FRANCE: The new head of European plane maker Airbus Louis Gallois says the group's "baroque" structure needed to be simplified and decisions would be made in the next few months which could lead to "painful" job losses.

The new head of European plane maker Airbus said on Tuesday (October 10) the group's "baroque" structure needed to be simplified and decisions would be made in the next few months which could lead to "painful" job losses. Louis Gallois, who took over late on Monday (October 9) 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. Gallois said during a Europe 1 radio interview in Paris that a "simpler and more unified command structure" would be put in place to avoid potential conflicts between the co-president (chief executive) of EADS and the head of Airbus. Gallois used to run France's Aerospatiale, one of the groups that merged to become the multinational European Aeronautic Defence 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. Gallois said there would be painful job cuts, but added cuts were more likely to be in administrative and management jobs because the current structure was too heavy and the group needed its blue-collar workers in order to be able to make and deliver its planes. But the General Workers Confederation Union (CGT) co-ordinator for the EADS Group, Jean-Jacques Devigne, said priorities will need to change if the troubled plane maker is to pull out of difficult times and it will take more than the current plan. "The delay of the A380 is the result of this plan which will generate surcharges. Airbus and EADS board of directors do not wish to put into question the objectives of financial profitability, that is to say: having margins above 10 percent. So they will try, by all means, to get this figure by reorganising Airbus with a plan which already existed in the days of Forgeard (Former Airbus CEA). This plan was the rationalisation of the sites, job cuts, cost cuts and the reduction of the structure. So, we are scared by these objectives which were at the time suggested by Mr. Forgeard and now by Mr Gallois and Mr. Streiff. They all want to satisfy the shareholders," said Devigne. Gallois said decisions on the Airbus structure would be taken in the next few months, while 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. Airbus planes are made from parts supplied by France, Germany, Britain and Spain, reflecting the balance of industrial power and expertise in Europe at the time Airbus was created. Gallois said he hoped that French President Jacques Chirac and German Chancellor Angela Merkel would pledge their support for the company at a Franco-German meeting later this week.

ITN Source | October 10, 2006

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