WEBVTT - Guillaume Faury, Airbus CEO Talks Demand, Tariffs Impact, European Defense

0:00:02.320 --> 0:00:06.680
<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news.

0:00:06.880 --> 0:00:07.600
<v Speaker 2>Good morning, Lizzie.

0:00:07.640 --> 0:00:09.480
<v Speaker 1>Yeah, let's just set the scene.

0:00:09.440 --> 0:00:12.160
<v Speaker 2>As we start the Paris Show this year. As you say,

0:00:12.200 --> 0:00:14.480
<v Speaker 2>it is likely to be affected by a number of

0:00:14.480 --> 0:00:16.720
<v Speaker 2>external factors. The most obvious one, of course, is what

0:00:16.760 --> 0:00:19.600
<v Speaker 2>has just happened in India. That means that the CEO

0:00:19.760 --> 0:00:22.680
<v Speaker 2>Boeing is not going to be here. It obviously casts

0:00:22.680 --> 0:00:25.440
<v Speaker 2>a very long shadow over events at the show. You've

0:00:25.480 --> 0:00:27.040
<v Speaker 2>also got the conflict in the Middle East as well,

0:00:27.040 --> 0:00:28.720
<v Speaker 2>and that's going to cast a long shadow as well.

0:00:28.920 --> 0:00:30.840
<v Speaker 2>Maybe some of the news, some of the some of

0:00:30.880 --> 0:00:32.760
<v Speaker 2>the news, some of the announcements that we were expecting

0:00:32.760 --> 0:00:35.520
<v Speaker 2>coming from the show may not appear, may get pushed

0:00:35.560 --> 0:00:37.600
<v Speaker 2>a little bit to the right, maybe coming a little

0:00:37.600 --> 0:00:40.600
<v Speaker 2>bit later. So there's a number of factors that are

0:00:41.080 --> 0:00:43.760
<v Speaker 2>impacting the show that are obvious, but there's a number

0:00:43.760 --> 0:00:45.919
<v Speaker 2>of factors that are still impacting. What is happening within

0:00:46.000 --> 0:00:49.360
<v Speaker 2>airspace more broadly that has maybe slightly longer in duration.

0:00:49.640 --> 0:00:52.240
<v Speaker 2>There's still a supply chain problem. We're still worrying about

0:00:52.280 --> 0:00:54.680
<v Speaker 2>what is happening with the Tarist store. We don't understand

0:00:54.760 --> 0:00:57.880
<v Speaker 2>yet what the visibility around that all looks like. And

0:00:57.960 --> 0:01:00.480
<v Speaker 2>there's also the factor of the dollar as well. The

0:01:00.520 --> 0:01:02.680
<v Speaker 2>depreciating dollar is something you need to bear in mind.

0:01:03.000 --> 0:01:05.800
<v Speaker 2>When an industry prices most of its products in dollars

0:01:05.840 --> 0:01:07.959
<v Speaker 2>and you see a significant change, that is a factor.

0:01:08.120 --> 0:01:10.480
<v Speaker 2>So there's a lot to talk to Gillon Fouri about.

0:01:10.520 --> 0:01:13.640
<v Speaker 2>He is, of course the president of GIFAS these French

0:01:13.760 --> 0:01:17.160
<v Speaker 2>Aerospace Association. He's hosting this event. He is, of course

0:01:17.160 --> 0:01:20.120
<v Speaker 2>as well the CEO of air Bus.

0:01:20.120 --> 0:01:21.360
<v Speaker 1>Good morning, Good morning.

0:01:21.560 --> 0:01:23.000
<v Speaker 2>Is it going to be a quiet show that there's

0:01:23.040 --> 0:01:24.800
<v Speaker 2>so many things going on at the moment? Does that

0:01:24.840 --> 0:01:26.760
<v Speaker 2>put a little bit of a cloud over what's going

0:01:26.800 --> 0:01:27.319
<v Speaker 2>to happen here?

