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Airbus CEO warns of significant impact from corruption probes

Fri Oct 06, 2017 11:00 pm

http://www.reuters.com/article/airbus-p ... SL8N1MH4AG says:

Airbus Chief Executive Tom Enders has warned staff of “turbulent and confusing times” amid French and UK anti-bribery and corruption investigations and urged them to support the aerospace group’s top management and the board.

It also warns that the investigations could lead to “significant penalties” for Airbus.

https://www.yahoo.com/news/airbus-bribe ... 45353.html says:

Meanwhile, news weekly Der Spiegel reported Friday without citing sources that prosecutors were "preparing charges" against unnamed suspects over the case.

"The assertion of Der Spiegel that a charge is being prepared and filed soon is not based on any declaration or disclosure by the public prosecutor," an Airbus spokesperson told AFP.

"Internal investigators stumbled across more than 100 possibly corrupt payments in the three-digit millions," the magazine reported citing anonymous sources.


Ominously, the last line reads:

And probes have been opened in France and Britain, on suspicion of corruption in Airbus' UK-based civil aviation arm.

Turbulent and confusing times, indeed!
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PlanesNTrains
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Re: Airbus CEO warns of significant impact from corruption probes

Fri Oct 06, 2017 11:02 pm

What is wrong with these companies? Geesh....
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Re: Airbus CEO warns of significant impact from corruption probes

Fri Oct 06, 2017 11:13 pm

FT ( https://www.ft.com/content/7a2304b8-aad ... 8314d2c72c ) addresses the "Airbus' UK-based civil aviation arm" issue:

Meanwhile, the company also faces an investigation in the UK and France over alleged bribery and corruption in its commercial aircraft business. A separate investigation is under way over a security contract struck by a subsidiary in Saudi Arabia.

The joint UK-French inquiry was launched after Airbus informed authorities about discrepancies in disclosures about the use of middlemen in deals.

On the Saudi contract, Airbus said in 2013 that its own investigation had found no evidence of wrongdoing.

And Reuters has a longer article ( http://www.reuters.com/article/us-airbu ... CB240?il=0 ) that says:

Britain’s Serious Fraud Office (SFO) launched a probe into the use of agents in commercial jet deals in 2016, followed this year by France’s fraud police.

The SFO acted after Airbus alerted UK authorities to inaccurate statements it had itself made over several years on the use of intermediaries in applications for support for jetliner exports.

Airbus has meanwhile launched a sweeping internal investigation in the hopes of obtaining a deferred prosecution agreement from the UK, which could lead to a costly settlement such as one Rolls-Royce (RR.L) agreed with UK authorities earlier this year.

The use of outside U.S. lawyers and robust questioning of staff has raised hackles inside the company and led to French media speculation of a backlash against German-born Enders.

It seems that this is the problem that Enders is trying to quash via the letter that has leaked today.

Interesting reporting (again) from Tim Hepher.
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Re: Airbus CEO warns of significant impact from corruption probes

Fri Oct 06, 2017 11:19 pm

The Guardian ( https://www.theguardian.com/business/20 ... ian-expose ) in September claimed it was the source of the investigation of Airbus UK, which seems to be contrary to what was written above:

Hundreds of pages of leaked bank records, internal memos and financial statements reveal that two companies secretly controlled by the aviation giant engaged in transactions involving €19m (£16.7m), a large part of which was then routed to a mysterious company via a tax haven.

Approached for an explanation, Airbus was unable to say who had received the money, or why its control of the two companies was concealed.

Hopefully this all gets sorted out rather quickly.
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Planeflyer
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Re: Airbus CEO warns of significant impact from corruption probes

Sat Oct 07, 2017 12:03 am

Jayafe, asserting that a competitor is violating wto rules is not a crime. Paying bribes is.

I don't the merits of either case but I applaud Enders for trying to clean up his shop. It's good business and the right thing to do
 
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Re: Airbus CEO warns of significant impact from corruption probes

Sat Oct 07, 2017 12:23 am

Nothing really new here. The use of middlemen or local agents is quite common in much of the world, especially in Africa and Asia. In places like Nigeria, it's the only was of conducting business. Usually involves gifting some expensive toys or money to stroke some officials' ego. All the OEMs including engine and defence contractors are playing this game.
 
