Minister says Airbus factories saved

28th February 2007, Comments 0 comments

PARIS, Feb 28, 2007 (AFP) - Airbus, the European airliner maker caught in a five-month crisis over restructuring and cutbacks, faced a watershed on Wednesday with the announcement of the plan to make huge cost savings and reorganise the business.

PARIS, Feb 28, 2007 (AFP) - Airbus, the European airliner maker caught in a five-month crisis over restructuring and cutbacks, faced a watershed on Wednesday with the announcement of the plan to make huge cost savings and reorganise the business.

But French Transport Minister Dominique Perben, in a further sign that radical cuts may have been redrafted, signalled on Wednesday that no Airbus sites would be closed down, leaving open the possibility that some might be split off to subcontractors.

The French government has also said recently that job cuts, which could number as high as 10,000, would not involve forced redundancy.

The candidate for the opposition Socialist Party, Segolene Royal, called on Wednesday for a "moratorium" and said that, if elected, she would propose reviewing the management of Airbus.

The French state, as a shareholder in the parent group EADS, had to assume its responsibilities, she said.

The plan, to save 5.0 billion euros (6.6 billion dollars) by 2010 and 2.1 billion euros per year thereafter, was announced in principle at the beginning of October, but subsequently became bogged down in disagreement between its partners, mainly France and Germany.

The strains have been over how costs should be cut, where jobs should be shed and how the business should be reorganised.

The company, under pressure from customers and from competition from US manufacturer Boeing, has stressed that resolution of the plan is now urgent.

The problems at Airbus, a subsidiary of European group EADS, were exposed by long delays in production of the A380 superjumbo airliner and have collided with campaigning for a president election in France in April.

Union representatives of staff in the cross-frontier group, who have vied with demonstrations to protect their jobs, met in Brussels on Tuesday to plan their strategies to fight cutbacks and hinted that the first strike could be only weeks away.

And investors will want to know if the company intends to raise new funds, and if so how.

Early on Wednesday the works committee at Airbus, which by law must be informed and consulted of significant management plans, was meeting at the group's headquarters at Toulouse in southern France to hear company president Louis Gallois present the details of the plan, called "Power8".

Nearly 25 representatives from unions in Airbus in France, Germany, Britain and Spain were to attend the meeting.

Junior French Employment Minister Gerard Larcher said meanwhile that the plan was "indispensable".

A report in the Financial Times newspaper in London said that the plan included a proposal to open a factory in Britain making composite materials.

Copyright AFP

Subject: French news

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