0:01:27.360 --> 0:01:30.840
<v Speaker 3>I think the accident last week obviously was a very

0:01:30.880 --> 0:01:34.200
<v Speaker 3>targic event. We're all working hard in this industry for

0:01:34.319 --> 0:01:37.360
<v Speaker 3>these not to happen, or when it happens, it's a

0:01:37.360 --> 0:01:40.880
<v Speaker 3>big setback. But yes, we have a slow start indus show,

0:01:41.319 --> 0:01:43.240
<v Speaker 3>but I think it will be a good show, as

0:01:43.280 --> 0:01:46.600
<v Speaker 3>you rightly say that, plenty of uncertainties and difficulties, but

0:01:46.640 --> 0:01:50.320
<v Speaker 3>alsow some mega trends, more and more people traveling, very

0:01:50.320 --> 0:01:53.360
<v Speaker 3>strong demon for air travel and the lot of activity

0:01:53.360 --> 0:01:54.040
<v Speaker 3>for our industry.

0:01:54.640 --> 0:01:55.640
<v Speaker 1>You talk about the uncertainty.

0:01:55.680 --> 0:01:57.600
<v Speaker 2>Thomas, your CFO, was saying the other day, I think

0:01:57.600 --> 0:02:00.120
<v Speaker 2>it was on Friday, talking about the idea that maybe

0:02:00.920 --> 0:02:03.280
<v Speaker 2>there isn't the visibility on buybacks right now because of

0:02:03.320 --> 0:02:05.960
<v Speaker 2>the uncertainty that exists right now within the industry. How

0:02:06.000 --> 0:02:08.600
<v Speaker 2>much uncertainty is that? How much visibility do you have?

0:02:08.680 --> 0:02:11.240
<v Speaker 2>How confidence are you in the targets you're setting yourself

0:02:11.320 --> 0:02:11.720
<v Speaker 2>right now?

0:02:11.840 --> 0:02:14.520
<v Speaker 3>Well, we have plenty of contradictions to manage. We have

0:02:14.560 --> 0:02:18.839
<v Speaker 3>a very strong backlog of sign contracts, customers expecting those

0:02:18.840 --> 0:02:22.000
<v Speaker 3>aircraft to be delivered, so we have pressure on deliveries.

0:02:22.040 --> 0:02:25.560
<v Speaker 3>We have a challenging situation for supply chain coming out

0:02:25.600 --> 0:02:28.600
<v Speaker 3>of COVID now with the uncertainties on trade and also

0:02:28.639 --> 0:02:29.959
<v Speaker 3>on conflicts around the world.

0:02:30.840 --> 0:02:31.960
<v Speaker 1>So we're pushing hard to.

0:02:31.919 --> 0:02:35.200
<v Speaker 3>Be able to fulfill our obligations to our customers.

0:02:35.440 --> 0:02:38.839
<v Speaker 1>They count on us. But it's a certain world, so

0:02:39.480 --> 0:02:42.519
<v Speaker 1>we have also to getting more and certain less.

0:02:43.160 --> 0:02:46.080
<v Speaker 3>I think it's a contradiction. It's full of contradictions. Mega

0:02:46.160 --> 0:02:50.520
<v Speaker 3>trends are there. Demand for air travel is there. That's

0:02:50.560 --> 0:02:53.760
<v Speaker 3>the fact it's growing, so we have to serve that demand.

0:02:54.000 --> 0:02:56.160
<v Speaker 3>But on the other hand, is on the short term

0:02:56.520 --> 0:02:59.880
<v Speaker 3>on the supply chain management on the way conflicts are

0:02:59.880 --> 0:03:04.160
<v Speaker 3>in impacting the supply chain and our ability to do business.

0:03:04.440 --> 0:03:07.680
<v Speaker 3>It's becoming more challenging. So there's probably more difficulties to

0:03:07.720 --> 0:03:11.200
<v Speaker 3>do business, but the reasons, the fundamentals of business are

0:03:11.280 --> 0:03:11.760
<v Speaker 3>very strong.

0:03:12.960 --> 0:03:14.919
<v Speaker 1>What are the challenges right now? What do you not

0:03:15.000 --> 0:03:15.480
<v Speaker 1>have enough of?