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Re: Airbus CEO warns of significant impact from corruption probes

Sat Oct 07, 2017 12:38 am

Chaostheory wrote:
Nothing really new here. The use of middlemen or local agents is quite common in much of the world, especially in Africa and Asia. In places like Nigeria, it's the only was of conducting business. Usually involves gifting some expensive toys or money to stroke some officials' ego. All the OEMs including engine and defence contractors are playing this game.

At least three things seem new to me:

(a) Enders feels the situation warrants a letter to all employees about the potential impact of the corruption probes

(b) Airbus itself felt the things it discovered warranted informing authorities about discrepancies in disclosures about the use of middlemen in deals (so not a routine use of middlemen)

(c) Enders himself suggesting that the investigations could lead to “significant penalties” against Airbus (according to the later Reuters link)
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Re: Airbus CEO warns of significant impact from corruption probes

Sat Oct 07, 2017 12:50 am

Chaostheory wrote:
Nothing really new here. The use of middlemen or local agents is quite common in much of the world, especially in Africa and Asia. In places like Nigeria, it's the only was of conducting business. Usually involves gifting some expensive toys or money to stroke some officials' ego. All the OEMs including engine and defence contractors are playing this game.


Boeing and American defense companies do not use middlemen. They may use local consultants, but contracts and payments are made directly between contracting parties.
 
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Re: Airbus CEO warns of significant impact from corruption probes

Sat Oct 07, 2017 12:55 am

Personally, from what has been intimated in the French media over the last couple of years I would estimate that some people will go to jail from the multiple scandals waiting to be revealed.
 
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Re: Airbus CEO warns of significant impact from corruption probes

Sat Oct 07, 2017 1:41 am

So I am the first to mention Brexit and whether it plays any part in this issue?
Guess this will go to the ECJ and provide more ammo for the UK to remain within the EU when they leave the EU...
 
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Re: Airbus CEO warns of significant impact from corruption probes

Sat Oct 07, 2017 2:01 am

Seems like Airbus has been involved in a lot of investigations over the past few years, unless I’m just going crazy.
 
racercoup
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Re: Airbus CEO warns of significant impact from corruption probes

Sat Oct 07, 2017 2:28 am

Maybe John Leahy had good reason to retire........
 
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Re: Airbus CEO warns of significant impact from corruption probes

Sat Oct 07, 2017 2:37 am

Time for Leahy to take a victory lap and catch a N numbered Boeing back home to Brooklyn.
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Re: Airbus CEO warns of significant impact from corruption probes

Sat Oct 07, 2017 2:54 am

sxf24 wrote:
Chaostheory wrote:
Nothing really new here. The use of middlemen or local agents is quite common in much of the world, especially in Africa and Asia. In places like Nigeria, it's the only was of conducting business. Usually involves gifting some expensive toys or money to stroke some officials' ego. All the OEMs including engine and defence contractors are playing this game.


Boeing and American defense companies do not use middlemen. They may use local consultants, but contracts and payments are made directly between contracting parties.


Furthermore, the Foreign Corrupt Practices Act forbids the use of "consultants" or "middlemen" if the ultimate result is bribery of foreign government officials -- and not just monetary bribes but other forms of consideration. Boeing has been burned on this in the past.
 
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Re: Airbus CEO warns of significant impact from corruption probes

Sat Oct 07, 2017 3:20 am

Nothing unusual here. I don't really see how any western company that engaes in large quasi-government contracts in the developing world can avoid falling foul of these scenarios. For sure, today we may be all slamming Airbus, but next week it will be another. They are all at it.

This issue probably reaches its peak in the military-industrial world, but sometimes it suits those in charge to have a sacrificial lamb.

Cost of doing business and so long as shareholders go along with it, what we think does not matter
 
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Re: Airbus CEO warns of significant impact from corruption probes

Sat Oct 07, 2017 5:32 am

The most surprising thing about this, is that it is actually being investigated. Bribes, kick backs unfortunately are part are parcel of doing business in some areas of the world and the more high profile the business, the more these can cost. Some body must have missed out on their share and have pointed the authorities in the right direction as payback. The only real debate will be how widespread it is through out the company and the figures involved.

