Airbus Crisis Dominates Franco-German Talks | Business| Economy and finance news from a German perspective | DW | 12.10.2006
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Airbus Crisis Dominates Franco-German Talks

The crisis at Airbus is at the top of the agenda in talks between French and German ministers in Paris. German Chancellor Angela Merkel will also bring up the issue when she meets with French President Jacques Chirac.

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Germany fears restructuring coud result in lost jobs

Germany is concerned that the restructuring of the problem-wracked European aircraft maker could result in lay-offs at the country's Airbus production factories.

"The government will employ all its powers for the German sites. We will watch closely that possible burdens are fairly distributed," said Economics Minister Michael Glos ahead of the talks.

Sources close to the French President Jacques Chirac said the extent and location of any cutbacks now depended on talks by new management at Airbus, a subsidiary of EADS, according to news agency AFP.

Das Airbus-Werk in Hamburg-Finkenwerder mit Landebahn, aufgenommen am 20. Oktober 2004

The Hamburg-Finkenwerder site is Airbus' biggest in Germany


The sole objective was to "correct structural faults," a spokesman for Chirac said.

Ratings agency Standard and Poor's meanwhile lowered its corporate credit ratings on EADS, saying it was concerned about the European aerospace group's management and its ability to meet organizational and competitive challenges.

Gallois reassures Germans

Louis Gallois, co-chief executive of EADS and the new head of aircraft maker Airbus, was due to visit Airbus' factory in Hamburg on Thursday. In an interview, he sought to reassure Germany that it would not have to bear the brunt of group restructuring.

When it came to the decisions as to where and how costs would be cut, fairness and an equal distribution between the countries where Airbus sites were situated would be taken into consideration, Gallois told the daily Frankfurter Allgemeine Zeitung.


Louis Gallois

Gallois has tried to sooth the Germans

"I don't believe, for example, that you can ask Germans to pay for the French or vice versa," the chief executive said.

EADS has said the rescue plan drafted by former CEO Christian Steiff, who was replaced by Gallois on Monday, will be implemented, although three months would be needed to work out the details. The problems would cut its cash flow by 6.3 billion euros ($7.2 billion) over four years, excluding any new problems, the concern said last week.

Airbus aims to cut administrative costs by 30 percent and boost productivity by 20 percent over the next four years.

Germany is particularly concerned that the Hamburg site might be targeted, since some of the problems in the delays in the group's A380 superjumbo have been traced to that plant.

But Gallois was reassuring.

"If Hamburg has lengthened the take-off and landing runways of its airport" in order to cope with the A380," that could not be ignored, Gallois said.

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