Chapter 362: Win the A350 project!
There were extremely fierce roars in the office of the Airbus Chief Operating Officer, as if a very explosive argument was going on.
"This incident was caused by me. If they want to hold someone accountable, they should fire the presidents of the Spanish and German branches instead of just holding me responsible." Ronnie Covey's face flushed and he was extremely emotional.
In front of him, Chief Financial Officer Neo Otto also had a very gloomy expression on his face: "You don't have to doubt this. The presidents of the Spanish and German branches will all be fired. In addition, the chief engineers of the Spanish and German parts factories will also be fired. This time it's not just you. All the senior executives involved in this matter will be punished most severely."
Now, Ronnie Covein was completely speechless.
The presidents of Airbus Spain and Airbus Germany have the same management level as him, but their actual authority is higher than his. After all, they are provincial governors and are not subject to the constraints of the headquarters board of directors most of the time. However, as the chief operating officer of the headquarters, he has to look at the face of the board of directors all day long, which restricts his actions.
That's it, the presidents of Airbus Spain and Airbus Germany were not spared, it seems the board of directors has gone crazy this time.
However, this is normal. Since the incident was exposed, Airbus's stock has been plummeting. Airbus's capital chain was originally tight due to the excessive investment in the A380. Now that the A380 has been delayed for nearly a year, the capital chain is no longer tight, but is facing the risk of being broken.
If this situation happened ten years ago, when Airbus was still in its development stage, its situation was also quite bad, and it once needed subsidies from participating European countries to survive. But now it is different. Airbus is no longer a baby. If it dares to ask for subsidies from various countries, it will have a great impact on Airbus's reputation if it is exposed again.
Without the bottom-line subsidies from various governments, how can the Airbus board not be anxious? Boeing, across the ocean, just swallowed up McDonnell Douglas a few years ago, and they don't want to become the second McDonnell Douglas.
"Ronnie, you bear leadership responsibility for this matter, and it's impossible for you to clear yourself of it. However, the board of directors has not made a one-size-fits-all decision. Unlike the presidents of the Spanish and German branches who were fired, you can choose to stay at the headquarters, but your management level will be downgraded."
Ronnie Covey's eyelids twitched a few times: "Downgrade, downgrade to what?"
"Director." Neo Otto said in a deep voice, "Can you accept it?"
Ronnie Coveyne's mouth twitched. The management structure of Airbus headquarters is very complicated, but it can be roughly divided like this. In addition to the board of directors as the highest authority, the top management is the CEO, and below them are the executive vice presidents, such as Ronnie Coveyne's COO and Neo Otto's CFO.
In fact, sometimes the CEO is also called the president. For example, the top management of Airbus Spain and Airbus Germany is the president.
In theory, the management level of the presidents of Airbus Spain and Airbus Germany is higher than that of Ronnie Covein, the COO of the headquarters. However, because Ronnie Covein is at the headquarters, Airbus Spain and Airbus Germany are branches, and the management level of branches is at least half a level lower, so there is not much difference in the management level of the three.
Just talking about the management structure of Airbus headquarters, under the CEO is the executive vice president, under the executive vice president is the vice president, the vice president is divided into senior vice president and vice president, and below that are directors, which are also divided into two levels: senior director and director, and below that are department managers.
If Neo Otto's meaning was followed, Ronnie Covey would be directly demoted from being second to none to a lower level among the middle-level leaders. This gap was too big.
"Is there no hope?" Ronnie Covey asked in a low voice.
"No, this is still the best outcome." Neo Otto said firmly.
Ronnie Covey sat on the sofa with a blank look on his face. Neo Otto had a channel that made it easier for him to find out what the board of directors was thinking. Since he was so sure, there should be no doubt about it.
"Director... hehe..." Ronnie Covein had a miserable expression. He had put a lot of effort into winning the A380 project. However, this project did not become the key to his further advancement, but instead became his death warrant.
Neo Otto whispered, "There is no shortage of senior executives in major companies in the industry right now. If you want to leave, I'm afraid there is nowhere good to go, and your age..."
No matter which company you work for in the world, 35 is a threshold. There is no difference. For giant companies like Airbus, the average age of their employees is only 33. Of course, for management, the age limit is higher.
However, it is undeniable that if one is unwilling to be demoted, the older one is, the less popular one will be in the job market. This is especially true for Ronnie Covey, whose resume was tarnished by the A380 incident. This is an extremely obvious disadvantage.
How could Ronnie Covey not understand? That's why he was so frustrated. It seemed that he had no other way out except to accept relegation.
