German Government Urged to Intervene in Airbus Crisis | Business| Economy and finance news from a German perspective | DW | 04.10.2006
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German Government Urged to Intervene in Airbus Crisis

Plans to move Airbus operations out of Germany as part of a cost-cutting plan have angered politicians and officials who are calling on the German government to intervene in a bid to retain investment in the firm.

Airbus could move its Hamburg operations to a cheaper location outside of Germany

Airbus could move its Hamburg operations to a cheaper location outside of Germany

News that Airbus is facing an uncertain future due to the delayed roll-out of the A380 super jumbo jet by at least a year, and the proposed shifting of operations from Hamburg to cheaper sites in Russia, India and China, has angered politicians and industry officials in Germany.

Politicians in Hamburg, home of the Airbus plant charged with building the super jumbo's cabins, are reportedly enraged at prospects of layoffs after the German state spent 750 million euros ($955 million) to keep the plant running.

Airbus is responsible for some 40,000 jobs in Germany. Berlin daily Berliner Zeitung said the German government was particularly concerned about the future of Airbus' factory in Hamburg -- which employs some 12,000 people amid rumors that all production activities connected with A380 superjumbo could be transferred to Airbus' parent company EADS (European Aeronautic Space and Defence Company) Toulouse in France.

Germany is present in EADS via German-US auto giant DaimlerChrysler, but the group has recently reduced its shareholding in the aerospace group from 30 percent to 22.3 percent.

EADS announced late Tuesday that deliveries of the A380 jet will be delayed by another year on average, meaning the programme is now
running up to two years behind schedule.

Airbus boss Christian Streif has called for crisis talks with Federal Minister for Economic Affairs Michael Glos and will meet the minister on Thursday to discuss emergency measures to prevent Germany losing influence in Airbus.

A spokesman for Glos confirmed on Wednesday that the minister would meet with the Airbus chief this week.

German politicians urge action over Airbus

Airbus in trouble

The Toulouse plant could become more influential

The prospect of a transfer of operations out of Germany would be a major blow, according to a number of politicians who have expressed their concern.

"Such a transfer cannot be accepted without resistance, " economic expert of the conservative Christian Democratic Union (CDU), Laurenz Meyer told Bild Zeitung newspaper Wednesday.

The Social Democrats' economic spokesperson Rainer Wend added: "We must make it very clear to Airbus how much (the company) profits from German involvement."

The German government is being urged to intervene to save the plant and stop the operation being moved abroad.

Government called on to buy stake

Logo des Automobilherstellers Daimler Chrysler vor dunklen Wolken

DaimlerChrysler's stake balanced Franco-German power

Thomas Mirow, the German finance secretary, has called for Berlin to take a direct stake in Airbus to prevent the plant from being switched to other foreign alternatives and has also suggested the alternative of the state-bank Kfw buying a stake in Airbus from DaimlerChrysler AG, which owns 22.5 percent of the company, to secure its future.

The German government refused to rule out buying the German car maker's stake, originally designed to balance the influence of the French Government and the media group Lagadere, which own 22.5 per cent in total, in the long term but had no plans to do so in the "near future."

That left the possibility of KfW stepping in, with the purchase of DaimlerChrysler shares being financed by the sale of the state-owned bank's stakes in Deutsche Telekom or Deutsche Post.

However, this may also not come in time to save the Hamburg operation as KfW, which holds large minority stakes in both former state-owned companies, has promised investors not to sell more Post shares until next year and Telekom shares until the middle of 2008.

While the German government would welcome the purchase of a stake in Airbus as a counterweight to Paris and Lagadere's influence, it would go against Berlin's policy in taking stakes in companies and any further state control in Airbus may upset the United States, whose Boeing company is in direct competition.

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