EADSY - Airbus SE

Other OTC - Other OTC Delayed Price. Currency in USD
+0.32 (+0.85%)
As of 1:50PM EST. Market open.
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Previous Close36.89
Bid0.00 x 0
Ask0.00 x 0
Day's Range36.73 - 37.24
52 Week Range27.34 - 38.45
Avg. Volume162,424
Market Cap115.637B
Beta (5Y Monthly)1.23
PE Ratio (TTM)33.97
EPS (TTM)1.10
Earnings DateN/A
Forward Dividend & Yield0.47 (1.26%)
Ex-Dividend DateApr 10, 2019
1y Target EstN/A
  • Markets: Airbus boosts Europe amid virus nerves
    Reuters Videos

    Markets: Airbus boosts Europe amid virus nerves

    In a week of downsides for global markets, Airbus was one of the ups. The planemaker has settled corruption probes in the U-S and Europe. The news helped settle the mood on European bourses in early trade, after they suffered their worst day in some four months on Monday. But - amid continuing fears over China's coronavirus outbreak - that was about as good as it got. Luxury stocks - badly hit because of their heavy exposure to Chinese demand - reversed early gains to continue their slide. Software maker SAP fell around 2.5 per cent despite an upbeat outlook ... And within hours of the start, a negative tone was again descending on most bourses. As it had already done in Asia. The Nikkei - down nearly one per cent at one point - closed 0.6 per cent lower. MSCI's broadest index of the region outside of Japan slumped 0.8 percent. And in South Korea, the Kospi sank 3 per cent. The government there taking steps to prevent the coronavirus spreading, according to finance minister Hong Nam-Ki. (SOUNDBITE) (Korean) SOUTH KOREA'S FINANCE MINISTER, HONG NAM-KI, SAYING: "The government will make all out efforts by mobilizing all policy power to secure citizens' safety and minimize its impact on the economy until the concerns over the new coronavirus infection are completely over." Oil remained under pressure on concerns the virus could dent demand. And the dollar was driven to 8-week highs by safe haven flows. The economic impact on China itself, say traders, is the next big question. An unknown as yet as hard to get a handle on as the potential spread of the virus itself.

  • Airbus agrees to settle corruption probes with U.S., France, UK
    Reuters Videos

    Airbus agrees to settle corruption probes with U.S., France, UK

    Airbus has agreed in principle to settle an investigation into allegations of bribery and corruption. British and French authorities looked into the European planemaker for suspected corruption over jet sales dating back more than a decade. Airbus also faced U.S. investigations over suspected violations of export controls. The planemaker said it couldn't comment on precise details of the settlements - and wouldn't reveal how much it expected to pay out. Some press reports suggested a figure of around $3.3 billion. Airbus shares took off on the update - up around 2.3% in early trade - as investors reacted positively to Airbus drawing a line under the affair. Airbus has already fired more than 100 people over ethics and compliance issues after its own probe into the allegations. British and French regulators were first alerted just over three years ago when Airbus made inaccurate declarations over payments to sales agents. A German probe into Airbus for potential misuse of client documents is ongoing.

