Posted on 10/10/2006 6:44:10 AM PDT by Righty_McRight
PARIS - The new chief executive of Airbus pledged job cuts at the troubled planemaker and said Tuesday that its biggest handicap against rival Boeing is the weak dollar, not deep production delays for its superjumbo.
Parent company EADS named one of its CEOs, Louis Gallois, to lead Airbus on Monday, after his predecessor Christian Streiff resigned just three months into the job. Gallois also continues to serve as co-chief of European Aeronautic Defence & Space Company NV.
Gallois said on Europe-1 radio Tuesday morning that a new recovery plan "will be painful, because there will be job cuts."
He gave no figures or other details of the recovery plan, except to say that the company would discuss with employees and unions "how to move forward together."
The CGT union said last week the predicted cuts would involve about 2,000 employees at four French facilities.
Gallois did not focus on the delays with the A380 superjumbo that have sent EADS stock sinking this year and frustrated airlines worldwide. Instead, he focused on the weak dollar.
"Airbus' principal handicap vis a vis Boeing is the dollar that has collapsed," he said. Airbus' expenses are largely in the stronger euro.
Workers "know the constraints we live under, they know the dollar exchange rate and they know that the dollar will not recover," Gallois said.
Gallois also said that he disagreed with Streiff's warning that it would take 15 years to turn Airbus around.
Streiff's departure dealt a fresh blow to crisis-hit Airbus. The planemaker, which stunned investors in June by doubling the A380 superjumbo's production delay to one year, doubled it again this month to two years and said the holdups would wipe a total of 4.8 billion euros ($6.1 billion) off EADS profits over four years.
Streiff drew up a cost-cutting turnaround plan for Airbus that enjoyed strong support from EADS directors, but he clashed with the board over how the plan should be implemented and how much control he would personally exercise, according to three officials familiar with the discussions.
In an interview in Tuesday's Le Figaro, Streiff said he had not been allowed the "necessary operational powers" to do the job effectively and welcomed as "a step in the right direction" the combination of the Airbus and EADS roles for Gallois.
EADS owns 80 percent of Airbus and is tightening up supervision of the civil jet unit as it acquires the remaining 20 percent from Britain's BAE Systems PLC.
After concentrating massive resources on the superjumbo, Airbus was taken by surprise by Boeing's two-engine 787, which delivers better fuel economy than older four-engine Airbus jets in the same size category — a sales argument that has grown more persuasive with higher fuel prices.
Airbus took orders for 226 jets through Sept. 30, compared with the 723 announced by Boeing for the year through Oct. 3.
Shares in European Aeronautic Defence and Space Co. fell Monday ahead of Streiff's resignation but rose slightly Tuesday morning, gaining 0.55 percent to 20.27 euros ($25.55).
Ping
Airbus is floundering....it's Bush's fault.
Yep, it's not your lousy airplane made by lazy, ungrateful workers, it's mine and George W. Bush's fault.
I'll stick with a good, solid, safe Boeing if you don't mind.
When did the dollar "collapse"? Was it when the Euro was issued at $1.20? Or today, when it was worth $1.256?
Just goes to show that free trade works better than EU mercantilism, for we all have about twice as many dollars and Europeans have Euros, and we don't have 10% unemployment, either.
Americans are doing everything they can to weaken the dollar - unbridled consumption, no savings.
But the dollar keeps holding its own for the past year or more.
This strengthens the protectionsists in Congress Schumer et al.
And scares the Chinese to death that the Dems may win control.
BUMP
But yet, Airbus does have its highly successful program, namely the A320 Family of single-aisle airliners. Now well-liked by passengers and flight crews the A320 continues to be a good seller even today.
Uh....ever heard of hedging?
The Euro was issued pegged to European currencies, and IIRC it came out at about 1:1 with the dollar. It dipped to costing 80+ cents for a while, then a few years ago the dollar collapsed, bringing it to where it is now.
The Dollar was a lot stronger before the Europeans attacked it by creating the Euro. So if the problem is a weak dollar didnt they create their own problem.?
I know my heat bleeds purple urine for them.
Perhaps the Euro is overpriced?
Heat should be heart--sorry.
Lame indeed. If you can't deliver the product you promised in the time frame guaranteed, you can always blame the Americans (weak dollar). I was skeptical when I read where a Boeing executive stated that Airbus was now a decade behind Boeing. After reading Airbus' excuses, I'm inclined to agree with Boeing.
Didn't we read on another Airbus thread that Airbus was pricing their products in dollars? If so, wouldn't they be doing this to compensate for their stronger currency? Or wouldn't that matter?
everyone knows that for europe to function properly *europe* must be allowed to be weaker in everything!
if the euro were weaker, it would be able to spend *more* european taxpayer's money in order to have bad system engineering, mismatching CAD software, and the lack of a modern virtual mockup.
If we spend all our money on consuming and don't save, how is it we own more in per-capita assets than any other country? Also, if we don't save or invest, how does our net worth continue to increase so rapidly? It's more than doubled since 1995.
You recall incorrectly. It came out at $1.20. Now it's $1.25.
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