While these things happen in big (and small) business, it doesn't make them legal and perpetrators should be prosecuted wherever possible. Some deals just don't smell right from the outset and while this investigation will highlight instances at Airbus, I would doubt that Boeing is squeaky clean either.
 
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Re: Airbus CEO warns of significant impact from corruption probes

Sat Oct 07, 2017 9:57 am

It makes sense Airbus would want to have a DPA (Deferred Prosecution Agreement) encompassing all instances and pay a one off fine. RR paid £671M in theirs earlier this year. The fine represented corruption charges in 7 countries ( Indonesia, Thailand, India, Russia, Nigeria, China and Malaysia.) :white:
 
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Re: Airbus CEO warns of significant impact from corruption probes

Sat Oct 07, 2017 11:12 am

jupiter2 wrote:
The most surprising thing about this, is that it is actually being investigated. Bribes, kick backs unfortunately are part are parcel of doing business in some areas of the world and the more high profile the business, the more these can cost. Some body must have missed out on their share and have pointed the authorities in the right direction as payback.

You are pointing out one of the many reasons why bribes and kickbacks are illegal: they destabilize the market.

White collar crime will continue to go on while it's still seen as merely the cost of doing business. Jail time for the criminals would change that pretty quickly.

scotron11 wrote:
It makes sense Airbus would want to have a DPA (Deferred Prosecution Agreement) encompassing all instances and pay a one off fine. RR paid £671M in theirs earlier this year. The fine represented corruption charges in 7 countries ( Indonesia, Thailand, India, Russia, Nigeria, China and Malaysia.) :white:

That's quite a sum. It really did impact RR's result and put the CEO on the hot seat.

I think it's fair to assume Enders doesn't want to be on the same kind of hot seat.

However his letter suggests he knows there's a good chance he will be, and by writing the letter he wants to try to lower the temperature a bit before he may have to get on it.
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Re: Airbus CEO warns of significant impact from corruption probes

Sat Oct 07, 2017 5:16 pm

racercoup wrote:
Maybe John Leahy had good reason to retire........


Leahy is not even part of the story, the investigation is about middlemen who seem to be involved in suspicious transactions:

The joint UK-French inquiry was launched after Airbus informed authorities about discrepancies in disclosures about the use of middlemen in deals.

...

Hundreds of pages of leaked bank records, internal memos and financial statements reveal that two companies secretly controlled by the aviation giant engaged in transactions involving €19m (£16.7m), a large part of which was then routed to a mysterious company via a tax haven.

Approached for an explanation, Airbus was unable to say who had received the money, or why its control of the two companies was concealed.


Hence it was Airbus itself that informed the authorities about possible fraude.

mercure1 wrote:
Personally, from what has been intimated in the French media over the last couple of years I would estimate that some people will go to jail from the multiple scandals waiting to be revealed.


Good luck putting local agents in Nigeria behind bars, if they found to be guilty.
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Re: Airbus CEO warns of significant impact from corruption probes

Sat Oct 07, 2017 10:55 pm

This will probably go nowhere important. If evidence starts mounting up and it looks like there is a case, Airbus will just do as Rolls Royce did and seek to pay a no-fault charge to make it all go away.

It's what businesses do. Airlines have been similarly caught by antitrust regulators. Paying the penalty and letting it all remain on file without a conviction is a better solution than years of disruption and huge lawyers fees.

It all gets so murky when deals are done in dubious places. You either dance to the customers tune or you lose the sale. Saying Boeing (or Lockheed Martin, BAE, Northrop Grumman and the rest) are spotless is just utter cobblers. Every big company cuts corners now and again. Sometimes, like now, getting caught is inevitable.
 
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Re: Airbus CEO warns of significant impact from corruption probes

Sun Oct 08, 2017 11:28 am

S0Y wrote:
Nothing unusual here. I don't really see how any western company that engaes in large quasi-government contracts in the developing world can avoid falling foul of these scenarios. For sure, today we may be all slamming Airbus, but next week it will be another. They are all at it.

This issue probably reaches its peak in the military-industrial world, but sometimes it suits those in charge to have a sacrificial lamb.

Cost of doing business and so long as shareholders go along with it, what we think does not matter


The only worrying one is Austria right? That’s one where this kind of crap isn’t expected. Otherwise it’s a money penalty and a big who cares in my view.
 
