Airbus Grounded: The Border in the Board Room - DER SPIEGEL
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Airbus Grounded The Border in the Board Room

For a company that advertises itself as a business, the wrangling over the future of Airbus has taken on decidedly political overtones of late. The French-German border runs across the board-room table.
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Those hoping for a quick end to the squabbling in the top echelons of Airbus are likely to be disappointed. That, at least, seems to be the message from the small bits of bickering that have leaked out as the multi-national -- some might say multi-nationalist -- company searches for agreement on a far-reaching cost-cutting plan.

On Tuesday, Arnaud Lagardère, the chairman of the board at Airbus's parent company, sprinkled a bit more fuel on the already raging fire by telling the French daily Le Monde: "As far as I and the French who I represent are concerned, we will defend French Airbus interests without compromise." In other words, a German-French consortium is all well and good, but national borders run right through the company management.

At issue, of course, is the Airbus aim of pushing through a cost-cutting program -- called "Power8" -- designed to save the company up to €2 billion annually in coming years. Where cuts are going to be made, however, remains a mystery. Tuesday's scheduled unveiling of "Power8" was cancelled amid disagreement about some of the measures the plan called for. Even the apparent confirmation by French Prime Minister Dominique de Villepin that 10,000 jobs (18 percent of the Airbus workforce) were being cut is something of a chimera. If that's the case, said German EADS co-head Thomas Enders, "then Villepin knows more than I do."

In Berlin, German politicians joined the fray as well. "We need to ensure that the French, who practice a very interventionist industrial policy, do not come out of the process as the only winners," said Rainer Wend, a spokesman for the German Social Democrats.

Just how much Villepin actually knows and Berlin actually does, of course, is beside the point. The greater problem is that management problems at Europe's aerospace giant have escalated into a very political cross-border tit-for-tat. The much-anticipated savings program -- necessary to make up for the estimated €5 billion cut in profits from 2006 to 2010 incurred as a result of the two-year delay in deliveries of the brand-new super-jumbo A380 -- has provided a venue for both France and Germany to voice dissatisfactions about how they stand in this supposed partnership of equals.

Particularly galling for the Germans is French Airbus chief Louis Gallois's desire to base most of the manufacturing facilities for the new A350 -- designed to compete with Boeing's massively successful long-distance 787 Dreamliner -- outside of Germany. So far, minority shareholder DaimlerChrysler has rejected the proposal, though Germany, at present, does not have the technological capabilities to manufacture the carbon-composite fuselage panels necessary for the A350. Enders complained on Monday that "the future industrial and technological core activities have to be shared in a fair and balanced way."

According to a Tuesday report in Germany's online publication manager magazin, however, the dispute also encompasses other models as well. Should the A350 -- the development of which is projected to cost some €11.6 billion -- be primarily based in France, German managers were expecting to receive the production of the popular A320 as compensation. Related models A318, A319 and A321 are already assembled in Hamburg and economic analysts have said that bundling the similar models together makes good economic sense. Gallois, according to the magazine, refused. Enders has denied the report.

Just when the political wrangling might come to an end remains an open question. French President Jacques Chirac is scheduled to meet with German Chancellor Angela Merkel on Friday near Berlin. The meeting was originally intended as a set up to the March European Union summit. Now, Airbus will likely be a large part of the discussions.

And the company needs to put aside its political difficulties soon so it can focus on its economic difficulties. The problems with the A380, which have put back deliveries of the giant by two years, have reportedly been solved, but the losses, both monetarily and in terms of reputation, have been immense. The company was also taken by surprise by the success of Boeing's 787 and are scrambling to catch up after having fallen behind Boeing again in airplane sales last year. As if to highlight the company's problems, British Airways on Wednesday said it had ordered four Boeing aircraft to boost its fleet -- deciding against Airbus 330s.

Lost in the debate, of course, are Airbus workers on both sides of the border who remain unsure about their job security. Unions in both France and Germany have said they will fight any job cuts. But the real trouble, say workers, is the waiting. "I thought we would at last have clarity now -- and then everything opened up again," Sebastian Kubiak, an Airbus electrician who works on A380s in Hamburg, told Associated Press on Tuesday. "We all want to know finally whether the big bird is staying in Hamburg and what will happen with the A350."

He's not the only one.

cgh/ap

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