0:03:15.680 --> 0:03:17.280
<v Speaker 2>I will talked to the past, like engines, you don't

0:03:17.320 --> 0:03:21.160
<v Speaker 2>have enough about seats toilets. Where is it right now

0:03:21.160 --> 0:03:22.680
<v Speaker 2>that you're facing the challenges right?

0:03:22.960 --> 0:03:26.080
<v Speaker 3>I mean the uncertainties that are weighing on us are trade.

0:03:26.320 --> 0:03:27.440
<v Speaker 3>Obviously tariffs.

0:03:27.600 --> 0:03:29.600
<v Speaker 1>What is the next steps?

0:03:29.639 --> 0:03:36.240
<v Speaker 3>What is going to happen with tariffs going down, escalating, escalating?

0:03:36.440 --> 0:03:36.960
<v Speaker 2>We don't know.

0:03:37.040 --> 0:03:38.880
<v Speaker 1>So we have to make different scenarios. What do you

0:03:38.880 --> 0:03:39.680
<v Speaker 1>think is going to happen?

0:03:39.960 --> 0:03:42.320
<v Speaker 3>We have to make different scenarios and be resilient to

0:03:42.360 --> 0:03:45.360
<v Speaker 3>different scenarios. It's not about thinking, it's about preparing, It's

0:03:45.360 --> 0:03:48.480
<v Speaker 3>about being resilient. That's the world we're living in. Then

0:03:48.520 --> 0:03:51.720
<v Speaker 3>you have the security conflicts around the world which are

0:03:51.760 --> 0:03:55.160
<v Speaker 3>impacting ability to fly over certain zones.

0:03:55.640 --> 0:03:57.120
<v Speaker 1>That's difficult for airlines.

0:03:57.400 --> 0:04:00.560
<v Speaker 3>That is impacting the willingness of some areas of the

0:04:00.560 --> 0:04:03.080
<v Speaker 3>world to travel to other areas of the world. Then

0:04:03.120 --> 0:04:06.400
<v Speaker 3>you have the US China tensions which are not helping.

0:04:06.640 --> 0:04:09.080
<v Speaker 3>So when it comes to our supply chain, a lot

0:04:09.160 --> 0:04:11.880
<v Speaker 3>of things have improved, especially compared to last year. We

0:04:11.920 --> 0:04:15.000
<v Speaker 3>have by far less critical issues, but the remaining ones

0:04:15.040 --> 0:04:17.479
<v Speaker 3>are big ones. As you know, on the single line,

0:04:18.000 --> 0:04:21.359
<v Speaker 3>we have gliders so wening, we have airplanes fully ready

0:04:21.400 --> 0:04:24.799
<v Speaker 3>to be delivered without engines. We have an engine crisis

0:04:24.839 --> 0:04:28.119
<v Speaker 3>on our single aircraft and that's really what we're trying

0:04:28.120 --> 0:04:31.240
<v Speaker 3>to solve with our friends from CFM.

0:04:31.760 --> 0:04:34.640
<v Speaker 2>Boeing has a new head of sales. Okay, his name

0:04:34.680 --> 0:04:37.040
<v Speaker 2>is Donald Trump. He's the President of the United States,

0:04:37.160 --> 0:04:39.240
<v Speaker 2>and it seems as if the message coming at the

0:04:39.240 --> 0:04:42.039
<v Speaker 2>moment is you order a bunch of Boeing airplanes, you

0:04:42.080 --> 0:04:44.520
<v Speaker 2>are going to get a better trade deal. Where's the

0:04:44.600 --> 0:04:48.279
<v Speaker 2>muscle in Europe? Where's the political backing? The Prime Minister

0:04:48.360 --> 0:04:49.560
<v Speaker 2>is going to be here a little bit later on

0:04:49.600 --> 0:04:53.200
<v Speaker 2>today you're going to be greeting. Where's the political muscle

0:04:54.400 --> 0:04:58.600
<v Speaker 2>that you need to be able to do to compete

0:04:58.600 --> 0:05:00.680
<v Speaker 2>with what is happening with buying and the President of

0:05:00.680 --> 0:05:01.840
<v Speaker 2>the United States.

