Weakening dollar sends EADS searching for financial solutions
EADS is working out the details of an addition to its Power 8 restructuring plan to cope with the continued decreasing value of the dollar against the euro
EADS is working out the details of an addition to its Power 8 restructuring plan to cope with the continued decreasing value of the dollar against the euro. Speaking at the European company’s third quarter result conference in Amstersdam, Netherlands, on November 8, EADS CEO Louis Gallois said current hedges are not strong enough to counterbalance the effect on profits.
“Every time the dollar goes down by 10 euro cents, we lose one billion euros in operating result,” he said. In 2007, EADS hedged at 1.37. Previously, “matured” hedges averaged 1.14. On the eve of the show, the euro/dollar exchange rate was close to 1.47. EADS officials anticipate their revenues to decrease “very slightly” in 2007, mainly due to the currency exchange rate.
