Airbus Chief: A380 and A350 Assembly Could Be Concentrated in Toulouse

Airbus is considering a transfer of A380 production work to France from Germany, and assembly of a planned A350 mid-sized jet could also be based at Toulouse, Chief Executive Christian Streiff said in an interview published Thursday.

Streiff's comments, in an interview with French daily Le Monde, could raise concern among German unions already fearful that the A380 superjumbo's production crisis could lead to cuts in Germany as work is concentrated at one site to save time and transportation costs.

Asked whether he planned to transfer A380 work to the Toulouse headquarters from Hamburg - where Airbus currently has an A380 paintshop, cabin-fitting plant and delivery center - Streiff said: "Everything's possible but nothing's decided. I'm looking at all ideas."

Production changes will be discussed with workers and decided "in the best interest of Airbus," he said, within three or for months.

Airbus, which stunned investors in June by doubling the A380's production delay to one year, doubled it again to two years this week and said the accumulated holdups would wipe a total euro4.8 billion (US$6.1 billion) off operating profit for parent company EADS - whose shares have fallen more than 38 percent from their March 13 peak.

"It will take us about 10 years to catch up with Boeing in terms of development and efficiency," Streiff also said in his interview.

EADS is buying out the 20 percent of Airbus it does not already own from Britain's BAE Systems PLC, after BAE's shareholders voted Wednesday to approve the euro2.75 billion (US$3.5 billion) sale.

Analysts warn that the financial squeeze on EADS, exacerbated by the weaker U.S. dollar, could compromise its ability to fund the planned Airbus A350 XWB, an euro8 billion (US$10 billion) mid-sized jet program designed to compete with U.S. rival Boeing Co.'s 787 Dreamliner.

EADS co-Chief Executive Tom Enders confirmed during a news conference in Germany that the A350's future could be in doubt.

"We will discuss intensively in the next weeks whether we have the financial and engineering resources to actually take on this program," Enders said, before adding: "I personally believe in the A350 program."

The new A350, announced at July's Farnborough Air Show, is "crucial to the development of Airbus," Streiff also said in his newspaper interview. "It's difficult to imagine being absent from a segment that represents 40 percent of the market by value."

Airbus would seek to assemble the A350 at one of its existing plants rather than investing in a new one, Streiff also said. "We could imagine assembling it in Toulouse and transferring the A330 and A340 to Hamburg," he said, referring to the Airbus widebody jets already in production.

Shares in European Aeronautic Defence and Space Co. fell 3 percent to euro21.07 (US$26.73) in Paris trading.


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