  • Bloomberg

    Boris Johnson Chooses Huawei Expediency

    (Bloomberg Opinion) -- There’s a fine line between a fudge and a workable compromise. In Britain’s handling of Huawei Technologies Co., Prime Minister Boris Johnson has just about managed to secure the latter.The U.K. has brushed off the U.S.’s complaints and decided to allow its telecoms operators to install equipment made by “high-risk vendors” — read: Huawei — in their networks. But the government drew a line, excluding it outright from sensitive core parts of the network and capping its gear’s presence in the non-sensitive parts at 35% of the total.Outwardly, President Donald Trump won’t like the solution. But if the U.S.’s loudest protestations about security concerns were genuine, and not in fact an effort to stymie Chinese economic influence, then it should be able to stomach the compromise. American concern has focused on the risk of Huawei building backdoors into networks that can be readily exploited by Chinese state-sponsored actors. After all, China passed a law in 2017 obliging companies to assist the state with espionage efforts. And while no such backdoors have yet been found, that isn’t proof that they don’t exist.QuicktakeHow Huawei Landed at the Center of Global Tech TussleBut at the same time, a great deal of capital, both political and actual, has been invested in the promise of fifth-generation networks. Globally, revenue from the so-called Internet of Things will quadruple to $1.1 trillion by 2025, industry body the GSMA estimates. With about a third of the $50 billion global telecoms equipment market, Huawei has become the biggest player, with some of the best technology and lowest prices. Banning it would have ramifications for the pace of the 5G rollout.That is why the U.K. approach is a pragmatic one. It’s allowing Huawei products into the radio-access network — essentially the antenna and base stations — but keeping it out of the core: the server hubs that direct data around the network. Network security focuses on three pillars: confidentiality, integrity and availability. The first one focuses on ensuring that bad actors can’t see your data. The second is about making sure no-one is altering data during transmission. And the third is about guaranteeing network access when it’s needed.By those criteria, the U.K. decision seems to eliminate most, though not all, of the risk. If there are indeed backdoors into the parts of the network using Huawei gear, then they will likely only have access to data from that 35% of the network using it. It should still be possible to keep the equipment out of sensitive networks, such as those running the power grids and police communications. Indeed, France won’t let operators use Huawei antenna in Toulouse, for instance, where the airplane giant Airbus SA is based. BT Group Plc was already stripping Huawei gear out of its existing core networks. It likely would have been hard to secure lucrative government contracts without doing so.At any rate, telecommunications firms’ cybersecurity efforts will be on heightened alert where the slice of their operations that do still contain Huawei products is concerned. It might be easier to spot disturbing anomalies. If a base station is siphoning off gobs of data to somewhere in Asia, that will be more noteworthy than if it’s coming from the core network. As the distinction between core and edge networks blurs in the move toward full 5G, Huawei’s role must be managed even more carefully.Johnson had three sets of interests to navigate: the Americans threatened to cut off intelligence sharing with Britain in response; China’s ambassador warned a Huawei ban would have “substantial” repercussions for investment in the U.K.; and Britain’s own network operators — Vodafone Group Plc., BT, O2 (part of Spain’s Telefonica SA) and Three (owned by Hong Kong-based CK Hutchison Holdings Ltd.) — also had their say.The stakes are higher for these companies than for their U.S. peers, who are already prevented from using almost any Huawei products. That’s because they’re poorer. AT&T Inc. and Verizon Communications Inc. enjoy average revenue per customer of close to $50 a month. In the U.K., Vodafone gets just 14 pounds ($18.22), according to Bloomberg Intelligence.British carriers are therefore much more cost sensitive. Knocking Huawei out of the running in the radio-access network would have left a duopoly of Nokia Oyj and Ericsson AB, giving the suppliers a huge amount of pricing power. Samsung Electronics Co. is accelerating into the industry, but its gear is often even pricier. And U.S. suppliers such as Juniper Networks Inc. and Cisco Systems Inc. compete more effectively in the core network.The European Union looks set to issue guidelines that imitate the U.K. approach. The U.S. may not like it, but Johnson was never going to keep everyone happy.To contact the author of this story: Alex Webb at awebb25@bloomberg.netTo contact the editor responsible for this story: Melissa Pozsgay at mpozsgay@bloomberg.netThis column does not necessarily reflect the opinion of Bloomberg LP and its owners.Alex Webb is a Bloomberg Opinion columnist covering Europe's technology, media and communications industries. He previously covered Apple and other technology companies for Bloomberg News in San Francisco.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Is 2020 the Year of Space Tourism? 3 Stocks in Focus

    Is 2020 the Year of Space Tourism? 3 Stocks in Focus

    Given the successful trials and developments in the space tourism industry, we have shortlisted three stocks that must be kept an eye on.

  • Barrons.com

    Airbus Settles Global Corruption Probe, Sending the Stock Higher

    Airbus stock climbed on Tuesday as the European plane maker reached a settlement with U.S., British and French authorities over allegations of bribery and corruption.

  • Airbus agrees to settle corruption probes with France, UK, U.S.

    Airbus agrees to settle corruption probes with France, UK, U.S.

    A settlement would allow it to avoid criminal charges which, if proven, could have led to the company being disbarred from public contracts in the United States and European Union - a massive setback for one of Europe's top defense and space firms. The European planemaker has been investigated by French and British authorities for suspected corruption over jet sales dating back over a decade. It has also faced U.S. investigations over suspected violations of export controls.

