Trump tariffs may push Airbus to prioritise non-US clients, CEO says

[Trogdor the Burninator]

Feb 20 (Reuters) - Airbus could prioritise deliveries to non-U.S. customers if tariffs imposed by U.S. President Donald Trump were to disrupt the company's imports in the country, CEO Guillaume Faury said in an interview with CNBC on Thursday.

Trump said on Wednesday he will announce new tariffs over the next month or sooner, adding to duties he has introduced since taking office, which could affect the aerospace industry and its suppliers among other sectors.

"We have a large demand from the rest of the world, so [if] we face very significant difficulties to deliver to the U.S., we can also adapt by bringing forward deliveries to other customers which are very eager to get planes", Faury said.

US airlines lose out while their competitors overseas get a boost. Well done President Trump!

 

[durangodawood]

We have 737 MAX's, so no problem.... so long as Trump can cut through all that useless inspection and certification red tape.

 

[7thKeeper]

We have 737 MAX's, so no problem.... so long as Trump can cut through all that useless inspection and certification red tape.

You're about to have even more. A Chinese airline that had been in the process of being buying Boeing is now suspending it's purchase because of the tariffs and the increase in price. No word yet on if they'll look to Airbus or if they'll wait.

 

[Aryeh Jay]

You're about to have even more. A Chinese airline that had been in the process of being buying Boeing is now suspending it's purchase because of the tariffs and the increase in price. No word yet on if they'll look to Airbus or if they'll wait.

Woo Hoo! Free Airplanes!

 

[7thKeeper]

Woo Hoo! Free Airplanes!

Who wouldn't want a new Boeing!? Just check the bolts on the doors before takeoff.

 

[Richard T]

The CEO said if there is a problem getting the planes to the U.S. If the tariffs are passed on to the buyers then what is the problem? I'm thinking he could have said that few will buy airbus planes in the USA because with tariffs most of those sales are going to Boeing. This is one problem with tariffs. Boeing gets a boost in the USA, but a downgrade in the rest of the world. Part of that boost usually means that if the tariff for other competitors is 20%, Boeing can raise prices maybe 10% and still get more sales in the USA. This represents some of the inefficiencies of tariffs. Airbus get a boost in the rest of the world and a downgrade in the USA. No doubt they can charge more in those markets too as long as demand is decent. Even weirder is that parts from the Airbus, Alabama plant might be subject to EU tariffs when they ship those to France. Boeing too gets some parts in other places. So less competition, plus tariffs on some parts, equal higher prices.

Tariffs if lasting, rework the whole supply chain. Large and nimble companies will do just fine. Great companies with important products should always diversify, and many even have secondary suppliers in case there a need. What;s funny about China is the shift away from them was already happening. Labor in China now is more expensive than other parts of Asia. China however, has larger scale and if you irritate them, they will basically cut you out of their market. Trump does well to make this choice for companies to move out of there easy. The poor choice though is messing with the other Asian nations that are starting to take up the slack. Some industries like textiles will not be coming back to the USA. I'm guessing the CEO's are looking at lower tariff nations in South America. Most however, are waiting for clarity since everything is still being negotiated.

 

[Gene2memE]

Another example of how bone-headed these tariffs are.

Airbus actually has 2 final assembly lines in Mobile, Alabama - one producing A320neo family aircraft and one producing the A220 (formerly Bombardier CSeries).

That sounds like US airlines should be getting lots of Airbus aircraft.

The problem is that about 50% of the content for these 'made in USA' aircraft is still imported from overseas. And, it's not like you can just relocate these factories to the US in short order.

Take the wings for the A220 for instance. They're made in Belfast, Northern Ireland. They're made of carbon composite and use a process (resin transfer infusion) that is proprietary and would take years to set-up elsewhere. It's not just as simple as setting up a production line (which took 4 years at an existing site and ~$750 million in investment). Everything, from the fibre laying machines to the autoclaves and deep freezing equipment would need to be certified by aviation authorities.

Not just the FAA, but also EASA and any other national level authority that wants to. That take a lot of time (just ask Boeing).

You have to replicate that process for everything else - nacelle honeycomb structures (made in Scotland), the engine high-pressure fan section (made in Germany), the cabin monuments (made in France), the air management system (made in Switzerland), the flight control actuators (made in France), the landing gear (Canada and Germany).