EADS Wants To Avoid "Over-Dependence" On Airbus

Louis Gallois, soon-to-be-sole chief executive officer of EADS said the company needs to modify its business model so as to reduce its dependency on Airbus.

Gallois believes the changes are necessary to keep up with the cyclical nature of the aeronautics industry and wants to do it through acquisitions and new developments, according to AFX News Ltd.

"We need to find a way to balance our business portfolio," he said. He didn't rule out the possibility of alliances.

Some possibilities, Gallois said is EADS becoming a satellite operator instead of simply making them or perhaps becoming a fuel provider for military aircraft, according to the Associated Press.

The company is currently in the process of implementing its Power 8 restructuring plan that will, hopefully, slow losses at its Airbus unit.

Recent depreciation of the US dollar -- the currency Airbus sells its aircraft in -- has some saying Power 8 may not be enough. Enders said back in May the plan was just the minimum that needed to be done, and a Euro at $1.40 USD could force additional restructuring.

"Just because the dollar reaches $1.38 for a few days, it doesn't change our life,' Gallois said, adding there is no 'Power 9' plan in the works at this time.

He insisted the plan is currently on schedule and the company will meet its $300 million cost-savings target for 2007, according to AFX.

Gallois is positive about EADS' overall financial condition. The group has "no need for financing at the current time."

The company is currently in negotiations for the sale of Airbus production sites that is part of the restructuring plan, he said. A decision is expected by September with the final contracts signed by the end of this year.

FMI: www.eads.com