  • The Airbus-Boeing Duopoly Is Extremely Unbalanced

    The Airbus-Boeing Duopoly Is Extremely Unbalanced

    (Bloomberg Opinion) -- Whenever it’s seemed like Airbus SE might steal a march on Boeing Co., something has come along to throw a spanner in the works. A decade ago Airbus was consistently delivering more planes than its arch-rival but its competitiveness was eroded by the strong euro and the nightmare of building the ill-fated A380 superjumbo.Until the two recent fatal crashes involving the Boeing 737 Max, it seemed like a similar story. While both companies had brimming order books, Boeing’s cash flow was going through the roof and Airbus was bedeviled by production difficulties on new commercial aircraft and technical troubles involving the A400m military transporter. A long-running World Trade Organization dispute with Boeing tilted in the Americans’ favor. Worst of all, Airbus found itself under investigation by U.K., French and U.S. authorities over allegations it paid bribes to win aircraft orders and violated arms export laws.Tuesday’s news that Airbus has reached tentative agreement about a settlement of those cases ends a big management distraction and a cloud over the company’s investment case. The alleged payments to middlemen are a stain on Airbus’s history. The good news is that following a management clear-out, the manufacturer is well positioned to move on from this dark period.There’s no clarity yet on the fines Airbus will end up paying; investors have long assumed they’ll run into the billions. But with almost 18 billion euros ($19.8 billion) of gross cash at the end of October, and a big cash inflow expected in the fourth quarter, Airbus will have no trouble paying the bill.The A400m continues to be a burden on cash flow and Airbus is still having production difficulties, this time involving the A321 passenger jet. Even so, with the 737 Max still grounded and Boeing facing a backlash from regulators and customers, the duopoly is starting to look very unbalanced.Airbus trounced Boeing last year on orders and deliveries, and 2020 isn’t shaping up any better for the Americans. Reports that Boeing’s new boss Dave Calhoun wants to rethink his company’s plans for a new mid-market aircraft should allow Airbus’s long-range A321XLR to lock up more orders.To be sure, a wounded rival is dangerous thing. Boeing could yet decide that the best way to leave behind the 737 Max ignominy is to build a completely new single-aisle aircraft, which would oblige Airbus to follow suit. Yet the almost 50% increase in Airbus’s share price since the start of 2019, reflects hopes it will be able finally to press home its advantage and lift cash returns to shareholders. The shares rose another 3% on Tuesday, valuing the company at 107 billion euros ($118 billion).A decade ago Airbus was worth just 11 billion euros. While it’s long been Boeing’s equal in technical innovation, in profitability and cash terms the European plane-maker seemed a tortoise to Boeing’s hare. After the 737 Max disasters we can see the corners Boeing cut to engineer that success, from squeezing suppliers to browbeating regulators. Airbus can afford to reward shareholders without being so aggressive.Paying bribes to win business is deplorable; selling a fundamentally unsafe aircraft is worse. Both companies have lessons to learn but Airbus’s wounds are closer to healing.To contact the author of this story: Chris Bryant at cbryant32@bloomberg.netTo contact the editor responsible for this story: James Boxell at jboxell@bloomberg.netThis column does not necessarily reflect the opinion of Bloomberg LP and its owners.Chris Bryant is a Bloomberg Opinion columnist covering industrial companies. He previously worked for the Financial Times.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Financial Times

    Airbus reaches deal to settle corruption probes

    Airbus has agreed to settle a bribery and corruption probe with regulators in the UK, France and the US, in a move that could see the aerospace group pay billions of dollars in penalties. Airbus said it has reached an agreement in principle over allegations of bribery and corruption, as well as compliance with US arms trafficking regulations. Airbus did not provide any further details, but analysts had forecast fines of more than €3bn to follow the complex negotiations between the three agencies.

  • Airbus agrees to settle corruption probes with France, UK, U.S

    Airbus agrees to settle corruption probes with France, UK, U.S

    A settlement would allow it to avoid criminal charges which, if proven, could have led to the company being disbarred from public contracts in the United States and European Union - a massive setback for one of Europe's top defence and space firms. The European planemaker has been investigated by French and British authorities for suspected corruption over jet sales dating back over a decade. It has also faced U.S. investigations over suspected violations of export controls.

  • Barrons.com

    Boeing Has Many Problems. Its Wide-Body Jet Isn’t One of Them.

