Airbus new CEO says job pain on the way

Airbus CEO successor to Christian Streiff who resigned on Monday after only 100 days, says that decisions would be made in the next few months which could lead to “painful” job losses.

Louis Gallois, who took over late on Monday said the fact that he was combining the jobs of Airbus head with his existing role as Co-Chief Executive at Airbus’ parent EADS already meant a simplification of the structure.  He told Europe 1 radio in an interview in Paris before leaving for the Toulouse headquarters of Airbus, “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 added, “The A380 superjumbo, a double-decker plane for more than 550 passengers which has now been delayed by two years following production bottlenecks, remained a great aircraft”.

“There is a problem with the wiring of the cabin with that wiring done in Saint-Nazaire and Hamburg, but the problem is mainly in Hamburg, but this is not a Franco-German problem, this is an Airbus problem,” he said.

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 and before joining EADS three months ago Gallois led French railways group SNCF.

“It will be painful, yes, because there will be job cuts but the cuts are 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”.

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.

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 EUR9 billion to EUR10 billion euros, USD$11.3 billion – USD$12.6 billion in financing and engineering resources for the new plane.

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.

He added that the weak dollar had eroded Airbus’s competitiveness against Boeing and the European group therefore needed to cut its cost base, as planned in the “Power8” plan drawn up by Streiff.

Gallois added 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.

Report by The Mole