Plant Closings, Job Layoffs Likely On The Horizon
ANN REALTIME REPORTING
09.29.06 1130 EDT: Today could be D-Day for Airbus... as
recently named CEO Christian Streiff (right) goes before the board
of parent company EADS to present what many expect will be a broad
restructuring plan, involving significant cuts and other efficiency
measures for the beleaguered European planemaker.
Specifics of the plan aren't known at this time, and it's
unclear if details would be made public following the meeting now
underway in Amsterdam. Many analysts believe Streiff may also
unveil the revamped delivery schedule for the oft-delayed Airbus
A380, as Aero-News reported
The A380 -- the flagship of the Airbus fleet -- has been the
source of significant problems for Airbus this year, following the
announcement of two delays related to wiring issues. The first
delay, announced it June, ultimately resulted in the oustings of
former Airbus CEO Gustav Humbert... and EADS co-chairman Noel
Last week, Airbus confirmed rumors of what could amount to a
significant delivery delay -- the third such postponement to strike
the program. Both delays announced this year are due to unresolved
issues with the customized wiring Airbus offers to customers of the
superjumbo jet. Airbus has yet to tell those customers -- including
Emirates, Lufthansa, and launch customer Singapore Airlines -- how
long that delay may be.
Though by far the largest target -- in more ways than one -- the
problems facing Airbus are not limited to the A380. The planemaker
has also been hit with setbacks this year regarding its A400M
military aircraft... as well as a costly redesign of its upcoming
A350, to better position the plane against its chief rival,
CBS Marketwatch reports brokerage firm Goldman Sachs estimates
those delays and redesigns could amount to a 4.3 billion Euro ($5.4
billion US) hit for Airbus... as well as probable plant closings,
and job layoffs.
"Long-term restructuring could be radical," the broker said. "We
believe Airbus need to sell up to seven of its 16 European sites to
reduce substantially its vertical integration and future demand for
R&D, capex and working capital."
We'll see... but it appears Airbus will soon see some
significant changes. Stay tuned.