Airbus' public relations people have been faxing their brains out over the weekend, sending out press releases to crow about their victory over Boeing in 2005.

At its annual news conference on Tuesday Airbus said it also led Boeing in deliveries for a third consecutive year, with 378 planes leaving its assembly lines compared with 320 in 2004. Boeing had 290 deliveries after a strike trimmed higher expectations.

Deliveries make up the bulk of Airbus revenues, which rose 10 percent to 22.3 billion euros ($27.1 billion), up from 20.2 billion in 2004. Airbus is 80-percent owned by aerospace group EADS with the rest owned by BAE Systems.

The Airbus order backlog rose to 2,177 aircraft worth $220.3 billion from 1,500 at the end of 2004.

Airbus Chief Executive Gustav Humbert told reporters the return on sales came in at a "ballpark" level of 10 percent, compared with 9 percent in 2004. In 2006, he saw the margin staying beyond 10 percent with continued cost cutting efforts.

Only one problem with this--Boeing made more money.

Humbert also conceded defeat to Boeing in terms of the overall value of jets sold.

He said Airbus's gross orders of 1,111 planes (before cancellations) were worth $95.9 billion and estimated Boeing had taken 55 percent of the total market by value.

He said it was too early, however, to comment on speculation that Airbus would be forced to redesign its slow-selling four-engined A340 to counter the 777's success and that no decisions had been taken.

EADS's shares trade at 15 times forecast 2006 earnings. Boeing, with a bigger chunk of defense income, trades at 21 times, according to Reuters data.

Airbus sold a lot of Chevrolets to Boeing's Cadillacs, a fact buried in the bottom few paragraphs.

I found the story interesting because press releases of this type are designed to talk up the stock, yet all the elements of the story that would interest investors favor Boeing. So what purpose does the press release serve?

Welcome to the world of socialist enterprise, where the political is as important (actually more important) than profit. Airbus like the European Space Program or its announcement of its own GPS satellite network, is all about competing with the U.S. or rather to represent itself as a credible rival economic superpower. Losing to Boeing is a pan-national humiliation and so the PR guys are spinning it to still look like winners.

Notably, not much is said about the A380 that was unveiled with much fanfare last year as "bigger than the 747".

Now Airbus is a profitable and serious competitor, but for how long if its focus is on the symbolic? Even a casual observer of the industry could see that the A380 was a dinosaur the moment it was unveiled--the pattern of air travel and fuel prices make it clear that smaller, more fuel efficient planes are where the market is going.

While not as bad as the Potemkin village antics of the Soviets, the socialist countries of western Europe will always find themselves at a competitive disadvantage as long as they try to mix politics with profit.

Screenpop, a German site, makes my point with the comment

Wir sind schon Weltmeister! Genau genommen Europa und sein Airbus! Ich gratuliere! (We are already world champions! Europe and its Airbus wins)

...and of course in France

Airbus a confirmé sa suprématie en 2005 mais est confronté au retour en force de Boeing (Airbus confirmed its surpremacy in 2005 but is confronted with the return in force of Boeing)

Half of that in the last quarter.

To give you some perspective, Black and Decker made 5.4 billion last year.

Pickup trucks is perhaps the last bastion of American automotive hegemony--there simply has been no realistic alternative to an F-250 or RAM 3500.

That has changed.

The new Tundra has been redesigned from the ground up after considerable marketing research with predictable results--its way bigger and way more powerful, hauling 10,000 lb loads and featuring amenities like bluetooth compatibiity and filing space that acknowledges that a lot of owners use their pickup trucks as mobile offices.

Before I moved west, I never even considered a pickup truck, but western geography makes it a very attractive. On a recent trip to Yellowstone, we were astonished at the number of large pickups pulling impressive travel trailers. After enduring expensive and subpar accommodations, a light came on for the lovely bunny and I. Its by far the best way to travel out west--but you need a big pick-up--maybe a big Toyoto pickup--hmmm.

Bogus Gold quotes Frank Gaffney, president of Center for Security Policy as saying the sale of P&O to UAE interests is a "Harriet Miers moment".

Doug focuses on the political calculus, which is admitted rather obvious--this dog won't hunt. Yet there is a considerable difference between kicking the can down the road on Social Security and allowing partisan warfare to undermine years of foreign policy work.

Chuck Schumer, a man completely devoid of any discernable principles except the pursuit of power by any means necessary, is actively engaged in racist rhetoric. While he cleverly masks it by saying that the UAE had a connection to 9/11, so did Germany, yet we know that this wouldn't be an issue if Germans had bought P&O.

Are we seriously going to engage in racial profiling here? Are we building a bridge back to the 19th century?

Obviously the moral elements of this nefarious rhetoric don't concern people striving for power or survival--so much for a civil society. Let me then offer a more practical argument--basic military tactics.

Sun Tzu devotes a chapter in his famous work to the importance and deployment of spies.

