GKN buys Airbus wings plant in Britain
British engineering company GKN Plc agreed to buy a wing-component and assembly plant at Filton in Britain from plane maker Airbus for £136 million ($239.4 million), the companies said on Monday.
The deal, which follows almost a year of negotiations, calls for GKN to invest another £125 million into the plant over five years to help pay for costly lightweight materials needed for the A350XWB, Airbus’s next model due next decade.
The Filton unit being sold employs 1,500 workers or about a quarter of the total Airbus workforce in the area. The rest of the Filton site near Bristol, where the Anglo-French Concorde was partly developed and produced in the 1960s, will continue to design wings for EADS unit Airbus.
The deal is part of Airbus’s efforts to attract outside investment to its plants to help share the A350’s €10 billion development cost. Industry officials said the British government was expected to pump £60 million into the venture to help with its launch plus £50 million in research and technology aid. In 2009, the outsourced Filton operation will have revenues of some €375 million and will boosting earnings per share and generating cash for its new owner, GKN said.
The Filton sale comes as Boeing workers in the United States remain on strike over a contract dispute and union fears of more outsourcing in an increasingly global aerospace industry. The strike, which has halted all Boeing airplane production and may further delay the maiden flight of the new 787 Dreamliner, entered its tenth day on Monday. Airbus meanwhile denied a report it was facing more delays on its A380 superjumbo, which entered service last year.
Selling Filton was originally part of a broader Airbus plan to sell up to seven European aerostructure plants in return for investment to make the A350XWB lighter and more fuel-efficient than current aircraft, matching the hot-selling 787. The two planes are competing in the lucrative market for mid-sized twin-jets capable of long range while saving fuel.
But talks to sell two Airbus airframe plants in France and three in Germany broke down in the summer when financing dried up during the global credit crisis. Airbus says it will spin off the unsold French and German plants to new subsidiaries and sell them when markets improve. In a deal seen as separate from the effort to fund a next-generation airframe for the A350, Airbus recently sold a German cabin interiors plant at Laupheim to Germany’s Diehl and Thales of France. The plants are set to be transferred to the two buyers on Oct. 1. (Reuters)
SUPPORT THE BUDAPEST BUSINESS JOURNAL
Producing journalism that is worthy of the name is a costly business. For 27 years, the publishers, editors and reporters of the Budapest Business Journal have striven to bring you business news that works, information that you can trust, that is factual, accurate and presented without fear or favor.
Newspaper organizations across the globe have struggled to find a business model that allows them to continue to excel, without compromising their ability to perform. Most recently, some have experimented with the idea of involving their most important stakeholders, their readers.
We would like to offer that same opportunity to our readers. We would like to invite you to help us deliver the quality business journalism you require. Hit our Support the BBJ button and you can choose the how much and how often you send us your contributions.