However, in the past, he had defeated many competitors during his climb. Although they were not as good as him before, they were at least vice presidents or senior directors. It was not easy for them to control an ordinary director like him.
This is no longer a matter of whether he is willing or not, but his future career as a director will be very, very miserable.
Ronnie Covein sat on the sofa in a daze, not saying a word. Neo Otto beside him didn't know how to persuade him, as he knew the board's determination and there was no possibility of change.
"Is there really no other way?" Obviously, Ronnie Covein still couldn't accept such a result. Even if there was just a little bit of hope, he still wanted to pursue it.
But Neo Otto just shook his head.
However, the next moment, a chuckle came from outside the door: "Mr. Covein, there is of course another way."
As the half-open door was pushed open, an elegant white old man walked in.
The old man's hair was completely white, but it was neatly combed. He wore a white turtleneck sweater inside and a dark gray windbreaker outside. Just standing there, he gave people the feeling of "this is a gentleman."
"Nicholas Halliway." The old man bowed gracefully and said, "CEO of Shengming Fund."
"Shengming Fund?" Neo Otto was stunned: "Is this Chinese pinyin?"
When referring to the name of the fund, the word Shengming is not a specific noun, but sounds more like a pinyin. Moreover, Neo Otto knows some Chinese, so this feeling is particularly strong.
Nicholas Halliway spread his hands and said with a smile: "This is the name given by our boss. To be honest, I don't really understand it, let alone its meaning."
"Shengming Fund, Shengming..." Neo Otto's five fingers on his right hand kept opening and closing: "Just now I received news from the stock department that a capital is buying a large number of our stocks, which temporarily stabilized our stock price..."
Nicholas Halliway lowered his head slightly: "You guessed right, Mr. Otto. You are as smart as your father."
"You know my father?" Neo Otto was a little surprised: "I have never heard my father mention you."
"Of course he won't mention me on his own initiative, but you can ask him." Nicholas Halliway laughed: "If I have nothing else to do today, I can talk to you about your father, but I have something else to do, so it's better to talk about business first."
Since he was his father's old friend, Neo Otto showed enough respect: "Mr. Hariway, what do you want to say about our stocks?"
"We are a for-profit financial fund. We have only one goal, which is to make money." Nicholas Halliway found a seat casually and sat down. He seemed very calm in front of the two Airbus executives.
Ronnie Covein frowned: "But I know a lot about famous international funds, but I've never heard of any famous fund."
At this time, Neo Otto lowered his head and whispered, "Ronnie, they bought $500 million of my stock in one go."
At this point, Ronnie Coveyne immediately stopped talking.
"Mr. Covein, just because you haven't heard of it doesn't mean it doesn't exist. It's just because you are not at that level yet." Nicholas Halliway snapped his fingers, his words full of arrogance, as if the Airbus COO was nothing more than that in his eyes.
Ronnie Covey was already very angry about his demotion, and when he heard Nicholas Halliway's ridicule, his anger rose even more. Fortunately, Neo Otto stopped him in time, otherwise a fight would have broken out on the spot.
"Mr. Harryway, can we get straight to the point in this situation?" Neo Otto said with a dry laugh.
Nicholas Halliway looked at Neo Otto with interest: "You are very different from your father, which is interesting. Straight to the point? Of course I can."
After a brief pause, Nicholas Halliway raised his eyebrows and said, "Given your current situation, $500 million is not enough to stabilize your stock price. I'm sure you know this."
Neo Otto nodded: "This...we know."
The issue of delayed A380 deliveries has not been resolved, and the $500 million rescue investment is not enough, so the stabilization of Airbus’s stock price at this moment is only temporary and will not last long.
"The A380 delivery delay is a fact, right? There is no room for change?"
Hearing Nicholas Halliway's question, Neo Otto and Ronnie Covein looked at each other, but no one answered.
Nicholas Halliway looked at the expressions of the two and laughed, "Why, are you still hiding it at this time? You don't have to tell me, but for me, it's just a matter of wasting a little time."
Neo Otto hesitated for a moment. This was indeed not something worth keeping secret. Not long ago, Airbus notified major airlines about the delayed delivery of the A380. Although in the notification document, Airbus repeatedly stated that the main reason for the delay of the A380 was the complexity of the aircraft itself and the customized requirements of various airlines.
However, there is no such thing as a wall without cracks. Besides, the A380 project has always been closely watched by many competitors, so how can it not attract attention now that the smell has come out?
