View Poll Results: Do national political interests prevent Airbus from succeeding?

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  • The traditional centuries-old Franco-German rivalry is the root of the Airbus crisis.

    2 50.00%
  • France's national political interest is a key factor that prevents Airbus from succeeding.

    3 75.00%
  • Germany is to blame for its decision to reduce state subsidies, which has led to a disadvantage in technology investment in the German parts of Airbus.

    0 0%
  • Germany should refrain from embarking on a German-French undertaking in future.

    3 75.00%
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Thread: Airbus's Ethnic Problems: "You Can Never Get a Merger of Mentality and Culture"

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    Airbus's Ethnic Problems: "You Can Never Get a Merger of Mentality and Culture"

    It seems like national political interest is one of the factors that is keeping Airbus from economically succeeding...

    "You Can Never Get a Merger of Mentality and Culture"

    Aviation | 23.02.2007

    Differences in industrial policy and political mentality are hampering Airbus, Europe's market-oriented, cross-border company, from turning a profit, a European integration analyst told DW-WORLD.DE.

    German Chancellor Angela Merkel and French President Jacques Chirac agreed Friday that their two countries should both shoulder the burden of up to 10,000 job cuts at Airbus even as details on how the European aviation giant's restructuring program were again postponed to early March.

    Barbara Böttcher, a European integration analyst at Deutsche Bank Research, talked to DW-WORLD.DE about the difficulties facing Airbus as it grapples with rival national interests, attempts to merge political and industrial policies and turn a profit at the same time.

    DW-WORLD.DE: What motivates governments to buy shares of international companies? Interest in making a profit, gaining influence in how the company is operated or some combination of both?

    Barbara Böttcher: I don't think it's interest in getting profits because large parts of the companies where states used to have shares have not been especially profitable. I think it's much more national interest in securing access to technology and making sure that national interests with regard to security issues are not in danger and probably also making sure that market access for other states or companies is under a certain level of control.

    When we take the example of Airbus, it seems like national political interest is one of the factors that is keeping the company from economically succeeding. Are European companies almost destined to failure when governments buy stakes in them?

    It is not a necessary consequence. Airbus is a very particular issue because the national stakes in Airbus are represented by a fragmentation of the company's production structure. Let's assume that Airbus is concentrated in two locations, one in France and one in Germany. We would then get out of a lot of cost problems and coordination problems so I don't think it's a necessary consequence. But, of course, as soon as you have various national stakeholders in a company, it becomes very difficult.

    The situation is different if you have one national company that has only one state stakeholder. But if you have a group of states holding stakes in a company this is extremely difficult. And this is what the Airbus fuss is about. It's not purely because it's a state-influenced company, but because it's influenced by various state stakeholders with sometimes conflicting interests.

    Is a company like Airbus forced to make decisions for political reasons that end up hurting the company as an economic entity?

    This would be short-sighted. This kind of decision making does not help you survive in the market. From a purely economic point of view, we need to have a streamlining of production structure for Airbus and various other management measures. If there is a decision to neglect this and emphasize the political issue, I think it will become very difficult for Airbus to be a competitor with Boeing.

    German Chancellor Angela Merkel has said there needs to be equality between France and Germany on job cuts at Airbus and at a meeting on Friday French President Jacques Chirac agreed there should be a "fair division." Is that the type of condition that could hinder Airbus' development?

    Once you have reached the decision that there have to be cuts in production sites, I think there has to be some sort of compromise. You have to look at cost efficiency but you have to find a certain balance because otherwise it's not a German-French undertaking anymore.

    Are there examples of multinational, European companies that have succeeded because of -- or in spite of -- having more than one government owning part of them?

    No, I'm afraid not. Some of the projects, like Galileo, they are not really enterprises. They are a type of project financing but not purely market-oriented corporations.

    It could be that the problem comes in when the companies have to make a profit. Running a corporation becomes very difficult when you have even two different political opinions about where a company should go. To a certain extent there are sectors where state influence is understandable. If you have a market for aircraft it is very difficult to have market access without start-up subsidies.

    As shareholders in a company the national governments have a right in saying how a company is run.

