Airbus to try restructuring plan after A380 crisis

29th September 2006, Comments 0 comments

PARIS, Sept 29, 2006 (AFP) - The new chief executive of Airbus was Friday outlining a vast restructuring plan for the ailing aircraft maker that could involve major job cuts and shifting more production out of Europe.

PARIS, Sept 29, 2006 (AFP) - The new chief executive of Airbus was Friday outlining a vast restructuring plan for the ailing aircraft maker that could involve major job cuts and shifting more production out of Europe.

Christian Streiff was presenting the plan in Amsterdam to the board of Airbus's parent company EADS following further delays to the A380 superjumbo project, a key part of the Airbus' battle to keep up with US arch-rival Boeing.

The presentation came a day after Airbus suffered another setback when European and US aviation authorities said the A380's powerful wake meant that other aircraft would have to keep a greater than usual distance between themselves and the giant plane.

This could led to more congestion at airports, and thereby reduce the appeal to airlines of the A380, which can carry 840 people and will be the biggest civilian airliner when it enters service next year.

When Streiff became Airbus's chief executive on July 7, he set himself 100 days to produce a plan to take the company out of the crisis that began in mid-June when EADS shares fell 26 percent after it said A380 deliveries would be delayed by up to six months.

No details have officially been released of the proposed Airbus restructuring but union sources said it was likely to include major job cuts and other efficiency measures that could affect factories in France, Germany, Spain and Britain.

According to the CGT trade union, Streiff intends to deepen a previous cost-cutting program called Route 06 which foresaw EUR 1.5 billion of cost savings per year starting in 2006.

The co-chief executive of European aerospace and defence giant EADS, Louis Gallois, held talks with metal workers' union representatives on Thursday and partially revealed the plan, union sources told AFP.

Airbus, which employs 57,000 people directly, also plans to reduce the development time for aircraft through a major internal re-shuffle, the CGT said.

Airbus admitted last week that a third round of A380 delays was likely to be announced and sources told AFP the company would announce a halving of its expected deliveries next year.

Deliveries of the A380 are already running more than a year behind schedule, which has damaged the reputation of Airbus but has so far not led to any cancellations for the airliner.

The A380 is of vital importance for the reputation of Airbus amid a fierce battle for orders with US rival Boeing.

EADS, a Franco-German group, owns 80 percent of Airbus, with the remainder of the company held by BAE Systems of Britain.

BAE chief executive Mike Turner, whose company is seeking shareholder approval to sell its 20-percent stake in Airbus to EADS, said on September 13 that EADS might seek a fresh cash injection from shareholders because of the Airbus crisis.

In Paris on Friday, EADS shares dropped 0.26 percent to EUR 22.94 on the CAC 40 index.

Copyright AFP

Subject: French news

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