EADS To Consider Moving Production Outside Europe

Aerospace giant EADS has today indicated in no uncertain terms that it would be prepared to move its manufacturing operations outwith Europe, to take advantage of global currency fluctuations in a move that has sent its share price tubmling by almost 2% on the day’s trading.

The news today from the company, which owns Airbus, came from under-fire chief executive, Frenchman Louis Gallois, who suggested that the state of the dollar had made its manufacturing operations within Europe far too expensive to justify, in comparison with other global currency zones, given that the company sells its aircraft in dollars which has seen margins slashed and underlying revenues falling as a result of currency weakness.

Meanwhile the rising value of the Euro in comparison to the dollar has seen the company’s expenses continue to increase, particularly in relation to labour, proportionately against its falling sales figures, giving the group an up-hill battle to maintain profitability.

Airbus currently manufactures its planes in Europe, i.e. within the Eurozone, although it does also produce in the UK to avoid the problem of having only euro-based expenses, which in situations like the present could spell disaster for the company.

Speaking today on the situation, Gallois hinted that the problems with the dollar were affecting the success of European industry as a whole, and the currency policy within the US as regards its dollar would see its value continue to plummet in perpetuity.

With Airbus contemplating a move of manufacturing operations, it would seem as though the continuing strength of the euro currency is beginning to take its toll on Eurozone industry, particularly as the dollar continues to steadily decline in value day after day in currency exchanges.

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