    Wall Street is starting to worry about something impacting Boeing other than the troubled 737 MAX jet. Production rates on Boeing’s biggest jets might come down. Is that a new problem for the stock? Probably not.

  • 7 Exciting Tech Stocks With International Flair

    7 Exciting Tech Stocks With International Flair

    Thanks to the positive sentiment surrounding the U.S. and China signing a "phase one" trade agreement, several tech stocks have skyrocketed recently. That's not surprising considering that China is both a massive and still growing market for technological innovations. Nevertheless, investors may want to limit their exposure to the domestic space in favor of international names.For one thing, the U.S. equity sector has broadly and consistently outperformed its global counterparts over the last several years. Of course, this is not a guarantee that foreign companies will start beating out American competitors. However, markets generally move cyclically. Purely from a probability standpoint, it might make sense to consider international tech stocks.Furthermore, U.S. tech stocks exposed to geopolitical risks in a magnitude that you don't usually find with international counterparts. Let's face it: We're the world's sole superpower. And like it or not, it's our duty to support the cause of freedom wherever possible. But because of this moral mandate, we are necessarily involved in controversies.InvestorPlace - Stock Market News, Stock Advice & Trading TipsLong story short, our companies can be on the receiving end of unfavorable treatment, like in the U.S.-China trade war. However, some international tech stocks might avoid such geopolitically motivated troubles.Finally, international tech stocks have home field advantage. Although U.S. blue chips always have their eyes set on global expansion, international organizations best understand the nuances of their market or region. * 7 Healthcare Stocks With 100% Street Support So, if you're ready to step outside your comfort zone, here are seven international tech stocks to put on your radar. Mercadolibre (MELI)Source: Shutterstock E-commerce firm Mercadolibre (NASDAQ:MELI) is what I would call a time-capsule investment among international tech stocks to buy. Based in Argentina, Mercadolibre is actually the largest e-commerce platform in Latin America. Moreover, it leads in market share in the countries where it has a presence. In other words, MELI stock is beating out Amazon (NASDAQ:AMZN) in several emerging market nations.Because of its similarity to our homegrown e-commerce stalwart, most folks refer to Mercadolibre as the Amazon of Latin America. Personally, I think it's a fair comparison. However, MELI stock is a name you want to watch closely because the underlying organization is pushing beyond that title. The company sells merchandise, offers a merchant network platform, and has a payment processing service.Best of all, e-commerce adoption in Latin America is growing rapidly. Therefore, MELI stock is a long-term investment where patience can net huge returns. Embraer (ERJ)Source: Shutterstock When people think about aviation tech stocks, typically Boeing (NYSE:BA) and Airbus (OTCMKTS:EADSY) come quickly to mind. However, Brazilian firm Embraer (NYSE:ERJ) should also be on your list of publicly traded firms to watch closely. Perhaps most famous for its line of gorgeous executive airplanes, ERJ stock also has exposure to the lucrative defense market.But what makes Embraer stand out among international tech stocks is its innovative, envelope-pushing projects. Currently, the company has a partnership with Uber Technologies (NYSE:UBER) to develop aircraft for the transportation needs of tomorrow. While Uber has essentially catalyzed the ride-sharing phenomenon, it's not done: it wants to dominate the skies as well. That's a compelling reason to buy ERJ stock. * 7 Earnings Reports to Watch Next Week Want another reason? Historically, ERJ stock is undervalued. Since July of 2000, shares are actually down a bit. Basically, ERJ hasn't moved for 20 years. But a compelling partnership with Uber might change that. ASML (ASMLF)Source: Shutterstock I'm not really sure if you'd call ASML (OTCMKTS:ASMLF) a household name. But within the arena of international tech stocks, ASML is a true powerhouse. Headquartered in Veldhoven, Netherlands, the semiconductor firm has multiple corporate clients throughout the world. Chances are, if you used any modern digital device, you've used ASML products. Due to the organization's importance to the sector, having some exposure to ASMLF stock is likely a wise bet.A key driver for ASML is its innovations in lithography. This term describes "printing" unique patterns on silicon wafers via an advanced projection system. Furthermore, ASML is the world's sole tech firm that utilizes extreme ultraviolet light. Essentially, the company's next-generation technology allows it to imbue semiconductors with ever-increasing