...what enables the wise commander to strike and conquer, and achieve things beyond the reach of ordinary men, is foreknowledge. Now this foreknowledge cannot be elicited from spirits; it cannot be obtained inductively from experience, nor by any deductive calculation. Knowledge of the enemy's dispositions can only be obtained from other men.

...

Hence it is only the enlightened and wise general who will use the highest intelligence of the army for purposes of spying and thereby they achieve great results. Spies are the most important asset, because on them depends an army's ability to march. 

If we alienate our Arab allies, we have thrown away our greatest strategic advantage, and that itself makes Bush's threat of veto much, much easier to understand, even it is no easier to explain to people who don't even think we are at war...

When I first commented on the UAE deal to acquire P&O and run operations at six American ports, I felt like the proverbial voice in the wilderness. The overwhelming consensus was that the deal was bad politics and that it should be dumped.

Now I'm noticing more an more "opinion leaders" takeing a side or a second look.

Charles Krauthammer, who initially condemned the deal in his column, was down right concilatory today on Brit Hume's show.

Glenn Reynolds has come around:

I will admit that my knee jerked on hearing this story, and that I should have waited to learn more before offering an opinion. In my defense, I'll note that I gathered more information and changed my mind. Still, mea culpa.

But (and this is a separate point from the merits of the decision, or of my take thereon) it wasn't just me -- there were an awful lot of knees jerking on this decision, and the White House, or somebody, should have foreseen that. That doesn't get me off the hook, of course, but it doesn't reflect well on them, either.

What's more, this issue resonates so much because there is a huge amount of dissatisfaction out there regarding the Administration's position on border control and homeland security. That's certainly something they should know about, and that made this problem even more predictable.

No knee-jerking here at UNCoRRELATED...bad knees.

A couple days ago I spoke of a Mick posting discussing executive salaries and benefits.  Ironic then that yesterday United Health Group CEO William McGuire is thinking maybe abuse of stock options has gone on long enough and they should curtail the practice.

Well, that is to say, they should curtail the practice now that he's managed to enrich himself by it to the tune of $1.6 BILLION.  Yes I said billion.

As Star Tribune columnist Nick Coleman observes:

I admit that at first glance, $1.6 billion looks bad. But let's do the math. Doc McGuire has been with UnitedHealth for 14 years, which means he has gained only $114 million a year in stock options. And when you break each year into 52 weeks of 40 hours each, grinding away behind a big oak desk, you find that 2,080 hours went into that $114 million. This guy is a workhorse, I'm telling you. He probably worked a few Saturday mornings and took his laptop to Aruba. But here's the clincher: His earnings were below the average earnings of registered nurses in Minnesota. There's your outrage!

By my calculations, Doc McGuire was making $55,000 while nurses, according to labor statistics, made $58,000! Yes, nurses have a tough job, but McGuire runs a health care empire and is totally responsible for making sure we all feel perky. Shouldn't he get paid more than some frazzled nurse trying to keep grandpa alive?

Um, wait a minute. Something doesn't seem quite right. I may have missed something. Oh, yeah. Here it is:

Nurses earn $58,000. A year.

McGuire made $55,000. An hour. Hmmm. Today's registered nurse would have had to start working way back in the Year of Our Lord 41 -- a few years after Jesus was crucified -- in order to have earned the $114 million that McGuire made every year for the past 14 years. 

Keep that in mind when people bitch about rising healthcare costs...

There's a certain amount of angst in Minnesota's manufacturing sector as Ford announced their St. Paul plant is to be shut down in the coming years. There have been the typical rants in the letters to the editor about people with "support the troops" stickers on their foreign cars, and how we should all be driving domestic. Sorry folks, but I just don't buy it, so to speak.

Not that I have anything against Fords, mind you. In fact, I have a Mercury in my driveway. But what do American consumers actually need? The vehicles manufactured in St. Paul, the Ford Ranger pickup trucks, have been selling less and less every year, and frankly it's not hard to see why. Small pickups are fine, as far as they go, but if you get the larger engine and four wheel drive - and if you're using a pickup as your main vehicle in Minnesota you need four wheel drive for winter - you're really not getting any better gas mileage than in a full size. And with gas approaching $3 a gallon, something that's getting 15 mpg around town just doesn't cut it.

What is a "domestic" car anyway? Ford's Crown Vics are manufactured in Canada, and the Fusion is manufactured in Mexico. Meanwhile Toyota, Honda, Nissan, Mercedes, Mazda, Hyundai, etc. all manufacture in the US. Even Kia is building a plant in Georgia. The major brands are so interrelated anyway, I'm not sure "domestic" versus "import" is going to be a meaningful term very far into the future. I'm sorry to see the Ford plant go - it's closing in 2008.

I like Fords, and if I were in the market for a pickup it would probably be a Ford. But for me, a pickup is a want, not a need. And for the few times I genuinely need one I have friends who are happy to lend me theirs. And you can hardly fault the imports for having a better product mix going into times of high fuel prices.

I purchased a car over the weekend - a Volkswagen Jetta TDI. It's tight and nimble as a German sedan should be, and with its turbocharged diesel engine I've got nearly 300 miles on the odometer and haven't used even a half tank of fuel yet.

