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More Cuts at Airbus

DW staff / DPA (nda)
November 22, 2007

European aircraft maker Airbus faces a crisis of "life-threatening" proportions as a result of the rise of the euro against the dollar, company chief executive Thomas Enders told employees in Hamburg Thursday.

Dark clouds hang over the Airbus production site in Laupheim, near Ulm, southern Germany
More dark clouds are gathering over AirbusImage: AP

Enders outlined renewed "radical measures" on top of the current Power 8 plan, which is aimed at cutting thousands of jobs to counter the threat to the company, Der Spiegel magazine reported in its online edition.

The Airbus chief was speaking as the euro passed 1.48 dollars. The Power 8 programme, which envisages cutting up to 10,000 jobs and selling off plants mainly in France and Germany, assumes a rate of 1.35 dollars to the euro.

The company, which prices its aircraft range in dollars, has full order books.

Devaluation of dollar could cost company billions

Airbus chief Thomas Enders
Enders says Airbus will have to take radical measuresImage: AP

But a 10-cent decline in the value of the dollar costs Airbus, a subsidiary of EADS, the European Aeronautic Defence and Space Company, around 1 billion euros in turnover.

"We have to reassess our business model," Enders said. "We're talking about radical measures."

He referred to the possibility of outsourcing production to cut costs.

Losses and delays biting hard

A computer-generated image of the Airbus A400M
The Airbus A400M is one of the planes hit by delaysImage: picture-alliance/ dpa - Bildfunk

The company showed a loss of 343 million euros before interest and tax for the first nine months of the year, compared with a profit of 1.43 billion euros a year earlier.

The Power 8 programme was instituted in February as a result of a near-two-year delay to the A380 superjumbo, an Airbus prestige project.

More recently, delays to the A400M military transport plane were announced.

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