data capacities. And with multiple tech industries ranging from PCs to mobile devices clamoring for higher capacities, ASML stock is indefinitely relevant. Adyen (ADYEY)Source: Shutterstock Launched in the over-the-counter exchange early October of last year, Adyen (OTCMKTS:ADYEY) is by default one of the riskiest international tech stocks. Therefore, I'll warn you upfront and early that ADYEY stock is not for the faint of heart. Indeed, the disappointing environment surrounding much-hyped international public offerings should give you some pause.At the same time, ADYEY stock is undeniably compelling. Adyen started life as an idea to bring payments transactions for businesses under one cohesive umbrella. Given that Adyen is headquartered in the heart of western Europe, I can see why the founders got this concept. * 10 Recession-Resistant Services Stocks to Buy Later, the company evolved into an e-commerce, business solutions and data analytics platform. Basically, it's the European version of Square (NYSE:SQ). Now, I like Square's growth prospects in the U.S. and certain international markets. But Adyen may offer an understanding of the European business environment that gives it a distinct advantage. Therefore, a speculative but measured shot on ADYEY stock isn't a bad idea. Momo (MOMO)Source: Shutterstock Almost always, one of the justifications for buying China-based publicly traded companies is the underlying country's population size. At roughly 1.4 billion, China technically has the world's biggest addressable market for everything. But in my opinion, only few companies like Momo (NASDAQ:MOMO) can use this population statistic to its benefit.Momo is a video and social networking app. That said, investors know MOMO stock as the Tinder of China. Most people use Tinder as a dating service, and so it is with Momo despite it being a more broad-usage social app.Now, you understand why I think population size matters for MOMO stock. Demographically, the underlying company has hit a home run: approximately 80% of the app's users are between 19 to 32 years old. Many of these individuals will be interested in using its services to socialize and set up dates. Sony (SNE)Source: Shutterstock In many ways, Sony (NYSE:SNE) was the dominant consumer electronics player before Apple (NASDAQ:AAPL) ruined everything. First, Apple's iPod obliterated Sony's iconic Walkman, which by then turned into a physically hulking device. Later, the iPhone and iPad separated the two companies by several lightyears, leaving SNE stock as a sad shell of its former self.However, one look at the technical charts will confirm that Sony has found its way. In my view, one of the most compelling drivers for SNE stock is the Japanese tech firm's sensor technology. Featured in multiple smartphone brands, including the current-generation iPhone, Sony has impressed millions of mobile users across the globe. And it's set to do it again with even bigger, more powerful sensors for Apple's future iPhone 12. * 10 Stocks to Buy as the 2020 Presidential Election Approaches Lastly, you should consider SNE stock among your international tech stocks to buy for Sony's unfailing PlayStation business unit. Yes, over the last several years, the Japanese icon attracted much scorn. However, its PlayStation unit is a different animal. And with the PS5 console coming out later this year, SNE is a strong opportunity. Jumia Technologies (JMIA)Source: Shutterstock At the top of this list of international tech stocks to buy, I mentioned Mercadolibre, the Amazon of Latin America. I'm going to take it full circle with Jumia Technologies (NYSE:JMIA), which many people regard as the Amazon of Africa.Similar to Mercadolibre, JMIA stock has an extraordinarily fascinating broad-view narrative. Indeed, the African continent may represent the most compelling narrative. According to data compiled by Quartz Africa, the continent's "consumer e-commerce market, valued at $5.7 billion in 2017, is less than 0.5% of the continent's GDP, far below the global average of 4%."If you want to talk about an addressable market, Jumia Technologies has ridiculous upside potential. But will this translate to strong returns for JMIA stock?It might due to many efforts to bring African populations into the financial system. If and when they become banked, their access to e-commerce platforms will logically increase.However, the African market is largely a frontier one. Thus, a short-seller made sharp, though unverified accusations of fraud against JMIA stock. One thing is for sure: If you're going to gamble here, do so carefully.As of this writing, Josh Enomoto is long SNE. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Stocks to Buy as the 2020 Presidential Election Approaches * 5 Dividend Stocks With Low Payout Ratios and High Yields * 4 Post-Holiday Retail Stocks Still Worth a Look The post 7 Exciting Tech Stocks With International Flair appeared first on InvestorPlace.