I've driven diesels before, and they perform just fine. Their power curve is different than a gasoline engine, but it's not worse, just different. With a light foot around town it seldom breaks 2000 RPM and on the highway it pulls the hills just fine in sixth gear. Torque galore. And still enough power, with a heavy foot, to make the tires squeal for mercy.

So I'm sorry for the letter writers, but I just don't get it. I have a sports sedan that rides and handles magnificently while pulling down 40 mpg in town and a solid 50 on the freeway, and I'm supposed to be feeling guilty that I didn't purchase a locally produced tank that won't comfortably fit my whole family, and would cost more than twice as much to run?

How the hell is foolishness "patriotic"?

Crossposted

For those who wonder what the big deal is, it doesn't get much more blatant than this:

Jim soon arrived and said the problem of access had been going on since late February. It had something to do with the security software that Cox isusing from a company called Authentium.Cox has been collaborating with Authentium since April 2005 to develop the security software suite.

Back on February 23rd Authentium acknowledged that their software is blocking Craigslist but it still hasn't fixed the problem, more than three months later. That's a heck of long time to delete some text from their blacklist. And this company also supplies security software to other large ISPs.

Craigslist has approached Authentium several times to get it to stop blocking access by Cox internet users but it has been unresponsive. Jim wasn't aware that Cox had its own classified ads service. "That changes things, " he said.

This situation does not look good in the context of the net neutrality debate. This is exactly the kind of scenario that many people are concerned about, that the cable companies and the telcos will make it difficult for their internet users to access competing services.

Hat tip: MyDD and by all means Call Congress

Crossposted

Some time ago both Mick and I discussed the impending launch of the Airbus A380.  I was underwhelmed and Mick was downright skeptical.  Sample thoughts are here and here.

Well, it looks like Mick's skepticism was well founded.

Shares in European Aeronautic Defense and Space, the parent company of Airbus, fell sharply on Wednesday after another delay in the delivery of the new double-decker A380 airplane raised questions about the company's management and strategy.…

And while we're at it:

Airbus parent company EADS will launch a probe into the latest delays of the superjumbo A380, its co-chairman said in an interview published Thursday, amid mounting questions about the company's management and stock sales earlier this...…  

When Mick is right, he's very much so, and this is one of those times...

Crossposted

Two interesting stories today.

First off, rumors are floating around of a possible alliance between General Mediocrity, er, General Motors and Nissan/Renault. It would be a ballsy move, and problematic in so many ways... But GM needs all the help it can get.

Second, yet again, evidence that we were prescient on the Airbus/Boeing competition.

Airbus said Monday that it won 117 airplane orders in the first half of the year, less than a quarter of the number announced to date by U.S. rival Boeing Co.…

Crossposted

Daniel Patrick Moynihan is credited with saying that everyone is entitled to their own opinion, but no one to their own facts.

Moynihan was alluding to the most common form of rhetorical tactic--simply changing the facts and allowing people to build their very own cloud castles. Greg's recent posting of a nominal conservative's concern over the Bush administration's invasion of our privacy is a case in point. If you can get people to believe the lie that Bush as actually invaded the privacy of Americans, then the rest is easy. I've been trying to innoculate my own children against this most common of tactics for years--always asking them how they know what they know so they really think about the provenance of their facts.

In any event, Amy Ridenour points to an editorial by her husband that lays out some facts on gas prices

According to Bureau of Labor Statistics, the average cost of a gallon of regular unleaded gasoline in U.S. cities was $1.41 in April 1981. Excluding federal and state gas taxes, this meant the price was around $1.26.

In today's dollars, that would be about $2.83 per gallon. But in May, the before-tax cost of a gallon of unleaded gasoline was just $2.29 - about 19 percent lower than that.

Given that we're living under much stricter air quality standards today than we were 25 years ago, that figure probably understates the real price reduction in gasoline prices. In some areas of the country, motorists must use specialty fuels - the so-called "boutique" fuels - to meet pollution standards. This adds to refining costs. As the Federal Trade Commission has noted, "boutique fuels and differentiated access to gasoline supplies... contributes to variability of gas prices."

1981 isn't the only year gasoline prices have been comparable to, or higher than, the prices today. Between July 1979 and October 1983, gasoline was fairly consistently over $2 a gallon. During much of the 1920s and 1930s, gasoline prices were higher than $2, too. In 1922, for example, the pre-tax cost per gallon was just shy of 25 cents - equal to about $3 today.

One part of our fuel bill has increased dramatically in real terms over the years: Taxes. Adjusted for inflation, state and federal taxes on gasoline have increased by 868 percent since 1922 (they were only 0.4 cents per gallon back then) and by 50 percent since 1981 (when they were just 14.5 cents).

Clearly we are not living with "record" prices for gasoline--a distinctly political deception by the Democrats and the lapdog media.

So much political rhetoric exploits our lack of relative experience--a bad hurricane season portends the end of the world, until the fact that this kind of activity is cyclic and has considerable historical precedent is thrown into the mix. Suddenly everything is placed in context.