Besides, the error in parts matching caused by software version is so dramatic that even Airbus itself is talking about it heatedly. How can this matter be covered up?
In fact, anyone who has some knowledge in the industry basically knows the true situation of the A380, and hiding it at this time would only make things more obvious.
"Mr. Hariwe, we have already communicated with all the major airlines, and there will be no major changes."
Neo Otto's words were rather tactful, but Nicholas Halliway didn't care: "Even if the root cause can't be changed, then the only way to stabilize it is to use a large amount of capital. Five hundred million dollars is not enough. You have a big hole this time."
Neo Otto's expression was a little embarrassed. In fact, an important reason for this predicament was Airbus itself.
Airbus's best-selling 320 series even crashed during test flights, but it still did not cause a big impact. This is because when the 320 series was released, Airbus was not yet in the spotlight, so if there was a problem, the impact was controllable.
Nowadays, Airbus is already a leader in civil aviation passenger aircraft. If there is any problem, the impact will naturally be different. What's more, Airbus has been too aggressive in promoting the A380.
Doing this is actually like an amplifier. Some advantages will be amplified a lot, but at the same time, there are some disadvantages that will also attract great attention, just like the delayed delivery this time.
In fact, many famous aircraft models have experienced delayed delivery, but the A380 is the only one that has been hit so hard this time.
Nicholas Halliway was right. The delay in delivery of the A380 has caused quite a big mess this time, otherwise so many executives would not have to be punished.
Seeing Neo Otto and Ronnie Coveyne's faces as dark as the bottom of a pot, Nicholas Halliway smiled and said, "I heard that you have seriously overspent on the R&D investment of the A380. Doesn't that mean you are short of funds?"
"Don't worry about this, Mr. Halliway." Ronnie Covey said coldly.
No matter when, a company's financial status needs to be kept confidential. This is equivalent to a person's trump card, which cannot be seen clearly by others.
"10 billion!" Nicholas Otto raised a finger: "We will use 10 billion US dollars to help you plug this hole."
"Ten billion!" Neo Otto's eyelids twitched. This Shengming Fund was too rich. Ten billion US dollars was the starting point. It was beyond description of wealth and power.
Ronnie Covein was also shocked. A promise of 10 billion dollars was just given up like that? This was too much. Could the money be printed?
Of course, if it is 10 billion US dollars, it will indeed be very helpful in stabilizing Airbus's stock price.
"Maybe I'm really ignorant, but taking out 10 billion US dollars at a time, this... is definitely a world-class financial fund, but I really haven't heard of it at all." Ronnie Covein looked at Neo Otto: "Neo, have you heard of it?"
Neo Otto shook his head: "No. Mr. Hariway, we are not questioning you intentionally, but a 10 billion dollar bailout must come with some conditions, right?"
"Of course, we are not doing charity. If we have paid, we will naturally seek rewards." Nicholas Halliway smiled and said, "It doesn't matter if you haven't heard of us. It doesn't matter if you choose to cooperate or not. In other words, you can borrow money from the bank to tide over the difficulties. However, judging from the performance of the stock market today, Airbus has not yet taken action to save itself. I am afraid that you don't have much money left. If the bank is willing to lend you more money, it is almost time to take action now. But, is it?"
The A380 incident is no small matter. A giant group like Airbus must have risk control agencies. If there were any signs of a stock price collapse, money should have been invested to stabilize the stock price, even if it meant borrowing money. But until Shengming Fund purchased a large number of Airbus shares, Airbus itself still did not take any major actions, which means that it really had no money.
Crazy overspending during the A380's development had exhausted the credit line that banks could extend to Airbus.
If we want to borrow money again, the banks themselves can no longer afford it.
Neo Otto is the chief financial officer of Airbus and has the best understanding of Airbus's financial situation. In the long run, Airbus's financial situation is actually not a big problem. Even though the A380 has a large overspending, thanks to the strong performance of the 320, Airbus would actually be quite comfortable if it hadn't been for this incident.
But there is no if in reality.
From a personal perspective, Neo Otto would like to receive $10 billion from the Shengming Foundation. The question is what the Shengming Foundation wants and what the conditions are. As Nicholas Halliway said, they are not doing charity, but businessmen who will not do anything without profit.
Neo Otto is worried that the Shengming Fund wants to exchange some core assets from Airbus.
This is what is called taking advantage of someone's misfortune.
Neo Otto pondered for a moment and said, "Mr. Hariway, if it is convenient, can you tell me the conditions of your funding?"