    Yes, but you have to see that Germany never exerted this kind of influence. It's very much a German-French problem of different approaches to industrial policy.

    One of the problems that Airbus has run into is that Germany has decided to limit and reduce subsidies in the aviation sector. That has led to a disadvantage in technology investment in the German parts of Airbus, whereas France has consequently pumped state money into their parts of Airbus production. You could say that Germany now suffers from disadvantages because it has tried to step down with state interference in the company.

    The European Union monitors these types of cross-border businesses and projects and in the case of Airbus is helping its defense against Boeing's charges of EU countries providing subsidies. Is there a role for the EU when it comes to finding compromises in how Europe's cross-border projects operate?

    No. Not at all. I think the EU Commission has a say when it comes to issues of competition and problems with market access but there is no role for the EU in this.

    What is the effect of economic patriotism on the EU's single market?

    The economic patriotism we looked at showed that even within the single market there was a nurturing of national champions and ambitions from European governments to deny market access as we've seen in the energy sector in Spain and in the finance sector with mergers and acquisitions in Poland. That is really a problem for the single market, because its major advantage is providing a level playing field and making sure European countries reach a sort of critical mass to compete with US companies in various areas. If you go back and raise the fences around the national markets you certainly undermine the European single market.

    Is there a way to bring national champions from a number of EU countries together to form a European champion?

    That's certainly a very strong industrial policy and, in fact, that was the intention of Airbus and EADS. I think it is very difficult to form a European champion that is driven by political power. I'm afraid they are really domed to fail.

    If you look at a lot of cross-border mergers and acquisition projects of the last decade, especially between Germany and France in the pharmaceutical sector, after five to seven years you see that in order to succeed one of the cultures dominates the company. You will never get a merger of mentality and culture but have one dominant culture and that certainly makes it very difficult to be at an equal level with another country.

    Sean Sinico interviewed Barbara Böttcher
    Source

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    Re: Issues surrounding the Airbus crisis

    German Workers Pledge Fight Against Airbus Cuts

    Aviation | 01.03.2007

    German workers at European jet maker Airbus said Thursday they felt cheated by plans to slash jobs under a drastic restructuring bid, while officials touted their success in limiting the damage.

    Employees at the Airbus plants in the northern German towns of Varel and Nordenham stopped work for the second day while 1,200 workers in the southern town of Laupheim rallied against the planned sell-off of their factory.

    "We have a big advantage. They need the parts we make but we don't need management," head of the works council in Varel, Jürgen Bruns, said in a fiery speech.

    "Praised! Betrayed! Sold!" read the banners at the Laupheim rally, referring to the bitterness many workers felt after Airbus' sunny outlook just two years ago clouded over setbacks with its A380 superjumbo jet programme.

    Airbus parent company EADS triggered the protests with the announcement Wednesday of its "Power8" rescue scheme to axe 10,000 jobs in Germany, France, Britain and Spain and trim its factory network.

    On Thursday, Airbus also announced it had suspended development of the cargo version of its giant A380 superjumbo jet, but said it would continue looking for clients for the freight plane.

    Three clients had placed orders for the Airbus cargo superjumbo plane by November, but since then one has been scrapped and two others were also poised to be cancelled.

    "We are not stopping the program," said an Airbus spokesman. "We are suspending development, but we will continue canvassing for business."

    Union anger

    Germany's powerful IG Metall trade union for the engineering and metal-working industries vowed to fight the sale of Airbus plants and protect German jobs with efforts to boost productivity and create more flexible work contracts.

    The head of the union's northern chapter, Jutta Blankau, announced a European-wide protest movement against the restructuring plan.

    "We hope to mobilize employees across Europe in the next 14 days," Blankau said. "We have spoken with trade unions in the other countries" where Airbus has plants."

    "We oppose any sell-off or closure of a plant. Our slogan is if one is affected, all are affected," she said.

    The head of the works council for the seven Airbus plants in Germany, Rüdiger Lütjens, said the decision to slash jobs and trim the network of plants in Europe made little sense.

    "Our orders list is full, which shows how popular our products are. We do not understand why plants need to be sold," he said.