Checking your premise is a good habit whose benefits extend far past navigating the political maelstrom. Its like a soldier cleaning his weapon before going into battle--when you are absolutely sure, you can have far greater confidence than merely "assuming" things are 'OK'.

Yesterday I walked by the nearly complete NYT Tower on 8th Avenue opposite the Port Authority Bus Station in New York City. 'Obviously it's in NYC,' you say, but the NYT prints in New Jersey and is a useful idiot


for those who'd happily construct a big black hole out of Gotham granite.

I like the architect, Renzo Piano I lived close to the Menil Gallery in Houston (lousy collection, lovely building) and live close to the site of London Bridge Tower (will be the tallest building in Europe and the UK, just iconic ).

The NYT Tower looks good to me, better than the NYT stock-price. Shiny new HQs are infallible sell-signals, flagging desire for pomp before profit. Pride comes before a fool.

The NYT should operate from cheap, dingy premises in Queens or Harlem, not from a princeling's folly that screams elite! elite! elite!. ( I once worked for a triple-A firm in cheap, cramped offices just outside the City of London. Our clients took this as a sign that we were so seriously strong that we didn't need show to boost our own morale or impress the geese ).

Although the NYT stock-price has Traitor's Droop and I'd love to see it implode ( oh Lord, implode that traitor's droop! ), the stock must have recovery prospects in the right hands. That means oust the Sulzbergers or, more likely, the Sulzbergers oust Pinch and instate proper voting rights, letting the stock come in play. A suitable confederacy of dunces to take over the NYT would be a consortium of all the Als - Gore, Franken, Quaeda and the Saudi squillionaire, Waleed. There'd be no need to change its editorial line or news management.

See also Rove runs the Times and Keller as cat's paw for an effeminate/feminist/femmefatalist freakshow of Pinch and Judy and Mo came too .

USA Today had a long article on the woes of Airbus only six months after the company was crowing about their "victory" over Boeing in last years sales race.

As the world braces for an explosion in air travel brought about by emerging middle classes in developing nations, Boeing in a few years could become the sole supplier of competitive midsize wide-body jets. The reversal of fortune for Airbus, which has led Boeing in total plane orders for five years, could knock Airbus out of competition with Boeing for years to come. That would allow Chicago-based Boeing to largely name its price in a market worth $35 billion to $50 billion a year.

That worries customers.

"We need the competition," says Doug Parker, CEO of US Airways, which flies more than 200 Airbus jets and has more on order.

Though there are only two major builders of commercial airplanes in the world, he says, "They're intensely competitive, and that's good for prices and technology development."

Critics of the Airbus superjumbo program are more blunt.

To develop a competitive midsize jet, "Airbus needs to reinvent itself," says aerospace analyst Richard Aboulafia of Fairfax, Va.-based Teal Group, who has followed the industry for 20 years. "The question is: When? When can they pay for it, and when can they find the engineering resources they'll need?"

I guess you have to party while you can, but I find it fascinating that the elite media is so gullible, basically reprinting press releases rather than actually investigating and reporting the real news (business news or otherwise...).

I'm no expert on aviation economics, but frankly it wasn't that tough to see from business travel trends and global economic development that the Airbus A380 is the wrong airplane at the wrong time. More people are flying, but they want to go to a far greater range of destinations than ever before. Airbus has had to concede Boeing's superior grasp of the industries market economics by finally acknowledging that the real competition is with the 787 Dreamliner. The 787 has considerably more flexibility than any other plane on the market with its enormous flying range, capacity and fuel efficiency. Simply put, if you buy a 787, you can use it on far more routes than anything else in the tarmac. Its a plane with a lot of tangible economies that can actually be measured which always makes it far easier to justify a massive capital expenditure of this type.

Streiff, who took on the top Airbus job July 7(what? Somebody got fired?), stopped short of officially launching the (A350)XWB program. He said he won't seek approval from Airbus' shareholders until October to give him time to learn the company.

Streiff is a veteran French corporate executive with no aerospace experience. It was unclear how Airbus will cover the estimated $5 billion cost of developing the new jet family.

Streiff's announcement came on the opening day of the Farnborough International Airshow near London. Airbus was under pressure to announce a new midsize jet at the prestigious industry show where airline industry leaders from around the world congregate.

Streiff acknowledged Airbus "is in the middle of a crisis." He expects the company to emerge "better than before."

Initial industry reaction was cautious. "It's a sound approach," said analyst Richard Aboulafia of the Teal Group in Fairfax, Va. But given the engineering and funding challenges, he said, "This is going to be a difficult road."

Damn right.

The real story here is why Airbus would make such an obvious and expensive error, and the answer is politics. The debacle earlier this year in which the A380 was cast as a symbol of European technical supremacy over the "cowboys" in the U.S.A.

