updated 10/10/2006 7:48:08 AM ET 2006-10-10T11:48:08

The new head of European plane maker Airbus said on Tuesday the group’s structure needed to be simplified and decisions would be made in the next few months which could lead to “painful” job losses among its 55,000 staff.

Louis Gallois, who took over late on Monday when Christian Streiff resigned after just 100 days in the post, said the fact that he was combining the jobs of Airbus head with his existing role as co-chief executive at Airbus’s parent EADS already meant a simplification of the structure.

“There will no longer be potential conflicts between the co-president (chief executive) of EADS and the head of Airbus. That allows a simpler and more unified command structure,” he told Europe 1 radio in an interview in Paris before leaving for the Toulouse headquarters of Airbus where he met managers.

He said the A380 superjumbo, a double-decked plane for more than 550 passengers which has now been delayed by two years following production problems due to the complicated wiring runs, remained a great aircraft.

“If we have a problem with the wiring, it is because Airbus is not yet a fully integrated company and now we have to meld it together ... we have no longer a choice,” he said.

Gallois used to run France’s Aerospatiale, one of the groups that merged to become the multinational European Aeronautic Defense And Space Co (EADS) in 2000 and a leading force behind Airbus. He will retain his role at EADS, where he is co-chief executive alongside Tom Enders. Before joining EADS three months ago Gallois led French railways group SNCF.

“What we ask from Gallois is that he reassures the staff, not the shareholders as his predecessor wanted,” said Xavier Petrachi of the French CGT union.

“Why change the entire group. It always worked fine between the four historical partners (in Airbus). The Franco-German parity is an excellent thing, an engine that could easily break down if you tamper with the equilibrium,” Petrachi added.

Airbus began as a French-German consortium in 1970 that was soon joined by Spain and later by Britain but in 2001 was converted into a single company, which is about to become 100 percent owned by EADS after the sale by Britain’s BAE Systems of its 20 percent stakes to EADS.

“It will be painful, yes, because there will be job cuts,” Gallois said.

“There is a lot of work in the factories, in the study centers, but there are structural costs. The structures are too heavy and we have to make it lighter and that will mean problems about the number of jobs, that is certain,” he said.

“We cannot ask everything from one country and nothing of the other,” Gallois said, referring to Germany and France where Airbus has its two assembly lines, although the wings are made in Britain and other components are made in Spain and elsewhere.

“We have to ask questions about the sites, the assembly lines, in order to rationalize it. We cannot live with two sites that each share all the assembly lines. But nothing is decided today, we have several months of study before us before taking decisions,” he added.

There have been media reports recently that Airbus could concentrate the A380 production in Toulouse and the new A350 in Hamburg, but Gallois declined to comment on that.

Gallois said he hoped the EADS board would give its go-ahead for the launch of the planned A350 mid-size passenger aircraft in the next few weeks.

The A350 is aimed at competing with Boeing’s new 787 Dreamliner in a market segment that makes up 40 percent of the total, but Airbus needs 9 to 10 billion euros.

© 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


Discussion comments


Most active discussions

  1. votes comments
  2. votes comments
  3. votes comments
  4. votes comments

Data: Latest rates in the US

Home equity rates View rates in your area
Home equity type Today +/- Chart
$30K HELOC FICO 3.79%
$30K home equity loan FICO 4.99%
$75K home equity loan FICO 4.69%
Credit card rates View more rates
Card type Today +/- Last Week
Low Interest Cards 13.83%
Cash Back Cards 17.80%
Rewards Cards 17.18%
Source: Bankrate.com