  • Benzinga

    Airlines Extend 737 MAX Blackouts As Boeing Eyes Earlier Production Start

    Financial pain from the grounding of Boeing's 737 MAX program continues spreading to key industry stakeholders, but new CEO David Calhoun said Wednesday the company plans to slowly restart production a few months before aviation authorities certify the plane to fly again. Earlier, Canadian carriers WestJet and Air Canada said they are removing the 737 MAX from their flight schedules through June 24 and June 30, respectively, following Boeing's Tuesday estimate that aviation authorities won't recertify the plane for commercial service until midyear. Based on the new guidance, Southwest Airlines (NYSE: LUV) will likely extend MAX-related changes to its flight schedule beyond June 6, Chairman and CEO Gary Kelly said in the company's fourth-quarter financial report.

  • SpiceJet to take 'substantial' profit hit from 737 MAX grounding - Chairman

    SpiceJet to take 'substantial' profit hit from 737 MAX grounding - Chairman

    The budget carrier is in active talks with the planemaker on compensation for 737 MAX-related costs, Singh told the Reuters Global Markets Forum, adding he expected a payment from Boeing to compensate some of the lost profit and he wants to give the U.S. firm "every possible opportunity" to recover before turning to rival Airbus.

  • Boeing's new CEO orders rethink on key jetliner project

    Boeing's new CEO orders rethink on key jetliner project

    LONDON/CHICAGO (Reuters) - Boeing Co's new chief executive has sent the aerospace giant back to the drawing board on proposals for a new mid-market aircraft, effectively shelving in their current form plans worth $15 billion-$20 billion that had been overtaken by the 737 MAX crisis. A decision on whether to launch a New Midsize Airplane (NMA) seating 220-270 passengers, which seemed imminent barely a year ago, had already been postponed as Boeing gave all its attention to the grounding of the smaller 737 MAX after two fatal crashes. A Boeing spokesman said Calhoun had ordered up a new study on what kind of aircraft was needed.

  • Boeing Backs Dividend While 737 Max Will Miss Another Summer Travel Season
    Investor's Business Daily

    Boeing Backs Dividend While 737 Max Will Miss Another Summer Travel Season

    Boeing pared losses after the new CEO reaffirmed the company's dividend even with the 737 Max headed for another summer grounded.

  • Benzinga

    Commentary: The WTO's Parenting Skills Need Improvement

    The views expressed here are solely those of the author and do not necessarily represent the views of FreightWaves or its affiliates. The World Trade Organization (WTO) is like a parent – somewhat. It ...

  • Airbus hits record highs, 737 MAX buyers fall on latest Boeing news

    Airbus hits record highs, 737 MAX buyers fall on latest Boeing news

    PARIS/LONDON (Reuters) - Airbus' shares hit record highs on Wednesday, after U.S. arch rival Boeing warned of further delay in returning its grounded 737 MAX airliner to service, while Boeing customers and suppliers fell on the news. Boeing said on Tuesday that it did not expect to win approval for the 737 MAX to return to service until mid-year. Airbus was up by 1.85% at 138.9 euros at 1215 GMT, the top performer on France's benchmark CAC-40 index after hitting a record high 139.32.