The high point came one and a half hours into the show: The four statesmen, posing on steel scaffolding in front of the Airbus symbolically pushed a button christening the aircraft. With one touch, the A380 became visible under full light for the first time. Choir music filled the hall and the blitz of photographers' flash bulbs began. The company also unveiled its modern new logo on the plane's tail fin.

During speeches given before they took personal tours of the A380's interior, the leaders spoke of the importance of the project for European industry and unity. "The christening of the A380 is for all of us a moment of emotion and pride," French President Jacques Chirac said, describing the super jumbo as a "great success for Europe." He added that he hoped people would take that success and use it to help transform Europe into the world's "headquarters for technology."

In Britain alone, British Prime Minister Tony Blair said, in the long-term 100,000 jobs would be dependent on the A380 and 400 different companies would profit from it. The project could also help generate billions in export revenues for Europe. Blair also praised the environmental friendliness of the new aircraft, saying it would use 30 percent less fuel than comparable jets.

German Chancellor Gerhard Schroeder delivers a speech praising European innovation.
Gently playing off the American competition, Germany's Schroeder said the A380 example showed the advantages of "good old Europe." Traditions like cooperation, he said, fairness towards all employees of a company and social sensitivity had helped lead the company to success and major technological achievement. "Europe is still in a great position to set the tone of the future," he said

Er-r-r sorry about that, could you possibly see your way clear to extending us another 5 billion Euros credit line?

Socialist economic policy is a pet peeve of mine. Aside from the fact that its always a disaster, what really galls me is how arrogantly socialist government impoverish their citizens--telling them its for their "own good".

Greg Prince forwarded a subscriber-only article he knew I would be interested in, on the continuing travails of EADS, the corporate master of Airbus.

...EADS, formed in 2000 through a merger of primarily German and French aerospace companies, there are two of everything: two CEOs, two chairmen, two power centers, one in Toulouse and the other outside Munich (though its official headquarters are in the Netherlands). This isn't some novel approach to modern management. Rather, it's the result of a careful balancing act between the French and German governments, who have large minority stakes in EADS, hold outsized influence over corporate policymaking, and, in general, treat the company like just another state agency.

Never happen here right? Well this week we've seen the city of Chicago trying to impose wage controls on Walmart and other megasite retailers.. It may seem minor, but its the same imposition of a "superior political morality" over free-market economics. I shop at Walmart, particularly for groceries--I don't necessarily like it, but I have a considerably smaller grocery bill as a result. I don't see leg irons on the employees. Jeff, a neighbor of mine, works at my local walmart, managing the dairy department. Jeff has the usual complaints about woolly superiors, but his wages are about the same as with his last employer and with Walmart he knows he'll have a job as long as he wants it. Jeff has had a number of previous employers close stores right from under him, so stability is a major factor in working for Walmart.

This isn't just a "slice of life" anecdote--there is a lesson here. Companies that make profit get to stay in business. Companies that pay great wages and benefits and don't make profits--well, you know how it goes. The salient element here is a sustainable business model, but the city of Chicago is apparently run by people who don't actually have to produce wealth.

So apparently, are the governments of France and Germany.

Not that this is normally a problem. There are plenty of things a government can and should do that don't involve making profits. So why the inexorable attraction to compete in the private sector or otherwise meddle? Well, not everyone will know this, but while a sustainable business model produces profits, it also produces something else that politicians would like to have very badly--dependency. I don't know about you, but I have a "tire guy". When I moved to my current address, I asked around about where people got tires and they pointed me to a local shop and its manager. I've gotten such good service from this guy, that when he left to start his own tire business, I went with him. Politicians would kill for that kind of loyalty, and probably have. Even better is the dependency an employee has on his employer--hence Airbus.

Not only does politics infect EADS, but the company also has an outsized role in politics, particularly in France. Forgeard is a former advisor to Jacques Chirac; shortly before Forgeard was ousted, the Socialists prodded Prime Minister Dominique de Villepin to state whether the government stood behind the embattled CEO, which led to a vicious shouting match on the floor of the National Assembly. If problems persist, the EADS debacle could even be a campaign issue in next year's French national elections. Why do they care? Because the French see Airbus and EADS less as companies than as shining symbols of French civilization--when he rolled out the Airbus A380 at a ceremony last year, Chirac called it "the crowning achievement of a fantastic human and industrial adventure." Say what you will about U.S. corporate welfare, but even George W. Bush wouldn't make such a fool of himself over a jet plane.

Especially because, contrary to Chirac's plaudits, the A380 is an absolute failure. Setting aside the repeated delays in its delivery, the plane was an anachronism before it even left the drawing board. Thirteen years in development, it has come into being during a time when commercial carriers are moving away from big and clunky to fast and efficient. According to analyst Richard Aboulafia, the large-plane sector is only 5-10 percent of the commercial market, and that's space already well-occupied by the 747. The next size down, on the other hand, is 50 percent of the market. It makes sense--smaller planes flying more routes give flyers and carriers more options.

Well I told you that already, over several postings here and I'm not even "an expert". So how to make a socialist million?

Start with a billion...

I was recently at a job site with such restrictive internet access that I could not retrieve a needed file even though I tried FTP, SFTP, email and a couple of other more obscure methods.

