Airbus Announces New Cost Cuts, and Investment Outside Eurozone

New factory in Tunisia

Airbus announced construction of a factory in Tunisia, as well as cost cuts, under a strategy to expand production of its airliners in several countries outside the eurozone. CEO of Airbus parent group EADS, Louis Gallois, said part of the cost cutting involved the installation of a factory in Tunisia to make parts, but he also mentioned China, India, Russia and Mexico.

Airbus and EADS want to increase production in low-cost countries and in locations outside the eurozone to help counter the effects of persistent weakness in the dollar.

The group, recovering from crisis over production delays for the A380 superjumbo airliner, said it was boosting its Power8 restructuring programme involving 10,000 job cuts to save 5.0 billion euros with extra cost reductions of 650 million euros by 2012. Of this, 300 million euros would be generated by production in low-cost or non-eurozone countries, and the overall savings for the parent European Aeronautic Defence and Space Company would be 1.0 billion euros in 2011-2012.

Gallois said Airbus would have to "increase its presence in India given the number and quality of its (India's) engineers."

The Maghreb region of North Africa was of interest to EADS "for standard production because of the costs."

He said that China was also a necessary construction bases "for reasons of proximity to markets."

Copyright Agence France-Presse, 2008

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