FlyKLM747
2006-10-08, 09:08 PM
Airbus CEO Christian Streiff admitted that the manufacturer now is up to a whole decade behind rival Boeing, while parent EADS co-CEO Tom Enders conceded that it no longer may be feasible to pursue the A350 XWB program.
The revelations came yesterday as Airbus continued to deal with the fallout from Tuesday's announcement that the A380 will be delayed an additional year and the company will undergo a radical restructuring dubbed "Power8" aimed at slashing overhead costs by 30%.
Streiff told Le Monde that his review of Airbus operations has uncovered serious production inefficiencies. "It will take us about 10 years to catch up with Boeing in terms of development and efficiency," he said.
Enders, speaking at a Berlin news conference, said the A350 XWB program is under review. "We will discuss intensively in the next weeks whether we have the financial and engineering resources to actually take on this program," he said.
Both executives and EADS co-CEO Louis Gallois have said repeatedly this week that no firm decisions regarding the Power8 plan have been made. "Everything's possible but nothing's decided," Streiff said. Speculation over job cuts and transferring assembly work, including moving A380 production from Hamburg to Toulouse, already have generated political controversy in France and Germany.
German Economics Minister Michael Glos warned at a press briefing that job cuts and facility closures must be "equally [and] fairly distributed" between France and Germany. Airbus employs 42,000 workers in Germany, including 11,000 in Hamburg.
Enders said details of the restructuring will be revealed "within four months." When pressed during a Tuesday conference call with analysts and reporters to explain what was meant by cutting overhead by 30%, he said, "We don't want to define this figure."
What is clear, however, is that EADS will incur significant losses due to the A380 delays. "Compared to our old plan...the shortfall in terms of cash generation, in the timeframe until 2010, is slightly more than €6 billion ($7.62 billion)," EADS COO Hans Peter Ring said during the Tuesday conference call, adding, "the situation is very serious." He said the EADS board has "not excluded" pursuing civil or criminal complaints against individuals it believes are responsible for the extensive program delays. "We're talking about billions that the company, that the shareholders effectively are losing," he said. "This is why the board of directors has reserved the right to investigate who is responsible for that situation."
Former Airbus CEO Gustav Humbert and former EADS co-CEO Noel Forgeard resigned shortly after a six-month delay to the A380 program was announced in June. Airbus now says it "underestimated" its problems at that time.
The revelations came yesterday as Airbus continued to deal with the fallout from Tuesday's announcement that the A380 will be delayed an additional year and the company will undergo a radical restructuring dubbed "Power8" aimed at slashing overhead costs by 30%.
Streiff told Le Monde that his review of Airbus operations has uncovered serious production inefficiencies. "It will take us about 10 years to catch up with Boeing in terms of development and efficiency," he said.
Enders, speaking at a Berlin news conference, said the A350 XWB program is under review. "We will discuss intensively in the next weeks whether we have the financial and engineering resources to actually take on this program," he said.
Both executives and EADS co-CEO Louis Gallois have said repeatedly this week that no firm decisions regarding the Power8 plan have been made. "Everything's possible but nothing's decided," Streiff said. Speculation over job cuts and transferring assembly work, including moving A380 production from Hamburg to Toulouse, already have generated political controversy in France and Germany.
German Economics Minister Michael Glos warned at a press briefing that job cuts and facility closures must be "equally [and] fairly distributed" between France and Germany. Airbus employs 42,000 workers in Germany, including 11,000 in Hamburg.
Enders said details of the restructuring will be revealed "within four months." When pressed during a Tuesday conference call with analysts and reporters to explain what was meant by cutting overhead by 30%, he said, "We don't want to define this figure."
What is clear, however, is that EADS will incur significant losses due to the A380 delays. "Compared to our old plan...the shortfall in terms of cash generation, in the timeframe until 2010, is slightly more than €6 billion ($7.62 billion)," EADS COO Hans Peter Ring said during the Tuesday conference call, adding, "the situation is very serious." He said the EADS board has "not excluded" pursuing civil or criminal complaints against individuals it believes are responsible for the extensive program delays. "We're talking about billions that the company, that the shareholders effectively are losing," he said. "This is why the board of directors has reserved the right to investigate who is responsible for that situation."
Former Airbus CEO Gustav Humbert and former EADS co-CEO Noel Forgeard resigned shortly after a six-month delay to the A380 program was announced in June. Airbus now says it "underestimated" its problems at that time.