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Bringing up Airbus

Kyle James Oct 16, 2006


SCOTT JAGOW: Airbus was born in 1970. Its parents were a European couple, France and Germany. The two countries are very proud of what their company has become. Airbus grew into a serious competitor for American plane-maker Boeing. But at age 36, Airbus has landed in big trouble. So much trouble, that DaimlerChrysler wants to get rid of its stock in Airbus. Like a concerned parent, the German government is scrambling to find a solution. Kyle James reports from Berlin.

KYLE JAMES: Airbus has been sent reeling by delays in its A380 super-jumbo jet.

Now the company is planning $2 billion in cost cuts. That’s alarmed some German politicians, who fear massive layoffs.

Several German states have offered to step in to help stabilize the company and maintain German influence, but the co-chair of Airbus parent EADS, Tom Enders, has said he doesn’t want the government getting involved.

Zafar Kahn is an aerospace analyst for SG Securities.

ZAFAR KAHN: The company management would like a free hand in making commercial decisions and with these state holdings, there is interference, there is a political angle, which the management always has to take into consideration.

Kahn says the Airbus situation is serious, but that Boeing had similar problems with the production issues in the nineties and weathered the storm.

In Berlin, I’m Kyle James for Marketplace.

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