The site had a broadband link, but the real problem was an incredibily restrictive internet access corporate policy.

I finally drove to a nearby town and poached a WIFI connection to get my files...

Microsoft executives are implying that this kind of policy is not just an annoyance, but will make a company uncompetitive when trying to attract talented new employees.

“These kids are saying: forget it! I don’t want to work with you. I don’t want to work at a place where I can’t be freely online during the day,” said Anne Kirah, Microsoft Senior Design Anthropologist.

I think she's spot on. Kirah goes on to point out that the new generation is "digitally native", implying that they are so integrated and dependent on digital communication, that they simply will not work in primitive pre-digitial environments.

Kirah cited a Norwegian psychologist who claimed that young people were now so reliant on digital communication that “taking a mobile phone away from a teenage girl is the same as child abuse.”

I wouldn't go that far, but it is an very effective punishment for the rising generation.

Nevertheless, even paranoids have enemies.

While the rising generation is digitally integrated, they aren't necessary safe users. The cost of cyber mischief is impressive and open internet access just isn't financially feasible for most corporations. I would throw the ball back into Microsoft court and ask why they haven't done more to assure an open computing environment that is also a safe environment.

My ISP has spam filiters, My outlook runs spam filters, and yet I get 10 spam emails a day that make it into my inbox. A recent article I can't find anymore, admitted that aside from reformatting and reinstalling the operating system, there is no way to be sure that a machine compromised into a bot net, is actually free from infection.

Cyber security has a bright future...

7-11 announced yesterday that it would not be renewing its 20 year contract with Citgo to provide fuel for 2,100 outlets .

The convenience store operator is dropping Citgo, a subsidiary of Venezuela's government-owned oil company, at about 2,100 stores. The retailer will replace Chavez's oil with supplies from several distributors, including Tower Energy Group in Torrance, Calif., Sinclair Oil of Salt Lake City and Frontier Oil (nyse: FTO - news - people ) of Houston.

While the timing of the annoucement makes a connection to Chavez' comments inevitable, it more likely that Chavez stepped on 7-11's announcement than 7-11 reacting to his UN screed. Citgo has been controversial for a least a couple of years now and considering the fuel is a fungible product, 7-11 just didn't need the grief.

I suspect Citgo will have a hell of a time replacing the business--who wants to buy fuel from a pariah?

The best thing that could happen for Citgo, and frankly for Venezuela, is that it be sold.

Airbus has hiked its break-even projections for the gigantic A380, recently hailed as proof of Europe's technological superiority over the U.S.A. by the usual gang of suspects.

The A380 programme has been beset by huge cost over-runs and long delays.

The firm's parent company EADS now says it needs to sell 420 A380s to break even, up from a previous estimate of 270 aircraft.

To date, Airbus has sold 159 A380s and the first plane is now due in October 2007 - two years behind schedule.

Talk of A380 sales is a little complicated to sort through--Airbus generally quotes "options" as orders, although strictly-speaking, they are not. Then there are memos of understanding, one of which Airbus signed with South Korea (but which may simply be leverage for dealing with traditional supplier Boeing...).

As near as I can tell, Airbus hasn't sold any airplanes in a year.

BAE is selling its 20% stake. Massive layoffs have been promised.

So much for European technological triumphalism.

In fact, unless France and Germany are willing to sink massive amounts of new money into Airbus, there doesn't seem to be anyway for the company to survive.

The A380 was a colossal mistake, even without its technical problems and delays. We've been seeing "route fragmentation" since the early 1990s, well before the A380 was even in its early stages of design, with demonstrable trends towards more frequent flights and smaller numbers of seats per plane.

The best statistical illustration of this is the declining average size on most international routes. Between 1990 and 2001, transatlantic routes exhibited the greatest decline, from an average of 279 seats to 232 seats per flight. Latin American flight size shrank from 194 seats to 168 seats.

The most intriguing fragmentation took place in the Pacific. There, routes shrank from 319 to 304 seats. Yet the Pacific market has only recently seen the introduction of long-range equipment that can come close to the 747’s range with a smaller seat capacity. The Japanese majors, United Airlines, and other carriers have recently had considerable success by replacing 747s with smaller planes, such as the 777 and A340. This implies that fragmentation in the Pacific has only just begun, and could start to emulate the Atlantic market, especially as the new very long-range A340-500 and 777-200LR come on line. And as Airbus is keen to point out, Asia is expected to provide the bulk of the A380’s business case.

Ironically, what really sinks the hopes of the A380 is what's been happening to the Boeing 747. What John Travolta didn't tell you when he bought his 747 is how cheap he got it. We're talking 5 year-old Hyundai market values here. Even more alarming is that an increasing number of these jets have simply been parked. 747s used to be 30% of the fleet. Now they are 10%. If the existing fleet of widebody jets are languishing in storage, then where precisely is this market for the A380?

Market trends have long been for more direct flights with fewer passengers, all which screams "Dreamliner" and not A (for albatross?) 380.