    Under the restructuring plans, two of the seven German sites -- Laupheim and Varel -- are to be sold, while an industrial partner will be sought for Nordenham.

    Political support

    The northern state of Lower Saxony threw its weight behind the employees. Although he welcomed the plans in principle Wednesday, state premier Christian Wulff promised Thursday to fight job cuts in his state.

    "We reject Airbus' plans to abandon its plants," he said.

    Chancellor Angela Merkel said Wednesday that Germany could have been hit harder if it were not for her government's efforts, in comments echoed by local leaders Thursday.

    Airbus plans to slash jobs across Europe in the next four years, with 4,300 cuts in France, 3,700 in Germany, 1,600 in Britain and 400 in Spain.

    Originally, Germany had feared that up to 8,000 of its jobs could be on the line. Airbus's seven German sites currently employ a workforce of around 21,000.

    A hot potato

    The Berlin daily Der Tagesspiegel said that Airbus had become a political hot potato, overriding the powers of its chief executive Louis Gallois.

    "Airbus is becoming an issue in the French election campaign," it said in an editorial. "An economically effective overhaul is impossible under these circumstances."

    The Munich-based newspaper Süddeutsche Zeitung, however, said it was wise for Airbus to gird itself for tougher times.

    "It is good for the company to undergo a restructuring and cut costs now during an unprecedented boom in the aircraft manufacturing industry," it said.

    "Only then will Airbus survive the inevitable downturn."

    International balance

    Parity in cutting jobs had been requested by French President Jacques Chirac and German Chancellor Angela Merkel at a meeting between the heads of state last Friday.

    Merkel said on Wednesday that the "principle of fair distribution" appeared to have been respected in the restructuring plan for European aircraft maker Airbus.

    Germany's Economy Minister Michael Glos said the restructuring plan offered a "good basis" for the future of Airbus.

    "We all agreed that this is about securing the long-term future of company and of a great European project," he told reporters. "From my point of view, today's decision was a good basis for this. I also think that the distribution of burdens looks balanced."

    A turnaround in fortunes

    The European planemaker is expected to report an operating loss for 2006, a sharp turnaround in its fortunes after years of bumper profits. It also faces pressure from a weakening dollar, which makes Airbus airliners more expensive in international markets.

    "The plan will make Airbus better prepared to face the challenge of the US dollar weakness, increased competitive pressure, the financial burden related to the A380 delays, as well as to meet its other future investment needs," Airbus said in a statement.

    Airbus is owned by EADS, which is controlled by French shareholders media group Lagardere and the French state, and German shareholder car maker DaimlerChrysler. The two sides own 22.5 percent each.

    DW staff (jam/win/tt)
    Source

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    Re: Issues surrounding the Airbus crisis

    US Freight Group Scraps Plane Orders in Further Blow to Airbus

    Aviation | 02.03.2007

    Ailing Airbus suffered its second major blow in a week Friday after US-based freight group UPS cancelled orders for the A380 superjumbo, days after the planemaker announced 10,000 job cuts.

    At the end of a turbulent week for Airbus, US-based freight group UPS heaped more misery on the company on Friday by canceling an order for 10 Airbus A380 superjumbo freighters because of delivery delays.

    The announcement added to the woes of the European consortium and appeared to end plans, for now, for a cargo version of the giant Airbus plane, which will be the world's biggest airliner.

    UPS, ending weeks of speculation, said a final cancellation decision will be formally presented to Airbus on the first date allowed under an agreement reached last week that gives either party the right to terminate the order.

    UPS was last remaining customer

    The US company was the sole remaining customer for the cargo version of Airbus' enormous new plane, whose troubled development has caused much turmoil in Europe.

    Last week's agreement called for a revised delivery schedule that delayed UPS' first A380 jumbo freighter from 2010 to 2012. UPS originally expected its first freighter in 2009.

    UPS said it had intended to complete an internal study of whether it could wait until 2012 for the aircraft, "but now understands Airbus is diverting employees from the A380 freighter program to work on the passenger version of the plane," a company statement said.

    "Based on our previous discussions, we had felt that 2012 was a reasonable estimate of when Airbus could supply this plane," said David Abney, UPS' chief operating officer and president of UPS Airline.

