10/08/2006

Why Publicly Owned Companies Usually Lose Money

For those of you who haven't been following Airbus, their major new plane, the A380, is two years behind schedule and it risks falling even further behind. The current CEO, Christian Streiff, is apparently being pushed out because he is trying vainly to run Airbus like a company. It appears that even with all the government subsidies, Airbus may be in a lot of trouble. Anyway, in reading an article on Streiff's problems, there were a couple of sentences that really stood out:

But Mr. Streiff has been pushing to have a free hand in guiding Airbus, making decisions based on commercial rather than political concerns. . . . According to one executive inside the company, Mr. Enders and Mr. Gallois have grown frustrated by Mr. Streiff’s perceived indifference to political concerns. Mr. Streiff did not respond to an e-mail request for comment.

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