"Mr. Otto, although your character is more likable than your father's annoying stinginess and cunningness, you are still far behind your father in observing the situation."
Neil Otto was not angry about Nicholas Halliway's negative comments about his father, but humbly asked: "Mr. Halliway, is there any problem with my consultation with you?"
"Of course! " Nicholas Halliway said with a smile: "What's the point of asking? Do you have a choice?"
Neo Otto understood, but still responded calmly: "Although it is difficult to obtain support from banks now, it is not completely impossible. Moreover, when the time comes, we can obtain it from other channels."
"Do you mean government subsidies through other channels?" Nicholas Halliway chuckled and said, "If you still dare to ask for it now, it really opens my eyes."
When Airbus was just starting out, it was overwhelmed by Boeing, and it was normal for it to receive government subsidies for many years, just like a baby needs milk. However, it is not reasonable to drink milk when you are a young adult, especially when everyone around you knows that you are an adult.
However, when it comes to a life-and-death moment, life is always more important than face.
However, it seems that what Nicholas Halliway meant was not the question of whether or not one could drink milk, but the question of whether there was enough milk.
"If your hole is too big, then your value will be greatly reduced. In the beginning, governments did not subsidize you in order to clean up your mess in the future."
Neo Otto said coldly: "This is only a temporary difficulty. Our value is obvious to European countries. At certain critical moments, I believe they will help us."
"But what if the hole is beyond what they are willing to fill?" Nicholas Halliway laughed, "Do you think they will save you at the cost of damaging the domestic economy?"
At this time, Ronnie Covey was very dissatisfied: "I admit that the A380's mistake has dealt a heavy blow to us. However, Mr. Halliway, are you thinking too much about the irreparable loophole caused by this incident alone?"
Today is different from the past. Airbus is a giant comparable to Boeing, and its room for trial and error is much larger than many other companies.
Ronnie Covey does not think this will allow Airbus to get out of its life-or-death predicament, let alone make European countries unwilling to provide assistance.
Nicholas Halliway looked at Ronnie Covein with some pity: "You really don't know anything."
"What?" Ronnie Covey's forehead was bulging with veins, but he managed to hold it in this time. "Why, what's Mr. Halliway saying?"
“I can’t say anything profound, I just want to ask you, do you know anything about Boeing being shorted before?”
Neo Otto was stunned: "You mean a Boeing 737 was caused by damage to the fuselage?"
That’s right, this 737 is the aircraft with the flight number 1566, the Blue Sky Airlines aircraft with the problem of the elevator sensor and centering device.
The problem of the elevator centering device caused the elevator to exceed the pilot's input when the pilot pushed and pulled the stick normally. It was for this reason that the plane scraped the tail during a takeoff.
After takeoff, due to the effect of the pressurization system, the huge pressure difference acted on the damaged part of the tail and caused the fuselage to rupture.
However, the fuselage does not generate lift, so compared to the broken wing, the damage to the fuselage has little effect on the loss of lift. The real problem was that the plane was stuck in a very high pitch attitude, and in the end Xu Cang completed the landing in an inverted flying posture.
This incident did not cause much sensation at the time, but suddenly one day not long after, the matter fermented and began to cause people to question the strength of the 737 fuselage.
This incident caused Boeing's stock price to suffer a great loss. In order to solve this matter, Boeing even found Xu Cang and wanted to buy 1566 FDR from Xu Cang at a high price. However, Xu Cang did not make this transaction at that time, but changed the conditions instead, thus obtaining the genuine authorization of some Boeing aviation materials.
This incident is famous because it was an obvious short-selling event.
From a technical perspective, the 1566 incident cannot prove that there is really any major problem with the 737. However, due to the hype of one or more secret forces, it has triggered widespread doubts about the strength of the 737 fuselage.
The 737 is Boeing's flagship product, and it cannot have any problems. At that time, Boeing also took a lot of trouble to solve this problem.
However, even though things were finally settled, there was still no sign of the capital force that shorted Boeing.
However, what is certain is that the capital is very strong. It is incredible that Boeing was made extremely uncomfortable just by relying on the 1566 incident.
It is interesting that Nicholas Halliway brings this up again today.
Neo Otto responded quickly: "Is it you?"
However, Nicholas Halliway did not directly answer Neo Otto's question, but chuckled and said, "You can choose not to cooperate with us, but the 10 billion US dollars will definitely be spent. Of course, this money will not be used to stabilize your stock price, but to go through what happened to Boeing. However, compared to the handle on Boeing, your case this time seems to be easier to handle."
