of A380 program delays -- which seem to come about as often as raunchy text messages fly back and forth in the halls of Congress -- "Suppliers to the A380 are likely to see delays to revenue and profits, plus high fixed-costs and working capital," according to a statement from Goldman Sachs, contained in this article. The piece also mentions how order delays will impact Airbus' ability to gain leverage over its suppliers and how the continued string of delays is making its supply base "more dependent on rival aircraft-maker Boeing" while also "driving up supply-chain tension in the current upcycle [making] it more difficult for Airbus to pressure suppliers on costs." Overall, it looks like a perfect mess for Airbus and its supplier relationships. Not that Boeing is perfect, but they're about as far from the fallout of Toulouse as they can get.

Jason Busch

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