Airbus postpones restructuring announcement

Airbus postpones restructuring announcement
Comment E-mail Print Share
First Published: Tue, Feb 20 2007. 06 23 AM IST
Updated: Tue, Feb 20 2007. 06 23 AM IST
Paris: Airbus said its long-awaited restructuring plan, designed to make up for costly production setbacks, has itself been delayed.
The European aircraft maker called off a works council meeting and news conference at which the “Power8” turnaround strategy was to have been unveiled on 20 February 2007, after French and German shareholders of parent company EADS failed to agree on where to build the A350 XWB — a planned rival to Boeing Co.’s mid-sized 787.
A European Aeronautic Defence and Space Company board meeting ended late on 18 February without agreement on the “cross-national sharing the industrial workload related to the A350 XWB,” the Franco-German defense group said in statement on 19 February.
In a sign of renewed tensions within EADS, French co-CEO Louis Gallois — who also heads Airbus — defended his restructuring plan in a separate statement issued by the Toulouse, France-based aircraft maker.
“I made proposals which I deem balanced, both from an industrial and a technological point of view, and which serve our objective of economic competitiveness,” Gallois said.
“Airbus cannot delay any longer implementing Power8,” he said.
France’s two main financial newspapers, Les Echos and La Tribune, reported on Monday that Gallois is seeking to cut close to 10,000 of the company’s 55,000 jobs, sell off some production units and centralize assembly of the A350 in France, in exchange for agreeing to build a future revamp of the single-aisle A320 airliner in Germany.
Under the plan, France and Germany would each contribute between 3,000 and 4,000 of the job cuts, Les Echos said. Neither paper named sources. Airbus and EADS both declined to comment on the restructuring proposals or the discussions.
Shares of European Aeronautic Defence and Space Company rose euro0.72 (Rs41.63), or 2.9 % to close at euro25.84 in Paris, as the delay was overshadowed by media reports that Qatar is mulling the purchase of a 10% stake in EADS.
Airbus is struggling to recover from a costly two-year delay to its double-decker A380 superjumbo programme while funding development of the A350, a belated rival to Boeing Co.’s 787 — which has steadily won business from Airbus in the lucrative market for long-range, mid-size planes.
The impending shake-up is being closely watched by the French government — which owns 15% of EADS — and by Germany. German Economics Minister Michael Glos, who recently suggested that EADS could lose defense contracts if it cut too many jobs in the country, reiterated on 19 February that the restructuring plan should be “balanced” between the two countries and take account of the views of local and regional politicians.
French Finance Minister Thierry Breton said Monday on France-Inter radio that, while Airbus’ situation was a passionate issue across the board, “it is clear that ... the company alone must assume its responsibilities.”
Underlining the political sensitivity of the Airbus plan, President Jacques Chirac’s office confirmed that the French head of state was likely to discuss the subject with German Chancellor Angela Merkel when the two meet in Germany on 23 February.
No new date has been set for the restructuring plan to be presented to staff representatives, an Airbus spokeswoman said late Monday.
Comment E-mail Print Share
First Published: Tue, Feb 20 2007. 06 23 AM IST
More Topics: Corporate News | World Business |