Unfortunately, the size of EADS commitment to A380 means it went all-in on a very bad hand, which leaves it nothing to advance to developing a competitive aircraft in the 787 class.

Such a massive strategic mistake generally results in the sale of the company, but as an icon of European technological supremacy, there is always the possibility that France and Germany will extract new funds from long-suffering taxpayers to save their political hides.

If I were to guess, they'll do whatever is necessary to perserve the jobs and political reputations involved--after all we have precedent:

The last icon of European technological supremacy--the Concorde.

I just updated my Norton Internet Security application and cursed a little bit about the installation process which requires that you use another Symantec program to uninstall the previous version before you install the new one. I had to wonder why, since every other upgrade I've ever is a completely automated process.

Now I might have a clue.

Microsoft, again recognising late that it had failed to seize upon this thing called security, is now about to bundle its own security solutions within Windows Vista and further enforce new security policies that lock out some third-party security solutions altogether. Vendors Symantec and McAfee have looked into the future and realised that people may one day speak of them in the way that we now speak reverently of the early builds of Netscape. This time, history is on their side; court cases and commissions have found Microsoft guilty of antitrust violations, and the security vendors are now using these to argue their point. Unfortunately for Symantec and McAfee, time may have already run out; Microsoft is ready to ship Vista to manufacturers within the next few weeks.

Has Microsoft already been making it difficult for Symantec and McAfee? I don't know enough to say, but it seemed curious nonetheless.

I am of two minds as it concerns Microsoft's plan to incorporate native security into Windows Vista--it seems to me that this should have been the case from the get-go. This may be a case of 20/20 hindsight, but spam, adware, viruses and other malicious efforts to compromise PCs are so ubiquitous that to run a PC 'naked' is a guarantee that you'll be running a brick inside of a week. It just makes sense that a PC's operating system should have a built-in security component.

Symantec and McAfee are undoubtedly upset by the prospect of losing their businesses--who wouldn't be--but you have to ask yourself what kind of moron would establish a business on the good graces of Microsoft. Its not like there is no precedent for former high-flyers crushed by Microsoft's coopting of the market segment--Lotus, Word Perfect, Netscape and dozens of smaller companies have fallen victim to Microsoft's willingness to let someone else do the trail-blazing while they set up a toll-booth.

The other side of this coin is precisely the "doomed relationship" scenario between Microsoft and its partners. Presumably prospective investors in nascent technologies will think three times before they sink millions of dollars in a new consumer software technology based on the Windows OS. That may not hurt Microsoft much in the short term, but it does hurt consumers, and long-term it could hurt Microsoft as well should a viable competitor arise.

I use Linux everyday, and while its not a casual-user-friendly OS (the lovely bunny would argue that neither is Windows..), that's a relatively minor obstacle as Apple has demonstrated with its X system (using UNIX--an OS no more "friendly" than Linux in its native format...). My bet is that the latest and greatest software innovations aren't going to be with Windows in the future-- thanks to the greed of Bill Gates etal.

Even though I've been a Windows user for 20 years, I am seriously considering Apple as my next PC.

Ever since the unveiling of the A380 and the triumphalism of le President and Der Chancellor, I've maintained a keen interest in Airbus fortunes--mainly because I'm interested to see if my predictions bear out.

First the good news--Quantas converts some of their options to orders for the beleaguered A380.

Despite the major delays in the Airbus A380 project, the Australian airline Qantas announced Sunday that it has ordered eight more of the superjumbos.

Qantas chief Geoff Dixon said that the A380 is the best solution for long distance flights to the US or Western Europe.

The Qantas deal, worth in the region of 2.5 billion dollars (2 billion euros), is the first order for the A380 since June 2005. The Australian airline has ordered 20 A380s in total and has an option for 12 more. The planes are to be delivered between 2008 and 2015, Qantas said.

Not all of Airbus' planes are Albatrosses though...

Despite the major delays in the Airbus A380 project, the Australian airline Qantas announced Sunday that it has ordered eight more of the superjumbos.

Qantas chief Geoff Dixon said that the A380 is the best solution for long distance flights to the US or Western Europe.

The Qantas deal, worth in the region of 2.5 billion dollars (2 billion euros), is the first order for the A380 since June 2005. The Australian airline has ordered 20 A380s in total and has an option for 12 more. The planes are to be delivered between 2008 and 2015, Qantas said.

There is an interesting paradox here--the only remaining competition to the A320 is the Boeing 737, which most experts acknowledge is at a competitive disadvantage relative to the Airbus product. The A320 is a short to intermediate range plane perfectly atuned to industry trends of more flights from more originating points with fewer seats. Clearly at some point, the Airbus management had some really good marketing insights.

What happened?

News of a cancelled order for the A340 is essentially the death-knell of that product-line, which with the A380, constitutes the totality of Airbus' long-range offering. Airbus is in real danger of being reclassified as a competitor for Embraer (Brazil) and Bombardier (Canada) in the short-range aircraft business.

