Sun, Oct 01, 2006 - Page 11 News List

Airbus CEO's revamp plan stalls

NO GREEN LIGHT The European aircraft manufacturer's CEO did not unveil a major restructuring plan as expected because the proposals didn't get the board's approval

AFP , PARIS

Airbus CEO Christian Streiff poses in front of the assembly lines of the A380 early last month in the southern French town of Blagnac, where the European conglomerate is based.

PHOTO: AFP

The new head of Airbus failed to win official backing on Friday from the group's parent company EADS for a major restructuring of the troubled aircraft manufacturer, sources close to the matter said.

Airbus chief executive Christian Streiff appeared before the EADS board of directors at a meeting in Amsterdam to present details of an audit into production problems that have delayed delivery of the A380 superjumbo, the world's largest civilian airliner.

He had also been expected to unveil proposals for a vast overhaul at Airbus, which reportedly include job cuts and other cost-saving measures, and to inform the board on further delays to the delivery of its flagship A380.

But sources close to the issue said later that he did not receive an official endorsement from directors of the European Aeronautic Defense and Space company.

In a brief statement the EADS board said: "Today the EADS board of directors met in Amsterdam to discuss the A380 situation, amongst other regular topics ... The board of directors will continue this discussion in the near future."

A union source asking not to be named said after the talks: "They did not reach an agreement."

He suggested that there may have been disagreement on plans to revamp Airbus, currently struggling to compete with its US rival Boeing, among French and German shareholders in EADS.

German auto giant DaimlerChrysler has a 22.5 percent stake in EADS, the French state 15 percent and the French media and defense group Lagardere 7.5 percent.

A source with Airbus said both the manufacturer and EADS may also have wanted to "take account of reactions from airline companies to the new delivery timetable for the A380."

On Thursday, the CGT trade union said in a statement that the joint head of EADS, Louis Gallois, had met unions "to announce the project for a vast program of economies and reorganization at Airbus following a new delay due to be announced for deliveries of the A380."

The CGT said the new delay was being used as an "alibi for a profound reorganization and to accelerate the strategy by EADS of externalizing internationally [moving activities abroad.]"

When Streiff was named Airbus chief executive on July 7, he set himself 100 days to produce a plan to overcome a crisis that began in mid-June when EADS shares fell 26 percent after it said A380 deliveries would be delayed by up to six months.

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