0:05:02.040 --> 0:05:05.760
<v Speaker 3>Right, we like the power of our products at ebers.

0:05:05.800 --> 0:05:10.919
<v Speaker 3>We are passionate about techniques about supporting what our customers

0:05:11.000 --> 0:05:14.400
<v Speaker 3>need with the product, the right customer support as well,

0:05:15.080 --> 0:05:16.919
<v Speaker 3>and we have a saw a good.

0:05:16.960 --> 0:05:18.520
<v Speaker 1>Sense guy at EBBS for every.

0:05:18.440 --> 0:05:23.040
<v Speaker 3>Less known than Trump from the public, but well known

0:05:23.080 --> 0:05:25.200
<v Speaker 3>in the industry. So we are trying to promote our

0:05:25.200 --> 0:05:26.560
<v Speaker 3>products on their own merits.

0:05:26.720 --> 0:05:28.599
<v Speaker 2>But do you need political backing? Is that what this

0:05:28.680 --> 0:05:29.880
<v Speaker 2>is going to come down? So it feels like an

0:05:29.920 --> 0:05:33.839
<v Speaker 2>increasingly political story, less about product, more about politics.

0:05:34.200 --> 0:05:36.320
<v Speaker 1>It plays a big role. Politics plays a big role.

0:05:36.839 --> 0:05:40.240
<v Speaker 3>But so we have to be even better and that's

0:05:40.240 --> 0:05:44.040
<v Speaker 3>what we're trying to achieve with our products again, making

0:05:44.240 --> 0:05:47.720
<v Speaker 3>sure that customers select airbus planes on the merits of

0:05:47.760 --> 0:05:48.240
<v Speaker 3>the planes.

0:05:49.400 --> 0:05:51.440
<v Speaker 2>As I say, you are the president of gifas as well.

0:05:51.960 --> 0:05:53.599
<v Speaker 2>Let's talk a little bit about kind of what is

0:05:53.600 --> 0:05:55.320
<v Speaker 2>happening here in Europe. I've talked to you in the

0:05:55.360 --> 0:05:56.800
<v Speaker 2>past about the idea that we need a kind of

0:05:56.839 --> 0:05:59.280
<v Speaker 2>airbus of defense. We need consolidation. We're going to see

0:05:59.279 --> 0:06:02.039
<v Speaker 2>some consolidation be in the space industry. Talk to me

0:06:02.720 --> 0:06:04.520
<v Speaker 2>when the Prime Minister comes, when the President comes, when

0:06:04.520 --> 0:06:07.159
<v Speaker 2>he comes back from the G seven Again, what is

0:06:07.200 --> 0:06:09.520
<v Speaker 2>the message here in terms of what needs to happen

0:06:09.560 --> 0:06:12.320
<v Speaker 2>in Europe on the defense side, and do you believe.

0:06:12.120 --> 0:06:13.560
<v Speaker 1>That the budgets are there.

0:06:13.880 --> 0:06:16.799
<v Speaker 2>The deficits in Europe apart from Germany are enormous right now.

0:06:16.960 --> 0:06:19.039
<v Speaker 2>Can Europe afford to rearm in the way that it

0:06:19.120 --> 0:06:22.799
<v Speaker 2>needs to to deliver the kind of defense industrial complex

0:06:22.839 --> 0:06:24.440
<v Speaker 2>that it needs to deliver if it wants to defend

0:06:24.440 --> 0:06:25.200
<v Speaker 2>itself right now?

0:06:25.560 --> 0:06:28.520
<v Speaker 3>I think Europe has understood and most of the large

0:06:28.520 --> 0:06:31.159
<v Speaker 3>countries of Europe that they need to step up in defense,

0:06:31.320 --> 0:06:33.800
<v Speaker 3>that Europe needs to take care of its own security,

0:06:34.480 --> 0:06:36.719
<v Speaker 3>and that they will be in the future. They will

0:06:36.720 --> 0:06:39.800
<v Speaker 3>get less support from the United States because the US

0:06:39.839 --> 0:06:43.200
<v Speaker 3>have made clear that Europe has to take care of

0:06:43.240 --> 0:06:46.400
<v Speaker 3>their own security and we have security issues at the

0:06:46.480 --> 0:06:47.800
<v Speaker 3>border of Europe.