    "We no longer are confident that Airbus can adhere to that schedule. UPS has built one of the largest airlines in the world in order to ensure reliable service to our customers, and we're confident we have the resources to continue doing so in the future."

    On February 5, UPS announced a multibillion-dollar order for 27 Boeing 767 freighter planes, and said the A380 order was subject to an "ongoing review."

    Deliveries of UPS' A380s were originally scheduled to begin in 2009 and run through 2012. But Airbus has suffered repeated delays on the project and earlier this week said it was suspending work on the cargo version due to order cancellations.

    The US freight and messenger service FedEx scrapped its order for 10 A380F cargo planes in November after Airbus announced a two-year delay in deliveries. International Lease Finance Corp. (ILFC), which handles aircraft leases, cancelled its order for five cargo planes and chose instead five passenger jets.

    Airbus faces more turmoil

    This week, Airbus announced 10,000 job cuts and a timetable for slashing its factory network, in a bid to solve the crisis caused mainly by problems with its A380 superjumbo jet. Airbus is to cut 4,300 jobs in France, 3,700 in Germany, 1,600 in Britain and 400 in Spain over the next four years.

    Deliveries of the passenger version of the giant plane are now two years behind schedule, putting a severe strain on Airbus' finances and damaging the company's reputation among clients and investors.

    Airbus is expected to report an operating loss for 2006, a sharp turnaround in its fortunes after years of bumper profits.

    Under the major reorganization announced on Wednesday, Airbus is to sell off several factories and make greater use of sub-contractors.

    The moves have sparked calls for strikes and prompted political leaders in Europe to question the structure of Airbus' parent, the European Aeronautic Defence and Space Company (EADS).

    DW staff / AFP (sp)
    Source

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    Re: Issues surrounding the Airbus crisis

    Airbus chiefs oppose double presidency system

    TOULOUSE, France (AFP)

    The French and German joint chiefs of troubled European planemaker EADS have criticised the way their company was run, saying the double presidency they share added to the problems.

    They spoke against a background of Airbus restructuring including 10,000 planned job cuts in plants in four countries over the next three years following a series of problems, including crippling delays to the flagship A380 superjumbo project.

    Louis Gallois, French co-president of EADS, was set to meet union leaders Monday to discuss the situation.

    In an interview with the German newspaper Sueddeutsche Zeitung Saturday, Gallois criticised the double presidency management arrangement, saying: "The main disadvantage of the double structure is that it creates a French camp and a German camp, because you have a French boss and a German boss at the same time."

    "The other drawback is that it slows down the decision-making process a lot," he said, while noting it was up to EADS shareholders to change the situation.

    "I don't have the cards in my hand. We can live with (the dual structure) but in the future, we should see that EADS and Airbus are normal companies. Today they are not," Gallois said.

    In an interview with the German news magazine Focus to be published on Monday, the German co-president Thomas Enders also criticised the EADS management structure, saying: "Louis Gallois would prefer, like me, to be the only boss in charge."

    But he said the shareholders must decide, adding: "I would prefer a company in which the state does not get involved."

    Gallois will on Monday meet with trade unions to discuss potential repercussions of the Airbus restructuring plan, union sources said Saturday.

    Gallois, who in addition to being co-president of EADS is also president of the Airbus subsidiary, will meet 25 EADS union representatives from France, Germany, Britain and Spain to hear their fears about how the so-called Power8 plan for job cuts will affect their members.

    The plan, announced on February 28, will see 10,000 Airbus jobs cut across Europe in an effort to save five billion euros (6.58 billion dollars) between now and 2010. Airbus unions have called a strike on Tuesday in protest at the losses.

    The plan includes axing 4,300 jobs in France, 3,700 in Germany, 1,600 in Britain and 400 in Spain. At the special meeting on Monday, EADS unions and management will also look at the progress made on moving IT, administrative and financial services from EADS subsidiaries like Airbus, Eurocopter or Astrium, to the parent company.

    In an interview with the Financial Times on Saturday, Gallois accused European governments of interfering in the restructuring of Airbus, saying national conflicts were "poison" for the company.