  • Bombardier and ThyssenKrupp: A Tale of Two Industrial Calamities

    Bombardier and ThyssenKrupp: A Tale of Two Industrial Calamities

    (Bloomberg Opinion) -- Canadian transportation champion Bombardier Inc. is running out of road. Its shares lost more than one-third of their already much diminished value last week after another disastrous profit warning.The trains and private jet manufacturer may be forced to exit its commercial aerospace joint venture with Airbus SE because of a shortage of cash; a writedown looms when the group reports 2019 results next month. In the meantime, it’s looking at ways to accelerate repayment of its $10 billion debt pile, which suggests a breakup might be on the cards. Bombardier has held talks about a combination of its rail businesses with French rival Alstom SA, Bloomberg reported on Tuesday, adding that this is one of several options being considered.On the other side of the Atlantic another storied industrial conglomerate, ThyssenKrupp AG, is suffering a comparable crisis. The German steel and car-parts maker has put its prized elevator division up for sale to help with its massive debt and pension liabilities.When their respective restructurings are completed, these vast and politically important employers will be shadows of their former selves. ThyssenKrupp has already been booted from Germany’s benchmark Dax index, while Bombardier’s on the cusp of becoming a penny stock (again).So how did they get into such a mess and why haven’t they managed to extricate themselves, despite years of restructuring and several false dawns? In both cases, hubris, shoddy governance and poor project management have played a role in their downfall.   The fate of the two companies was sealed around a decade ago when they bet the farm on high-risk growth strategies — and lost. Bombardier signed off on the C-Series, an ambitious attempt to break Airbus and Boeing Co.’s lock on the commercial aerospace market. The small, fuel-efficient jet won rave reviews but orders were disappointing and delays caused costs to balloon to about $6 billion and debt to pile up. Bombardier made things worse by trying to bring several new business jets to market at the same time. Weak sales forced it to abandon development of the Learjet 85 — resulting in a $2.5 billion writedown — and to cede control of the C-Series to Airbus for the humiliating sum of one Canadian dollar.ThyssenKrupp’s original sin was sinking about 12 billion euros ($13.3 billion) into a pair of steel plants in Brazil and the U.S. to try to keep pace with the acquisitive ArcelorMittal SA. Poor construction work and a faulty business plan led to massive losses from which ThyssenKrupp has never really recovered.Woeful governance had a hand in both corporate disasters. Bombardier has a dual-share structure that gives the founding Bombardier-Beaudoin families majority voting control even though they own a much smaller fraction of the share capital. Pierre Beaudoin served as chief executive officer from 2008 until 2015 — during which time his father, Laurent, remained chairman — but he didn’t do a very good job. Pierre is now the chairman.ThyssenKrupp’s anchor shareholder, the Krupp Foundation, presided over a management culture that prized fealty and the preservation of corporate perks, including the company’s hunting grounds, but failed to prevent compliance breaches. Recent boardroom fireworks at the German giant (two chief executives and a chairman have departed in quick succession) suggest it remains dysfunctional.In their attempt to stop the rot, ThyssenKrupp and Bombardier have followed a similar script. Scrap the dividend, sell underperforming assets, slash thousands of jobs and cut costs. But the cash flow needed to cut debt has never consistently materialized and things have got worse.In 2019 ThyssenKrupp burned through 1.1 billion euros of cash and it expects to consume even more in 2020, risking a breach of banking covenants. Bombardier burned about $1.2 billion in cash last year, far in excess of the roughly break-even target it set at the start of the year.A problem for both companies has been estimating the cost and completion date of large projects. It’s one reason why ThyssenKrupp’s industrial plant construction unit — once a decent source of cash flow from large customer prepayments — has become a bottomless money pit (the unit is now up for sale). At Bombardier, several high-profile train projects have run late and over budget. Bombardier must pay penalties for late delivery.Judging by their balance sheets, both companies appear to be in trouble. ThyssenKrupp has just 2.2 billion euros in net assets, while Bombardier’s liabilities far exceed its reported assets.However, unlike Bombardier’s, ThyssenKrupp’s bonds still trade well above par and its 7.4 billion euros market capitalization is almost four times that of the Canadian company. That’s because ThyssenKrupp still has something of value to sell: The elevators unit could fetch more than 15 billion euros if management decides to part with all of it (the sale process is ongoing and ThyssenKrupp might opt to keep a majority stake).Bombardier doesn’t face an immediate cash crunch thanks to the proceeds of recent asset sales and no big debt maturities this year. But having already offloaded its ageing Q400 turboprop aircraft line and its Belfast wing factory, it’s not exactly overburdened with stuff to sell to meet future liabilities.Neither of Bombardier’s two remaining core divisions, trains and private jets, is worth as much as ThyssenKrupp’s elevators. In 2015 Bombardier sold a 30% stake in its rail division to the Quebec public pension fund, valuing the whole unit at $5 billion. The business aviation division would probably fetch more.For both businesses, the difficulty with flogging more silverware is that what’s left over probably won’t generate much profit.The moral of these twin corporate calamities is simple: If tens of thousands of people depend on you for employment, don’t bite off more than you can chew. And make sure the higher-ups know what’s going on.To contact the author of this story: Chris Bryant at cbryant32@bloomberg.netTo contact the editor responsible for this story: James Boxell at jboxell@bloomberg.netThis column does not necessarily reflect the opinion of Bloomberg LP and its owners.Chris Bryant is a Bloomberg Opinion columnist covering industrial companies. He previously worked for the Financial Times.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Boeing's 737 Max Debacle Helps Airbus Take Off

    Boeing's 737 Max Debacle Helps Airbus Take Off

    Boeing (BA) recorded total sales of only 54 jetliners in 2019 compared with Airbus' 768, per a Bloomberg report.

