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Job cuts waiting in the wings

Stephen Beard Feb 20, 2007
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TEXT OF INTERVIEW

SCOTT JAGOW: European plane maker Airbus was supposed to make a big restructuring announcement today, but that’s been canceled. Our man in Europe, Stephen Beard is on the line with us. Stephen, what happened?

STEPHEN BEARD: Well there are some big job cuts looming here, 10,000, possibly 12,000 jobs are going to go but youa€™ve got four countries involved in the project — Germany, France, Spain and Britain — and they simply could not agree as to which country would suffer which job cuts. The Germans in particular felt they were bearing the brunt of this restructuring and said, ‘we’re not signing up to it, we do not agree.’

JAGOW: Any idea how they intend to resolve this problem?

BEARD: No they will continue wrangling. They’re losing money and the main problem is the super-jumbo, the A380. They’ve hit major technical problems with it and airlines that ordered this plane are demanding and getting compensation from Airbus. In addition to that, Airbus has to deal with a strong Euro, which makes its planes much more expensive than Boeing’s planes, which are sold in dollars. So Airbus really has got to make these big cuts and they’ve got to start making them pretty soon.

JAGOW: I guess this all goes back to the original problem that Airbus has had, which was that France and Germany created this company together and over the years they’ve had nationalistic issues to work with.

BEARD: That is absolutely the problem at the heart of this company. If this was a commercial organization run solely on commercial lines, they’d make a decision and they’d implement it fast. Commercial and industrial logic may dictate one course of action but national pride may dictate another.

JAGOW: OK Stephen, thank you.

BEARD: OK Scott.

JAGOW: Our European correspondent Stephen Beard in London.

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