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Re: Airbus CEO warns of significant impact from corruption probes

Sun Oct 08, 2017 2:02 pm

The attitude expressed by several posters asserting that bribes are just a normal cost of business gives us an idea on how prevelant this is in some quarters.

In many parts of the world where there are not transparent legal systems corruption is a significant drag on society. Africa and LA in particular will never fully develop due to poor protection of private property rights and the resulting corruption.

The BBC Has devoted considerable airtime covering the third world but has completely missed this story. Such a bad joke!
 
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Re: Airbus CEO warns of significant impact from corruption probes

Sun Oct 08, 2017 4:57 pm

I think it is high time this is done. Remember, the corruption around RollsRoyce, and Thai and AirAsia? People responsible need to go to jail.
 
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Enders and Airbus commercial division implicated in bribery scandal

Mon Oct 09, 2017 11:53 pm

New article in Der Spiegel: http://www.spiegel.de/international/bus ... 71533.html

I thought this was going to be a boring story but some of the details are very interesting, e.g. stealing the identities of two unknowing outsiders (one a lawyer, another a poor school employee) to set up accounts to launder millions of Euros between Airbus entities. Like something out of the movie Chinatown. It shows that Airbus (or at least EADS France) knew what they were doing was illegal.
 
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Re: Enders and Airbus commercial division implicated in bribery scandal

Tue Oct 10, 2017 12:05 am

that is an interesting read....... identity theft to move bribe money? yikes.
doesn't anyone just cleanly hand out a good, honest bribe anymore? sheesh.
 
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Re: Airbus CEO warns of significant impact from corruption probes

Tue Oct 10, 2017 1:21 am

Am I to understand that at least $114,000,000 bribes were paid between 2004 and the present?
 
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Re: Airbus CEO warns of significant impact from corruption probes

Tue Oct 10, 2017 2:29 am

KarelXWB wrote:
racercoup wrote:
Maybe John Leahy had good reason to retire........


Leahy is not even part of the story, the investigation is about middlemen who seem to be involved in suspicious transactions:

[quote]The joint UK-French inquiry was launched after Airbus informed authorities about discrepancies in disclosures about the use of middlemen in deals.

...
John Leahy is in this up to his neck.
 
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Re: Airbus CEO warns of significant impact from corruption probes

Tue Oct 10, 2017 3:26 am

KarelXWB wrote:
Leahy is not even part of the story, the investigation is about middlemen who seem to be involved in suspicious transactions


Leahy was the head of the sales department. If those things happened (who doubts it really...), then Leahy knew _EVERYTHING_ - period.

Having said that, there is simply no way for foreign companies to do business in certain areas of the world without bribing everyone and their mother. That's not an Airbus specific problem, it also goes for Boeing. When deals are struck in certain parts of the world, there is about a 0.1% chance that it happened without bribes. Airbus was just too stupid to hide it well enough.
 
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Re: Airbus CEO warns of significant impact from corruption probes

Tue Oct 10, 2017 6:37 am

I am 99% sure that this is a thing happening on both sides of the Atlantic. Corruption and bribing are so common in large and even small industry businesses.

I remember when SIEMENS was busted a few years ago in Germanys largest bribing/corruption scandal ever, that lots of managers testified at court saying that in 2nd and 3rd world country basically every deal can only be made when bribing the right persons. And the companies which are not allowed to take part in this "extra business" either continue doing it via 3rd persons employed as consultants or are out of business.

With saying that, I don't want to say that this is alright. Or that it does not happen in the first world. Just quoting it as a food for though. Personally I condemn all such illegal actions, by any company and from whereever they come from.

Revelation wrote:
Meanwhile, news weekly Der Spiegel reported Friday without citing sources that prosecutors were "preparing charges" against unnamed suspects over the case."The assertion of Der Spiegel that a charge is being prepared and filed soon is not based on any declaration or disclosure by the public prosecutor," an Airbus spokesperson told AFP."Internal investigators stumbled across more than 100 possibly corrupt payments in the three-digit millions," the magazine reported citing anonymous sources.
Ominously, the last line reads:
And probes have been opened in France and Britain, on suspicion of corruption in Airbus' UK-based civil aviation arm.
Turbulent and confusing times, indeed!


