Gallois: Makeover time

Paris, Oct. 10 (Reuters): The new head of European plane maker Airbus said on Tuesday the group’s “baroque” structure needed to be simplified and decisions would be made in the next few months which could lead to “painful” job losses.

Louis Gallois, who took over late on Monday when Christian Streiff resigned after just 100 days in the post, said the fact that he was combining the jobs of Airbus head with his existing role as co-chief executive at Airbus's parent EADS already meant a simplification of the structure.

“There will no longer be potential conflicts between the co-president (chief executive) of EADS and the head of Airbus. That allows a simpler and more unified command structure,” he told Europe 1 radio in an interview in Paris before leaving for the Toulouse headquarters of Airbus.

He said the A380 superjumbo, a double-decked plane for more than 550 passengers which has now been delayed by two years following production bottlenecks, remained a great aircraft.

“There is a problem with the wiring of the cabin. That wiring is done in Saint-Nazaire and Hamburg. The problem is mainly in Hamburg. But this is not a Franco-German problem, this is an Airbus problem,” he said.

Gallois used to run France’s Aerospatiale, one of the groups that merged to become the multinational European Aeronautic Defense And Space Co (EADS) in 2000 and a leading force behind Airbus. He will retain his role at EADS, where he is co-chief executive alongside Tom Enders. Before joining EADS three months ago Gallois led French railways group SNCF.

“It will be painful, yes, because there will be job cuts,” Gallois said. But he said the cuts were more likely to be in administrative and management jobs because the current structure was too heavy and the group needed its blue-collar workers in order to be able to make and deliver its planes.

Gallois said decisions on the Airbus structure would be taken in the next few months while he hoped the EADS board would give its go-ahead for the launch of the planned A350 mid-size passenger aircraft in the next few weeks.

The A350 is aimed at competing with Boeing's new 787 Dreamliner in a market segment that makes up 40 per cent of the total, but Airbus needs 9 billion to 10 billion euros in financing and engineering resources for the new plane.

“EADS has a bit of a baroque structure, with two chairmen of the supervisory board — (Manfred) Bischoff and (Arnaud) Lagardere — and two chief executives ... That is a bit complicated, but that is the result of history,” he said.

He was referring to how EADS was structured to reflect the delicate balance of power between the main French and German partners, while Airbus, EADS's main business, was originally a multinational consortium which shared out work across the nations of its member companies.

“The (restructuring) will inevitably be rigorous and there are two conditions to meet — dialogue and a balance between the various countries.

“We cannot ask everything from one country and nothing of the other,” he said, referring to Germany and France where Airbus has its two assembly lines, although all the wings are made in Britain and other components are made in Spain and elsewhere.

“We have to ask questions about the sites, the assembly lines, in order to rationalise it. We cannot live with two sites that each share all the assembly lines. But nothing is decided today, we have several months of study before us before taking decisions,” he added.

There have been media reports recently that Airbus could concentrate the A380 production in Toulouse and the new A350 in Hamburg, but Gallois declined to comment on that.