EMIRATES, the fastest growing global airline, has dumped orders worth $4 billion (£2.1 billion) for the Airbus A340 and admitted that it is in negotiations to buy $8 billion worth of Boeing 747s.

The carrier is dumping ten firm orders and eight commitments to buy A340s because they no longer fit the carrier’s requirements. The move effectively kills off the A340.

The airline is also talking to Boeing, Airbus’s rival, about buying the new generation of jumbo jet, called the 747-8. Tim Clark, the president of Emirates, said yesterday that he might buy 20 to 30 of the new 747s if Boeing agreed to change the specifications.

Aviation analysts believe that Emirates’ decision to dump the A340 effectively signals the end of the aircraft’s life in its current form.

Airbus only deliver 10 A340s this year, compared with Boeings 47 777s. Seeing the order go instead for a bunch of "obsolete" 747s adds insult to injury.

Finally, on the A380 front, the good news of the Quantas order is mitigated by Virgin's deferal of an order for six aircraft.

Virgin Atlantic has said that they are deferring their order for the new Airbus A380 by four years. The company had ordered six of the new superjumbos for delivery in 2009 but they now want them delivered by 2013.

A380 plane has been a problem for Airbus as it has already suffered too many delays. Market had been speculating that Virgin would ditch the plane altogether but they have responded by stating that they still are confident about this plane.

Virgin added that they now want the company to prove the worth of this craft in commercial service and they would wait for a couple of years before putting its own A380s into operation. The company had originally wanted the deliveries of the plane in the current year itself.

Looks like a prelude to cancellation, or perhaps a way of recover their deposit.

The EADS consortium is truly all in at this point--to forestall total disaster, they must make the A380 a commercial and technical success or face a loss of their investment. Yet even if they manage to deliver some planes and they work as advertised, hard market facts make profitability a virtual impossibility.

Right now its "sauve qui peut.."

Businessweek damns Microsoft with faint praise:

At 3:32 p.m. on Oct. 19 an e-mail flashed across the screens of the 230 Microsoft employees working slavishly to bring the Zune music player to market. The sender was their brash team leader, J Allard, 37. The message included a link to an old video of Steve Jobs on YouTube, mocking Microsoft's creativity. "The only problem with Microsoft is that they have no taste," the Apple Computer boss says. "They have absolutely no taste."

Allard was using one of the oldest motivational tricks in the book--his version of a football coach posting an opponent's quote on the locker room wall. "I for one...want to see this guy eat his words," Allard wrote. "Those are fighting words. He is speaking to every one of us and saying that we don't get it."

It turns out that Steve Jobs was right.

The Zune is a complete, humiliating failure. Toshiba's Gigabeat player, for example, is far more versatile, it has none of the Zune's limitations, and Amazon sells the 30-gig model for 40 bucks less.

Throw in the Zune's tail-wagging relationship with music publishers, and it almost becomes important that you encourage people not to buy one.

The iPod owns 85 percent of the market because it deserves to. Apple consistently makes decisions that benefit the company, the users and the media publishers -- and they continue to innovatively expand the device's capabilities without sacrificing its simplicity.

Companies such as Toshiba and Sandisk (with its wonderful Nano-like Sansa e200 series) compete effectively with the iPod by asking themselves, "What are the things that users want and Apple refuses to provide?"

Microsoft's colossal blunder was to knock the user out of that question and put the music industry in its place.

Result: The Zune will be dead and gone within six months. Good riddance.

Well Microsoft has a little more staying power than six months, especially when their credibility is on the line, but Andy Ihnatko is right--Zune sucks and so does Microsoft. How bad they suck is really shocking. Slashdot points to a Microsoft insider's blog who describes a development process so byzantine that it defies belief.

So that nets us a conservative estimate of 24 people involved in this feature. Also each team of 8 was separated by 6 layers of management from the leads, so let's add them in too, giving us 24 + (6 * 3) + 1 (the shared manager) 43 total people with a voice in this feature. Twenty-four of them were connected sorta closely to the code, and of those twenty four there were exactly zero with final say in how the feature worked. Somewhere in those other 17 was somebody who did have final say but who that was I have no idea since when I left the team -- after a year -- there was still no decision about exactly how this feature would work.

By the way "feature" is much too strong a word; a better description would be "menu". Really. By the time I left the team the total code that I'd written for this "feature" was a couple hundred lines, tops.

What was this feature? The shutdown menu.

Incredibly, the shutdown feature team was already using the Mac user interface as a model, which only emphasizes how right Steve Jobs was--Microsoft simply doesn't value creativity and imagination. The Zune makes it clear that they don't value the customer much either. Neither of these deficits is insurmountable--lots of companies are very successful copying someone else's idea and doing it better, and customers have demonstrated that they'll take an incredible amount of abuse to buy a recognized brand. Yet Microsoft isn't doing it better, faster or cheaper.

Businessweek's lionization of Microsoft VP J. Allard notwithstanding, its a company in desperate need of creative leadership. Companies the size and importance of Microsoft don't disappear, but they do fade away.