    03/03/2007 17:26:47 UST
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    Re: Issues surrounding the Airbus crisis

    Airbus Chiefs Criticize Power Sharing and Government Meddling

    Aerospace | 04.03.2007

    The French and German joint chiefs of troubled European plane maker EADS, manufacturer of the Airbus, Saturday criticized the way their company was run, saying the double presidency they share added to the problems.

    They spoke against a background of Airbus restructuring including 10,000 planned job cuts in plants in four countries over the next three years following a series of problems, including crippling delays to the flagship A380 superjumbo project.

    Louis Gallois, French co-president of EADS, was set to meet union leaders Monday to discuss the situation.

    In an interview with the German newspaper Sueddeutsche Zeitung Saturday, Gallois criticized the double presidency management arrangement, saying: "The main disadvantage of the double structure is that it creates a French camp and a German camp, because you have a French boss and a German boss at the same time."

    Gallois bemoans French and German camp structure

    "The other drawback is that it slows down the decision-making process a lot," he said, while noting it was up to EADS shareholders to change the situation.

    "I don't have the cards in my hand. We can live with (the dual structure) but in the future, we should see that EADS and Airbus are normal companies. Today they are not," Gallois said.

    In an interview with the German news magazine Focus to be published on Monday, the German co-president Thomas Enders also criticized the EADS management structure, saying: "Louis Gallois would prefer, like me, to be the only boss in charge."

    Enders unhappy with state involvement

    But he said the shareholders must decide, adding: "I would prefer a company in which the state does not get involved."

    Gallois will on Monday meet with trade unions to discuss potential repercussions of the Airbus restructuring plan, union sources said Saturday.

    Gallois, who in addition to being co-president of EADS is also president of the Airbus subsidiary, will meet 25 EADS union representatives from France, Germany, Britain and Spain to hear their fears about how the so-called Power8 plan for job cuts will affect their members.

    Unions call strike for Tuesday

    The plan, announced on February 28, will see 10,000 Airbus jobs cut across Europe in an effort to save five billion euros ($6.58 billion) between now and 2010. Airbus unions have called a strike on Tuesday in protest at the losses.

    The plan includes axing 4,300 jobs in France, 3,700 in Germany, 1,600 in Britain and 400 in Spain. At the special meeting on Monday, EADS unions and management will also look at the progress made on moving IT, administrative and financial services from EADS subsidiaries like Airbus, Eurocopter or Astrium, to the parent company.

    In an interview with the Financial Times on Saturday, Gallois accused European governments of interfering in the restructuring of Airbus, saying national conflicts were "poison" for the company.

    DW staff / AFP (nda)
    Source

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    Re: Issues surrounding the Airbus crisis

    Since I live in Washington state, I admit I take a bit of delight in hearing about Airbus' problems.

    That said, yes, I agree that the Franco-German aspect of Airbus' arrangement probably creates unneccessary problems, as does partial government ownership of the company.

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    Re: Issues surrounding the Airbus crisis

    "We Should Stop This Franco-German Parity"

    Business | 06.03.2007

    Amid protests over job cuts at Airbus and with national elections in France looming, French political leaders have suggested a government bail-out and an end to the current power-sharing arrangement with Germany.

    As a French-German joint venture involving both governments and private investors, EADS was once hailed as a model for trans-national business cooperation within the European Union. But that may be coming to an end amidst the political fallout from plans to cut 10,000 jobs in the company's troubled Airbus division.

    France stands to lose 4,300 jobs as a result of restructuring plans -- and that in an election year. So the country's presidential candidates are lining up with promises to pump more cash into Airbus and increase French influence on how the company is run.

    In a television interview on Tuesday, conservative frontrunner Nicolas Sarkozy said that Paris should intervene to prevent job losses, adding that EADS needed a single hand at the helm. "There needs to be a real shareholder," Sarkozy said, "who would be the industrial boss of the company and who decides on management, and we should stop this Franco-German parity and just take the best people to take the best decisions."

    Sarkozy's main rival for the French presidency, the socialist candidate Segolene Royal, said during a visit to Berlin that French regions should buy stock in the company. She has also said she would try to freeze the restructuring program.

