Airbus Rescue Plan Cleared For Take-Off, Expect Delays

Job cuts and and production site reviews are among the top priorities according to new chief.

New Airbus chief Louis Gallois cleared his predecessor's rescue plan for take-off on Oct. 10 but warned that months would be needed to streamline "baroque" practices behind the crisis. Gallois was to meet Airbus managers two days before a Franco-German summit at which President Jacques Chirac and Chancellor Angela Merkel are expected to confront problems at Airbus, which some say has fallen victim to political pressure.

The European Aeronautics Defence and Space Company (EADS) said that co-chief executive Gallois would assume the same post at Airbus and tighten control over the aircraft unit. Speaking Oct. 9 to Europe 1 radio, Gallois said that a rescue plan called "Power8" would be implemented quickly, but that detailed preparations would require "several months of work."

Gallois acknowledged that the management of EADS, which has dual chairmen and chief executives representing France and Germany, and production at Airbus was somewhat "baroque" and "a little complicated." "Some structures are too heavy and we must make them lighter," he said.

Job cuts and and production site reviews were among the top priorities, Gallois noted, adding: "The effort must be balanced between different countries, we must not ask all from one country and nothing from another."

Financial aspects of the restructuring plan were presented by EADS eight days ago. But the group then told employees that up to three more months would be needed to work out details.

Airbus, in difficulties for 18 months, said last week that its flagship A380 superjumbo program would be delayed by up to two years, mainly owing to electrical cabling problems. EADS warned it faced a 6.3-billion-euro (US$7.9 billion) cash shortfall as a result.

Airbus makes planes at two sites in Germany and France under an industrial model that protects jobs but adds to costs and complexity. Spanish and British aerospace companies also contribute to EADS and Airbus, but BAE Systems is about to sell its 20% stake in Airbus to the parent group.

Copyright Agence France-Presse, 2006

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