Leaders of Europe’s aerospace industry met with the president of the European Central Bank (ECB) at its Frankfurt headquarters on July 10 to express their “deep concern regarding the impact on their industry of the rapid and extreme fluctuation of the U.S. dollar compared to the euro,” according to the AeroSpace and Defense Industries Association of Europe (ASD).
The euro hit fresh highs against the dollar in April and has eased little since (it now equals $1.58) because, while the U.S. and UK have headed toward recession and the U.S. has slashed interest rates, the ECB has held rates steady to hedge against inflation worries.
EADS started to air its concerns more loudly a year ago (when the rate was $1.37), as it grappled with restructuring, warning of the risk of an exodus of European export industries and resulting job losses, which would set the industry on a collision course with the unions.
At the Frankfurt meeting the industry case was presented by Louis Gallois, chairman and CEO of EADS; Rainer Ott, president of the corporate board of Diehl Aerosystems; and Francois Gayet, the ASD’s secretary general. The ECB was represented by its president, Jean-Claude Trichet, and executive board member Lorenzo Bini Smaghi. ASD has 30 member associations in 20 countries representing some 2,000 large companies and 80,000 smaller suppliers. Industry turnover totals e120 billion.
Gallois has commented that for every dollar fall of ten cents against the euro, Airbus feels a bottomline impact of $1 billion.