Airbus may have to sell production sites: Gallois

TOULOUSE: Airbus may have to sell some production sites as part of its restructuring plans, the planemaker’s new head said in remarks published on Wednesday.

Airbus chief Louis Gallois also told the Depeche du Midi paper that without the ‘Power8’ restructuring project, Airbus cannot launch the A350, its next model after the delayed A380 superjumbo, which is seen as vital to catch up with Boeing. “We are going to study everything without blinkers, including the solutions used by Boeing, which sold some of its sites. I don’t have any preconceived ideas, and we will be pragmatic,” Gallois told the southwestern French daily.

Gallois’ predecessor Christian Streiff, who quit after three months in the job earlier in October, started mapping out the plans to save 30% in structural costs as Airbus wrestled with fresh delays to its superjumbo.

Airbus faces pressure from many politicians to protect jobs. It has plants in France, Germany, Spain and Britain.
“Even without the A380 problems, we would have needed Power8 to cope with the weak dollar,” Gallois was reported as saying.

“Because of the dollar’s fall we have lost 20% in competitiveness against Boeing since the A380 was launched in ’00. We can’t stay in that situation. Without Power8, we cannot launch the A350. The future of Airbus is at stake.”

The A350 is Airbus’s answer to Boeing’s recent success in the fast-growing market for future mid-sized jets that will be able to fly on long distances on two engines instead of four. Airbus hoped to use an old fuselage, but after poor sales against Boeing’s all-new 787 Dreamliner it had to redesign the plane at potentially twice the original euro 4bn ($5.02bn) cost.

Airbus parent EADS will decide in two weeks whether to go ahead with the costlier version, a board member said. “The delay of the 380 has no importance at all. EADS’s problem is not the delay of the 380. The delay is a financial problem but will be resolved,” said Francois David, who is president of export insurance firm Coface and a member of the board of directors of EADS. “It is an excellent plane with clients ... and no rivals. It will be late by two years, or one and a half years, but it is not serious. What is serious is the new rival to the 787,” he told reporters in Paris.

“The question which will come up in 15 days’ time for the board of EADS is, do we launch a rival to the 787? That is the real question.”

Meanwhile, the German government considers state intervention in troubled aerospace group and EADS as a last resort, a German magazine reported on Wednesday. The purchase of a stake through Germany’s state development bank KfW would only be a “last option” for the finance ministry and Angela Merkel’s chancellery, in the case that no private German investor could be found, Wirtschafts Woche reported in its online edition.

The German government has faced hefty criticism at home and abroad over plans to help the troubled company by buying up a portion of its shares from core EADS shareholder DaimlerChrysler.

DaimlerChrysler, which is in the process of reducing its EADS stake from about 30% to 22.5%, has signalled its intentions to sell a further 7.5% stake.

WirtschaftsWoche’s online service also said that Merkel was still sceptical and did not favour the state’s involvement in EADS.