Translated material
EADS scared of reforms
Airbus restructuring program postponed
The European aircraft manufacturing concern EADS , which has been the subject of negative news in recent months, yesterday again found itself in the center of public attention. Yesterday, Airbus , which is part of the concern, announced that the EADS board of directors interrupted the discussion of the Power 8 program, which should determine the principles of restructuring the aircraft manufacturing enterprise. The council meeting will continue in the coming days, not to discuss Power 8, but, as the report said, “to find an agreement regarding the interstate division of work associated with the A350 XWB.”The Power 8 program, proposed by the head of Airbus, the Frenchman Louis Galois , included, among other things, a reduction in annual expenses by 2.1 billion euros by 2010 and large-scale layoffs (about 10,000 employees of the concern in Germany and France). The project to begin production of the A350 XWB long-haul passenger aircraft was approved by EADS management in December.
Unlike the top managers of the parent and subsidiary concerns, who expect to “rationalize” thousands of jobs thanks to the restructuring program, labor collectives take their disagreement with the prospect of being outside the gates of the enterprises into the street. Recently, powerful demonstrations of protest against the Power 8 program took place in the German cities of Hamburg, Bremen, Varel, as well as the Swabian Laupheim in southern Germany, where - for now - there are production sites for Airbuses. According to the largest German trade union, IG Metall, more than 24 thousand people took part in protests against radical restructuring plans. Similar performances also took place in France - in Toulouse, Nantes and Saint-Nazaire.
But Louis Galois yesterday did not hide his emotions about the indecision of shareholders. “I have made proposals that I believe are balanced from both an operational and a technical point of view and are consistent with our goal of economic competitiveness. I would like these proposals to lead to the agreement that we so badly need. Airbus can no longer delay the implementation of the Power 8 program. It is natural that employees strongly want to know how the future of their company and their own future will be shaped,” he was quoted as saying in an Airbus press release.
Investors, however, did not succumb to the emotions of Louis Galois. On the contrary, they liked the actions of the EADS board of directors: in London, the concern's shares rose in price by 2.84%, in Frankfurt by 2.39%.
According to Power 8, management costs should be reduced by a third, and the production process should become more “rational”. For this purpose, it was planned to review its distribution among individual plants, including the closure of some of them. But that's not all. In connection with the crisis situation surrounding the production of the A380 aircraft created by Airbus, it was planned to pay special attention to finding new sources of financing - in other words, to attracting additional investor-shareholders or loans.
Apparently, the fate of the European Airbus manufacturer is currently entirely in the hands of politicians. The German Federal Government refuses to make any comments on the situation. EADS spokesman Michael Hauger noted that all cuts should be “fairly” distributed among all participants. As for when an agreement can be expected between the politicians of both countries, Michael Hauger said that this will happen, “maybe somewhere at the end of February.”
For now, everything will maintain its status quo. Last weekend, Airbus management decided to maintain the previous division of labor in the production of the large-body A380 aircraft. This “superjumbo”, which caused damage to its manufacturers in the amount of about 4.8 billion euros, will, as before, be assembled and produced in Toulouse, France and Hamburg, Germany.
DaimlerChrysler Corporation owns 22.32% of EADS shares, the French government and its controlled Lagardere each own 15%, of which the company has put up 7.5% of shares for sale. Another 5.4% of shares belong to the Spanish state holding SEPI. The remaining shares are traded on the stock market. A small part is divided between management and investment funds. Vneshtorgbank acquired about 5% of EADS shares last year.
Qatar's investment fund Qatar Investment Authority is considering the possibility of acquiring up to 10% of EADS shares, the head of the fund, Sheikh Hamad bin Jassim bin Jaber al-Thani, said in an interview with Bloomberg. According to him, interest in EADS is due to the fact that after several years of decline, the concern's shares are undervalued. He said that the fund has already held preliminary discussions with EADS representatives. "If we decide the price is right, we can buy up to 10%," al-Thani said, declining to say what price Qatar Investment is willing to pay for the shares. Qatar Investment does not disclose information about its portfolio. According to Pacific Investment Management, in the middle of last year the fund managed assets worth $40 billion. INTERFAX