“Bulgaria Orders 4 Gowind-200 Frigates from DCNS” seemed to herald both a EUR 900 million order and a new shipbuilding center for DCNS. Despite promises of 100% industrial offsets to the Varna shipyard, and a price that was reportedly lowered to EUR 780 million, Bulgaria’s defence minister Vesselin Bliznakov recently announced that Bulgaria’s government could not afford the deal. Instead, Bulgaria will buy 3 upgraded ships from Belgium for only EUR 54 million, payable over 8 years. The ships are 2 frigates (almost certainly the Wielingen and the Westdiep, both commissioned in January 1978), and a minesweeper of the Tripartite Class.
EADS Airbus’ politically controversial “Power 8” restructuring plan is already planning to shift future production out of Europe, and a recent EADS announcement intensified that pressure with more downward pressure on earnings. Worse, Airbus’ customers insist on pricing their contracts in dollars, while its costs are mostly denominated in Euros. EADS CEO has complained that every time the US dollar falls by 10 cents, Airbus loses $1 billion dollars – even as the Euro has risen from $1.20 to almost $1.50 over the last few years. Some analysts think this is a dodge (financial hedging strategies exist), but CEO Louis Gallois has apparently decided that if you can’t beat ’em, you had better join ’em. Deutsche Welle:
“We don’t have a choice,” Louis Gallois, chief executive of EADS, told Europe 1 radio Monday. Gallois said the only way to “prepare the company for a dollar that no one can control is — unfortunately — to set up shop in a dollar zone.”
The French government is reportedly less than happy about this, and has fired a shot across EADS’ bow in return…