Not putting my hand in the fire for them, but I say if the "Der Spiegel" is reporting this and is telling that these things are facts, then these things are true. The Spiegel is the best investigative magazine we have in Germany. They covered up so many business and political scandals, as well as illegal deals, that these people can be trusted. Of course more or less the same can be said for The Guardian, Reuters or the FT.
 
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Re: Airbus CEO warns of significant impact from corruption probes

Tue Oct 10, 2017 10:14 am

racercoup wrote:
Maybe John Leahy had good reason to retire........


I would say that would be a very astute observation.
To know your Enemy, you must become your Enemy.” Sun Tzu
 
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Re: Enders and Airbus commercial division implicated in bribery scandal

Tue Oct 10, 2017 10:26 am

mzlin wrote:
New article in Der Spiegel: http://www.spiegel.de/international/bus ... 71533.html

I thought this was going to be a boring story but some of the details are very interesting, e.g. stealing the identities of two unknowing outsiders (one a lawyer, another a poor school employee) to set up accounts to launder millions of Euros between Airbus entities. Like something out of the movie Chinatown. It shows that Airbus (or at least EADS France) knew what they were doing was illegal.

If true that is likely why some people may be facing specific charges/jail time. Identity theft starts to move the situation into an area where an “I’m sorry” fine is not viewed as sufficient.
 
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Re: Enders and Airbus commercial division implicated in bribery scandal

Tue Oct 10, 2017 11:22 am

mzlin wrote:
New article in Der Spiegel: http://www.spiegel.de/international/bus ... 71533.html

I thought this was going to be a boring story but some of the details are very interesting, e.g. stealing the identities of two unknowing outsiders (one a lawyer, another a poor school employee) to set up accounts to launder millions of Euros between Airbus entities. Like something out of the movie Chinatown. It shows that Airbus (or at least EADS France) knew what they were doing was illegal.

Well, that's an amazing article.

A few fair use quotes:

First, with regard to Enders:

But even before the dubious company Vector was founded in London in 2004, there had been another company in Cyprus. It, too, is thought to have received a significant amount of money from EADS, apparently also to drum up business to boost the Austrian economy. That was the promise EADS made to Vienna in exchange for the Eurofighter order. And the predecessor company in Cyprus was also dubious. And who approved its founding according to the minutes of the relevant meeting? Tom Enders. And who received a long memo when Vector took over? Enders again. The same man who is currently posing as the anti-corruption superhero.

A major part of the article is that Enders himself in the past supported the creation and use of the dubious shell corporations. Yet in current times Enders seems to be positioning himself as the one who is cleaning things up and who must survive if the company itself is to survive. Meanwhile the fact that Enders is pointing the finger at the former Airbus sales office in Paris is making many insiders feel this is a German trying to suppress the French.

It seems to me that Ender's "turbulent and confusing times" phrase is a realization that he himself might find himself in the dock, despite his best efforts to save his skin.

Second, with regard to the expansive scope of the investigation:

It's a race that leads around the world. To places like Sri Lanka, where an investigation is currently being conducted into executives at the national airline SriLankan. The country's prime minister believes there were massive irregularities surrounding the purchase of 10 Airbus aircraft in 2013. Or in Mauritius, which bought six passenger jets. Here, the former head of government is believed to have been bribed. Or Tunisia, which bought 16 jets. It's suspected that 70 million euros went to a son-in-law of former President Ben Ali. Public prosecutors in France and Tunisia are investigating. Or in Kazakhstan, where there were apparently bribes in the sale of 45 helicopters. Or China: In 2013, an earlier agent for the company in China, a Turk, demanded a 700-million-euro commission for the sales of 160 Airbus aircraft worth $10 billion. The sum, 700 million, was so enormous that Airbus allowed the dispute to escalate, but the company ultimately had to conclude that the Paris sales division had made previously unknown commitments to the man. The company has since settled with the Turkish national. But it remains unclear whether everything was on the up-and-up. In Mali, the company even purchased shares in a goldmine.

If Airbus is indeed trying to "rip the scab off the wound" it's going to leave an ugly scar.