0:06:47.760 --> 0:06:49.720
<v Speaker 1>With Ukrain and Russia.

0:06:50.400 --> 0:06:53.839
<v Speaker 3>So I am convinced that the countries of Europe know

0:06:54.120 --> 0:06:56.479
<v Speaker 3>that they have to step up. They will put more money,

0:06:56.960 --> 0:06:58.840
<v Speaker 3>they will spend more money in Europe.

0:06:58.880 --> 0:07:00.479
<v Speaker 2>You think the money is there conflict The.

0:07:00.480 --> 0:07:01.360
<v Speaker 1>Money will be coming.

0:07:01.440 --> 0:07:04.800
<v Speaker 3>We see, we see the early signs, but very strong

0:07:04.839 --> 0:07:07.719
<v Speaker 3>and clear signals that the money will be coming. That

0:07:07.760 --> 0:07:10.920
<v Speaker 3>the budgets are increasing, so probably not as fast as

0:07:11.480 --> 0:07:12.960
<v Speaker 3>what is publically said, but.

0:07:12.960 --> 0:07:13.640
<v Speaker 1>It's going to come.

0:07:14.040 --> 0:07:17.000
<v Speaker 3>Germany will be very committed, Other countries will be committed,

0:07:17.320 --> 0:07:20.280
<v Speaker 3>so money will come. There will be more money going

0:07:20.320 --> 0:07:24.160
<v Speaker 3>to security. The money will be spent in Europe more

0:07:24.200 --> 0:07:26.280
<v Speaker 3>than in the past. In the past, the majority of

0:07:26.320 --> 0:07:30.040
<v Speaker 3>the money spent for defense acquisition was spent to non

0:07:30.640 --> 0:07:36.920
<v Speaker 3>EU companies, mostly US companies. This will change progressively and

0:07:37.000 --> 0:07:40.040
<v Speaker 3>the money will be spent more wisely with more cooperations

0:07:40.360 --> 0:07:44.600
<v Speaker 3>creating scale. And as you know, we at Herbus are

0:07:44.640 --> 0:07:48.560
<v Speaker 3>experts in creating that scale. We digating commercial legation in

0:07:48.640 --> 0:07:52.040
<v Speaker 3>helicopters as well in missigns with our contribution to MBDA,

0:07:52.400 --> 0:07:55.400
<v Speaker 3>and we are currently working to create scale in satellite

0:07:55.400 --> 0:08:00.120
<v Speaker 3>manufacturing and services with our competitors, with our friends from talents.

0:08:00.120 --> 0:08:01.640
<v Speaker 2>Like when does that get Announcedhen, are we going to

0:08:01.640 --> 0:08:02.040
<v Speaker 2>see that deal?

0:08:02.080 --> 0:08:05.920
<v Speaker 3>But that's something we've already explained. We are moving forward

0:08:05.960 --> 0:08:09.320
<v Speaker 3>into the steps of discussing with authorities for the anti

0:08:09.360 --> 0:08:13.480
<v Speaker 3>trust and creating the case together, so it will come

0:08:13.600 --> 0:08:15.640
<v Speaker 3>later in the year, but that's something we are very

0:08:15.680 --> 0:08:18.120
<v Speaker 3>focused on creating scale in space.

0:08:18.320 --> 0:08:19.840
<v Speaker 2>Jol's great to see, thank you, how much different Sol.

0:08:19.840 --> 0:08:21.280
<v Speaker 2>I'm glad to see us now you've got a busy show.

0:08:21.440 --> 0:08:24.640
<v Speaker 2>Many hats are being worn given Fourie at this air show,

0:08:24.760 --> 0:08:28.080
<v Speaker 2>Yo for the CEO of Airbus and the president of

0:08:28.120 --> 0:08:30.920
<v Speaker 2>Givas joining us on day one here at the Paris

0:08:30.960 --> 0:08:31.320
<v Speaker 2>Air Show.