  • Bloomberg

    Trump’s French Trade Truce Only Puts Off the Battle

    (Bloomberg Opinion) -- Who said Davos doesn’t make a difference? As world leaders, business executives and cheerleaders for the planet descended on the Swiss resort for the annual World Economic Forum, one diplomatic victory was being chalked up on the sidelines: A presidential truce between Donald Trump and Emmanuel Macron over France’s plan to tax tech companies, which the U.S. says discriminates against its national champions.After threats of retaliatory trade tariffs on both sides, Macron took to Twitter to declare a “great” discussion with Trump that would lead to a “good agreement” on de-escalation. Trump retweeted that assessment, responding in the affirmative with “excellent!” But it’s hard to see much worth celebrating yet.What this truce amounts to isn’t exactly clear, for one thing, and it’s certainly not being trumpeted in the way that Trump’s “beautiful monster” of a phase-one deal with China was last week. Avoiding an escalation of tariffs is obviously a good thing. But Trump has already leveled so many trade threats at France and the European Union — driven by hatred of the trade surpluses they run with the U.S. — that it’s hard to feel excited at the prospect of one less gun barrel. If Trump actually ends up retracting his specific threat to hit $2.4 billion of French products with tariffs, that still doesn’t automatically guarantee protection for Airbus aircraft or German cars.It’s also not clear what Macron has gifted Trump in order to get de-escalation onto the agenda. According to the Wall Street Journal, France may have simply offered to “pause” its tech tax until a worldwide solution is agreed upon by the Organization for Economic Co-operation and Development — where support from the U.S. is obviously crucial. That’s not as huge a climb down as it initially seems: Paris could feasibly suspend the collection of digital tax payments due in April without scrapping the principle or the structure of its tax, as my Bloomberg News colleagues write elsewhere. But it still looks like Trump’s threats have paid off on one level.If the original sin is that today’s tech giants — Google parent Alphabet Inc., Facebook Inc., Amazon.com Inc. — aren’t paying their fair share in tax, we seem to be veering a long way from absolution. Things would be different if Europe could set aside its differences and agree on the fundamental good that a digital tax across its 28 members (soon to be 27) would bring. Brussels estimates global tech firms pay an average tax rate of 9.5%, compared with 23.2% for bricks-and-mortar peers. But the EU is divided on the need to overhaul the data economy, with low-tax jurisdictions like Ireland and the Netherlands resisting a common levy on digital firms.The Trump administration has shown itself adept at exploiting these divisions. France’s move to go it alone with a digital tax was politically popular, but fiscally weak. It is only expected to bring in 500 million euros ($555 million) a year, a digital drop in the ocean of France’s approximately 80 billion-euro deficit. Despite being fundamentally righteous, it allowed Trump to poke the soft underbelly of European unity by training his tariff weapon on Paris — and confronted the Macron administration with the prospect of pain for key exporters. The U.S. trade deficit with France was $16.2 billion in 2018.The pressure is now on to get consensus among more than 135 countries in the OECD-led push for an agreement on how to tax digital profits. It’s a solution favored by the likes of Apple Inc.’s Tim Cook, which speaks to how companies prefer the predictability of global solutions over patchy national ones. But until such a solution is actually agreed, it will be hard to celebrate this latest Franco-American “truce.” It has allowed France and Europe to save face by avoiding the reality of a new trade confrontation with Trump as he fights for re-election. It has offered tech firms a way to save money. But it hasn’t really saved the world from the threat of more trade wars. Davos can’t achieve everything.To contact the author of this story: Lionel Laurent at llaurent2@bloomberg.netTo contact the editor responsible for this story: Melissa Pozsgay at mpozsgay@bloomberg.netThis column does not necessarily reflect the opinion of Bloomberg LP and its owners.Lionel Laurent is a Bloomberg Opinion columnist covering Brussels. He previously worked at Reuters and Forbes.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Trump tells Davos that U.S. economic revival is ‘spectacular’

    Trump tells Davos that U.S. economic revival is ‘spectacular’

    President Donald Trump sought Tuesday to sell the United States to the global business community, telling an economic conference in the Swiss Alps that America’s economic turnaround has been “nothing short of spectacular.”