The European Aeronautic Defence and Space company EADS, which is the parent of troubled Airbus, was heavily hit by the planemaker’s profit warning and the latest delays to the A380. Co-Chief Executives Louis Gallois and Thomas Enders endorsed the cost-cutting plan proposed by Airbus.
But that did not impress investors. EADS shares tumbled even further; at one stage they fell by more than 12% and they finished the day down over 4%. Industry analyst Julien Quistrebert said: “The market is worrying about the project’s viability, the risk of further penalty payments and Airbus customers possibly cancelling their orders which would heavily hit the EADS group’s income.”
The announcement that the firm will now look for cost savings by consolidating manufacturing sites, had the German and French governments worried about job losses. The French government owns 15% of EADS and Economy Minister Thierry Breton said they support EADS’ recovery plan: “For us as a state shareholder, it is important that now that the problems have been identified that there is a plan of action.”
German Economy Minister Michael Glos urged EADS to be even-handed in streamlining operations. He said: “The unavoidable steps to raise efficiency and lower costs should fall equally on all production sites with any burdens fairly distributed.”