And thirdly, the nationalistic angle:

In one respect, though, the case of Airbus is even more explosive. After all, much of the company remains state-owned, with Germany and France together owning a 22 percent stake. That makes the case a political one -- and one that could affect the relationship between the two countries. The government in Berlin is eyeing Airbus nervously as the German and French executives in the company attack one another and hate, anger and distrust run rampant. Who knew what, when? Who cast blame at who? Who must now pay? Who will have power in the company when it's all over? The Germans? The French? The battle for truth has become a battle between two countries.

It will be interesting if this breaks out into open nationalistic warfare. In some regard, it seems inevitable. On the other hand, it'd seem that it'd benefit everyone to keep this squabble as contained as possible.

As I said earlier, turbulent and confusing times, indeed!
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Re: Airbus CEO warns of significant impact from corruption probes

Tue Oct 10, 2017 11:37 am

aviationaware wrote:
Leahy was the head of the sales department. If those things happened (who doubts it really...), then Leahy knew _EVERYTHING_ - period.


Not if people were bypassing him. Being head of a department doesn't mean other people cannot do illegal stuff behind your back.
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Polot
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Re: Airbus CEO warns of significant impact from corruption probes

Tue Oct 10, 2017 11:50 am

KarelXWB wrote:
aviationaware wrote:
Leahy was the head of the sales department. If those things happened (who doubts it really...), then Leahy knew _EVERYTHING_ - period.


Not if people were bypassing him. Being head of a department doesn't mean other people cannot do illegal stuff behind your back.

True, but that means you are doing a piss poor job controlling and leading your department (aka doing your job), especially if they are doing things behind your back involving sales and you NEVER learn about it. Doubly so if it is as rampant/widespread as Euro authorities fear.

That said Leahy is 67 years old. I suspect his retirement has more with him getting old and actually wanting to retire than this probe. Perhaps his desired retirement is the source of Airbus willing to be more open about the issue now. Get it all out of the way when the old guy is leaving rather than screw over Leahy’s replacement (and thus new momentum) and have his head ceremonially rolled as tribute to the authorities so soon after taking the job.
 
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Re: Airbus CEO warns of significant impact from corruption probes

Tue Oct 10, 2017 12:02 pm

I think Europe and rest of the world need to figure out how to handle these European gifts, which appear to be legal until an investigation starts. Just add contract clause, gifts given to middleman and journalists within EU borders is not illegal.
 
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Re: Airbus CEO warns of significant impact from corruption probes

Tue Oct 10, 2017 12:08 pm

This passage surprised me if true....
=======================
Because of the false data provided in export documents, Airbus is no longer able to obtain export guarantees in Britain, France or Germany.
 
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Re: Enders and Airbus commercial division implicated in bribery scandal

Tue Oct 10, 2017 12:11 pm

Revelation wrote:
Well, that's an amazing article.


It's a nice article, except for the nationalistic angle.

And thirdly, the nationalistic angle:
In one respect, though, the case of Airbus is even more explosive. After all, much of the company remains state-owned, with Germany and France together owning a 22 percent stake. That makes the case a political one -- and one that could affect the relationship between the two countries. The government in Berlin is eyeing Airbus nervously as the German and French executives in the company attack one another and hate, anger and distrust run rampant. Who knew what, when? Who cast blame at who? Who must now pay? Who will have power in the company when it's all over? The Germans? The French? The battle for truth has become a battle between two countries.



The author is mixing in some personal opinions and tries to create drama. Except maybe for an insider, I doubt anyone knows the real story between Germany and France.
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Re: Airbus CEO warns of significant impact from corruption probes

Tue Oct 10, 2017 12:19 pm

fcogafa wrote:
This passage surprised me if true....
=======================
Because of the false data provided in export documents, Airbus is no longer able to obtain export guarantees in Britain, France or Germany.

http://financial-dictionary.thefreedict ... +Guarantee defines this as:

Export Credit Guarantee
A guarantee of payment made by an export credit agency (ECA). ECAs are government or semi-government agencies that provide guarantees and insurance for exports, and occasionally for imports as well. An export credit guarantee ensures that an exporter receives payment for goods shipped overseas in the event the customer defaults, reducing the risk to the exporter's business and allowing it to keep its prices competitive.