    The first round of the presidential election is scheduled for April 22. Thousands of French Airbus employees went on strike on Tuesday to protest the planned job cuts.

    Shake-up at the very top?

    And it's not just the candidates who are proposing a re-think of joint Franco-German management structures. Members of the current French government are also calling the partnership in its current form into question.

    "If the state, together with other shareholders should get involved in raising more capital," French Prime Minister Dominique de Villepin has said, "then we should take the opportunity to raise the question of the company's leadership."

    And in a radio interview on Tuesday, French Economics Minister Thierry Breton was even more explicit about a possible end to Franco-Germany parity at EADS, calling it a "mistake" and saying French interests should predominate.

    Production delays to Airbus' flagship super-jumbo airplane A380, caused in part by poor coordination between French and German plants, are costing EADS billions of euros. In February, the company announced the mandatory redundancies as part of its overall restructuring program.

    DW staff (jc)
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    Re: Issues surrounding the Airbus crisis

    Airbus Reports Massive Losses as Franco-German Tensions Rise

    Aerospace | 09.03.2007

    Airbus parent company EADS had more bad news for its sick aviation subsidiary when the first operating loss in its history was announced. This was compounded by new, related tensions between Germany and France.

    Airbus parent company EADS reported on Thursday that its ailing aviation subsidiary, currently in turmoil over job cuts and delays to its new flagship A380 superjumbo, suffered its first-ever operating loss of 572 million euros ($752 million) in 2006 and was expected to suffer further losses in 2007.

    The restructuring costs for Airbus' A380 superjumbo have been cited as the main cause for the forecasted "substantial" operating loss for 2007 along with the problems arising from the adaptation of the popular A350 to the upgraded A350XWB jet. In 2005, Airbus achieved a profit of 2.3 billion euros.

    EADS announced at the presentation of its annual results in Munich that net profit for 2006 plunged to 99 million euros from 1.8 billion euros the previous year. Operating profit before interest and tax slumped from 2.9 billion euros in 2005 to 399 million euros last year, the company added.

    The drop in profits came despite a 15 percent increase in revenue from 34.2 billion euros to 39.4 billion euros.

    Airbus is currently undergoing a restructuring program, which is expected to result in the loss of 10,000 jobs and the selling off of factories.

    Restructuring a priority, say chiefs

    EADS co-chairmen Louis Gallois and Thomas Enders said Friday that implementation of the restructuring program had utmost priority despite the horrendous financial report. They said the company needed to improve its operating performance, regain the confidence of clients and turn itself into a lean, dynamic operation.

    One of the main aspects EADS is looking into in terms of streamlining is the abolition of a two-headed senior management team. Earlier this week, both Gallois and Enders said in separate statements that the current system was too cumbersome and that the company would benefit from a single president rather than the split role of the two co-chairmen.

    On Friday, the German government announced that it was open to the idea of doing away with the long-standing practice of having twin French and German chief executives at EADS.

    Berlin's coordinator for aeronautics, Peter Hintze, told members of parliament on Thursday that the European aerospace giant could instead distribute posts lower down in the leadership ranks equally between French and German nationals to maintain the power balance.

    Until now the European Aeronautic Defense and Space company has always had a French and a German co-chief executive.

    Simmering row over Franco-German ownership

    If EADS were to appoint a single company head, problems would surely arise as to the nationality of the chairman. If either Gallois nor Enders were to be appointed sole chief, the simmering animosity between France and Germany would surely erupt, with the country losing its chairman also perceivably losing a considerable amount of influence in the company.

    The current conflict between the two countries over EADS bubbled to the surface again on Thursday after French Finance Minister Thierry Breton said his country should have taken a bigger share in Airbus parent EADS at the firm's creation.

    Hintze responded to Breton's claim by saying Germany would ensure the even balance between the countries would remain.

    Shift in French power rejected

    "When the French finance minister, Breton, ... called on French radio for the 50-50 relationship between Germany and France to change to 60-40 in France's favor, I can reject that emphatically in the name of the German government," Hintze said in a fiery speech to the Bundestag.