Hearing this, Ronnie Covey was horrified: "You are the ones who shorted Boeing! This... this is crazy. No, you have already invested $500 million. If our stock price collapses, won't your $500 million be wasted?"
"Compared to the profits we will get after your fall, the $500 million is nothing." Nicholas Halliway looked at Ronnie Covey calmly, "Besides, Boeing should be very willing to cooperate with us."
"But, you were the ones who stabbed Boeing in the back. Aren't you afraid that we will tell Boeing?"
Nicholas Halliway raised his finger and said, "Mr. Covein, I advise you not to do this. You are losing your only chance to make a comeback. Of course, if Mr. Covein is really that stupid, that's fine. Compared to the importance of killing you, Boeing will let go of some of the past grudges."
"But you finally stopped, didn't you?" Neo Otto said solemnly, "That is to say, you didn't actually act that strong."
During the period when Boeing was shorted, even though Boeing finally produced data on the 1566 aircraft flying upside down with the fuselage damaged, the actual effect was not as good as expected. However, for some reason, the forces that originally shorted Boeing stopped without warning, which is puzzling.
However, in Neo Otto's view, this is a reflection of the lack of strength of Shengming Fund.
However, Nicholas Halliway laughed out loud: "Do you think so? But this is normal. Boeing was obviously losing ground at that time, so why did they let them go in the end? Yeah, I don't really understand it either."
Neo Otto frowned: "What?"
"Because our boss decided to let Boeing off the hook at the last minute." Nicholas Otto shrugged. "It's that simple, although I still don't understand why."
Neo Otto's eyes suddenly widened: "Who is your boss?"
"This is not your concern." Nicholas Halliway seemed a little impatient: "I have said enough. Given your condition, you have too many questions."
Neo Otto paced back and forth in the office. Some things were indeed difficult to decide. Finally, he made up his mind: "Mr. Harvey, no matter if it is useful or not, or if there is no choice, I still want to hear your terms."
Nicholas Halliway took off his hat and said, "Since you are so curious, it's okay to tell me. We will entrust you, Airbus, to design and manufacture, and release a wide-body aircraft in the name of Airbus. You don't have to pay back the $10 billion in the future, just treat it as the R&D investment for that aircraft. Of course, as a partner and brand provider, you can get 40% of all the profits of that model."
"What!" Neo Otto had imagined many possible conditions, but he never expected it to be this: "Mr. Hariway, do you mean to use our brand and the requirements framework you provide to let us design and manufacture a new wide-body aircraft?"
Nicholas Halliway smiled and said, "Yes, that's what I mean."
Not to mention Neo Otto, Ronnie Covein was also a little speechless: "Aren't you a fund manager? How did you get involved in the physical industry of aircraft?"
Shouldn't financial funds use some capital means?
How can there be people who personally engage in industrial business, even if it is a commissioned product? This is too outrageous.
"Of course we made money." Nicholas Halliway had a smile on his face all the time. "However, there is one thing I need to correct you. Although we are the investor of this project, we are not the main partner with you."
Neo Otto was stunned: "What do you mean, you only care about the initial investment, and someone else makes the money?"
My goodness, what a business genius this is!
I invest the money and let others make money?
Nicholas Halliway smacked his lips. “Although it’s a little unbelievable, it’s like this.”
Ronnie Covein laughed at what he heard: "The end of running a fund is to do business and give it away for free. It's really... You said it so confidently, have you thought of a name for the new plane?"
"Bingo!" Nicholas Halliway snapped his fingers again: "I've definitely thought of a name."
This time, Ronnie Covey was really stunned. He thought Nicholas Halliway was just joking, but he didn't expect it to be true.
He asked tentatively, "Wh...what?"
Nicholas Halliway thought for a moment and said, "It seems to be called... A350."
"A350." Ronnie Covey chewed on the model. "Is this a four-engine wide-body aircraft?"
"No!" Nicholas Halliway shook his head: "It's a twin-engine wide-body aircraft."
Ronnie Coveyne looked a little strange. Looking at Nicholas Halliway, it seemed that he was really considering this matter seriously.
If it is a twin-engine wide-body aircraft, it is not like the A380 or B737, but more like the A330. However, these words coming from the manager of a financial fund are really weird.
After exchanging a glance with Neo Otto, Ronnie Covein asked the next question: "Who is the ultimate beneficiary?"
Nicholas Halliway said without any pause this time: "Perhaps you are familiar with him. That person is called...Xu Cang!"