So if I understand this correctly, Airbus is being denied these guarantees due to the falsification of data, and thus are taking on more risk that importers in certain countries may not pay for the products they've ordered.

KarelXWB wrote:
The author is mixing in some personal opinions and tries to create some drama.

How do you know this is personal opinion and is not actual reporting of what the reporter is being told by insiders?
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KarelXWB
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Re: Airbus CEO warns of significant impact from corruption probes

Tue Oct 10, 2017 12:28 pm

Polot wrote:
True, but that means you are doing a piss poor job controlling and leading your department (aka doing your job), especially if they are doing things behind your back involving sales and you NEVER learn about it. Doubly so if it is as rampant/widespread as Euro authorities fear.


He would not be the first in history.

That said Leahy is 67 years old. I suspect his retirement has more with him getting old and actually wanting to retire than this probe. Perhaps his desired retirement is the source of Airbus willing to be more open about the issue now. Get it all out of the way when the old guy is leaving rather than screw over Leahy’s replacement (and thus new momentum) and have his head ceremonially rolled as tribute to the authorities so soon after taking the job.


Well he did start talking about a possible retirement in 2017 or 2018 long before the investigation kicked off. Coincidence? Only time will tell.

The only thing we do know, is that Leahy's name hasn't been mentioned in all the articles we have been reading for he past few days, and Tom Enders is pointing fingers to the previous sales office in Paris. Leahy was located in Toulouse, so who knows what happened in Paris?
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Re: Airbus CEO warns of significant impact from corruption probes

Tue Oct 10, 2017 12:45 pm

This will hurt badly. No export guarantees makes selling planes in many countries very risky or difficult. If the investigation uncovers more this could threaten the survival of Airbus. Competitors will file claims for any contract won by Airbus using this illegal methods.
 
ap305
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Re: Airbus CEO warns of significant impact from corruption probes

Tue Oct 10, 2017 1:13 pm

Is the above mentioned publication not well known to be anti Airbus? As far as survival of Airbus goes, none of the governments involved is going to let it collapse given the magnitude of jobs involved as well as the potential of a Boeing monopoly...
 
Planeflyer
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Re: Airbus CEO warns of significant impact from corruption probes

Tue Oct 10, 2017 1:15 pm

Honest question; how are financial audits handled in Europe? Hiding $114mil is not easily done if the audit is thorough which leads me to believe this was not done by rogue parties w/i AB. Accounting and CFO types must have been involved or else the auditor was suborned. This could have an impact on the share price which could in turn lead to more legal action
 
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Re: Airbus CEO warns of significant impact from corruption probes

Tue Oct 10, 2017 1:21 pm

kiramakora wrote:
I think it is high time this is done. Remember, the corruption around RollsRoyce, and Thai and AirAsia? People responsible need to go to jail.


As long as that includes the recipients of said bribes too, otherwise it will achieve nothing.
 
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Re: Airbus CEO warns of significant impact from corruption probes

Tue Oct 10, 2017 1:24 pm

Virtual737 wrote:
kiramakora wrote:
I think it is high time this is done. Remember, the corruption around RollsRoyce, and Thai and AirAsia? People responsible need to go to jail.


As long as that includes the recipients of said bribes too, otherwise it will achieve nothing.


How would you want to achieve putting recipients in [for example] Thailand and Malaysia in jail?

Ain't gonna happen.
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SFOtoORD
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Re: Airbus CEO warns of significant impact from corruption probes

Tue Oct 10, 2017 1:29 pm

CARST wrote:
I am 99% sure that this is a thing happening on both sides of the Atlantic. Corruption and bribing are so common in large and even small industry businesses.


The argument that everyone must do this and that this is how business is done in certain parts of the world doesn’t hold water. Companies based in first world nations need to be held to a high standard. And if there is specific evidence against a particular company they need to be held accountable. This is how a first world economy needs to work.
 
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Re: Airbus CEO warns of significant impact from corruption probes

Tue Oct 10, 2017 1:35 pm

ap305 wrote:
As far as survival of Airbus goes, none of the governments involved is going to let it collapse given the magnitude of jobs involved as well as the potential of a Boeing monopoly...