    Hintze accused Breton of seeking to disrupt the delicate balance between the two countries that has existed since EADS was formed in July 2000.

    The French finance ministry replied to the German outburst hours later, denying that Breton had ever called for a rebalancing of the French and German shareholdings. The ministry said Breton had only been referring to the origins of the pact in the radio interview.

    DW staff / AFP / dpa (nda)
    Source

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    Re: Issues surrounding the Airbus crisis

    Mass Strikes Across Europe Hit Airbus Factories

    Aviation | 16.03.2007

    Tens of thousands of striking Airbus workers rallied across Europe Friday to protest management plans to cut 10,000 jobs under a sweeping restructuring plan at the struggling aircraft manufacturer.

    Mass demonstrations took place in northern Germany, southern Spain and in France in a rare show of cross-border union activism against a program that management says is vital to rescuing Airbus.

    "We have shown today that workers at the European level are speaking with a single voice," declared Peter Scherrer, head of the European Metalworking Federation, speaking in Paris outside the headquarters of Airbus parent company EADS.

    In Hamburg in Germany, 42-year-old Johannes Budde, who has worked for Airbus for 18 years, said worker solidarity was the key to forcing management to scrap the overhaul, dubbed Power8.

    "It's only in standing shoulder to shoulder that we will be able to demonstrate our strength to management," he said, noting in anger that Airbus wanted to slash jobs at a time when its books were healthy.

    "Despite our success, they're cutting jobs. But this demonstration sends a good signal to management -- they have to understand that without us they can't work."

    Organizers said 25,000 people turned out for demonstrations in Hamburg and elsewhere in Germany, 7,000 in Toulouse, where Airbus is headquartered, 4,000 at three other sites in France and 9,000 at seven Spanish locations.

    Police estimated the gathering at 10,000 in Hamburg and 5,500 in Toulouse.

    Airbus: cuts are needed

    Airbus insists that its financial and production difficulties are "extremely serious" and that it can no longer delay making cost savings.

    The cuts, together with the total or partial disposal of six sites, are intended to save 5.0 billion euros ($6.6 billion) by 2010 and pull the company out of a crisis caused by delays to its A380 superjumbo program, seen as critical to Airbus' bid to catch up with US rival Boeing.

    The job losses will target Airbus production sites in France, Germany, Spain and Britain. Management has also blamed the strong euro, which makes its products less competitive on world markets and reduces the value of its dollar-based sales, on the manufacturer's financial woes.

    EADS, the European Aeronautic Defence and Space Company, last week published results revealing a first-ever operating loss at its Airbus unit of 572 million euros ($752 million) in 2006 after a profit of 2.3 billion euros in 2005.

    Franco-German tensions

    Announcement of the restructuring on February 28 came amid tension between French and German interests, which dominate EADS, over where cuts should fall.

    In the German state of Lower Saxony where Airbus has two sites, regional premier Christian Wulff voiced support Friday for the workers.

    But in remarks pointing to underlying tensions between German and French interests over the plan, Hamburg senator Gunnar Uldall complained that as French politicians and unions had "turned Airbus into a national project, we have to do the same."

    Daniel Friedrich, a spokesman for the powerful German union IG Metall, said support from the German federal government would be necessary to force Airbus bosses to rescind Power8.

    He added that it was now up to Airbus management to unveil the finer points in the plan, after which "we will be able to propose better solutions, which will takes weeks or months."

    Good news

    Airbus on Thursday received a much needed boost to its business and credibility when two customers pledged new orders worth 23 billion euros ($30 billion).

    Qatar Airways said it planned to buy 80 A350 jets for $17.2 billion (13 billion euros) at catalog prices, one of the biggest orders in the history of Airbus, and Russian airline Aeroflot said it would sign a deal for 22 more of the same aircraft.

    The contracts would be a huge win for the mid-sized, long-haul A350 plane, which was withdrawn and relaunched by Airbus as the A350XWB last year because of poor feedback on the original version from potential customers.

    EADS shares closed higher Friday, gaining 1.38 percent to reach 22.05 euros on the Paris exchange.

    DW staff / AFP (jam)
    Source

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