Agree. Sacrificial lamb(s) will be found, possibly but not likely including Enders, and after the sacrifice it's back to business as usual, with some modification of business practices until a better way of hiding the bribes/kickbacks is found, unless of course another avenue is already in place.

The temptation is too great. Most risk falls to the corporation and not to the officers and/or employees. A new wave of execs will back fill those who get dumped, those new ones will be keen to make their killing and will be willing to ignore the risk. The only way it ends is with jail time. Unfortunately that isn't at all likely to happen. Same is true world wide.

Those who don't follow, take a look at who approved setting up the sham corporation in the first place. It was Enders, when he was younger and was more willing to take risks to fill up his retirement hoard. These days that hoard is full and his main goal is preserving it, so now he's contrite. Same as it ever was.

Planeflyer wrote:
Honest question; how are financial audits handled in Europe? Hiding $114mil is not easily done if the audit is thorough which leads me to believe this was not done by rogue parties w/i AB. Accounting and CFO types must have been involved or else the auditor was suborned. This could have an impact on the share price which could in turn lead to more legal action

The article tells us it is the current CFO who started the investigation that led to the alerting of the UK authorities.
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Re: Airbus CEO warns of significant impact from corruption probes

Tue Oct 10, 2017 1:50 pm

Revelation wrote:
How do you know this is personal opinion and is not actual reporting of what the reporter is being told by insiders?


The large use of question marks is a clear sign of speculation:

In one respect, though, the case of Airbus is even more explosive. After all, much of the company remains state-owned, with Germany and France together owning a 22 percent stake. That makes the case a political one -- and one that could affect the relationship between the two countries. The government in Berlin is eyeing Airbus nervously as the German and French executives in the company attack one another and hate, anger and distrust run rampant. Who knew what, when? Who cast blame at who? Who must now pay? Who will have power in the company when it's all over? The Germans? The French? The battle for truth has become a battle between two countries.


The author also mentions it could (i.e. one of many possibilities) affect the relationship between Germany and France, because after all (i.e. an assumption) a large part of the company is state-owned. Additionally, using words like "hate", "anger" and "battle" add to the suggestion of sensational journalism.

The nationalistic angle of the article is purely speculation at this point.
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wingman
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Re: Airbus CEO warns of significant impact from corruption probes

Tue Oct 10, 2017 2:00 pm

That really is a damning article. My view of it is that people are correct to say "these things happen everywhere" in that wheels in many countries (including even a straight-laced joint like Austria) must be greased to lube up a final contract. But it's HOW these things are done, which are done either legally within the strict confines of the written law, or outside outside of them. Let's face it, offset deals like the one done for Austria are barely concealed efforts to drive money to certain businesses, and therefore people, in order to win a contract. I guarantee that both Airbus and Boeing, and any other company doing business on the global stage, will ponder which businesses are worthy and which are run by the most influential people in equal measure. The conversation could be as simple as "Tom and John, we have three Austrian companies that make decent gas caps for the Typhoon but this one guy Gunther who owns Austrian Gas Cap GhB is the brother in law of the Minister for Jet Fighter Contracts, so we've sent a secret memo to the Paris Sales Office to wire $25M to his bank account in Guernsey as a down payment on 25 gas caps." I exaggerate but it probably looks something like this, and it's bribery, and it's legal.

But the stuff in this article is way beyond that and Leahy knew about it, though he might've been smart enough to not have his name recorded in meeting minutes. The guy ran sales for 20 years at Airbus so he surely must've known about the nature and purpose of the "Paris Sales Office", especially if it was doing things to help him secure commercial orders. Right now he's the greatest sales person that ever lived, but he may end up seriously tarnished once execs start ratting each other out. And what better scapegoat for France and Germany than some brash Yank from Brooklyn? This could get very nasty indeed.
 
racercoup
Posts: 394
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Re: Airbus CEO warns of significant impact from corruption probes

Tue Oct 10, 2017 2:03 pm

All those mega orders, airlines ordering more frames than their reasonable needs? After reading the article and what was going on the Amedeo deal falls in place.
 
Planeflyer
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Re: Airbus CEO warns of significant impact from corruption probes

Tue Oct 10, 2017 2:20 pm

Revelation, thanks for pointing out the role the current CFO played in revealing the corruption.

Telling that he was from the U.K.

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