Airbus chief executive bails out after 100 days

An Airbus A380

FRANKFURT/PARIS - It's not a job for those with career longevity in mind.

European aircraft maker Airbus lost its second chief executive in three months today, after his plan to resolve delays to the A380 superjumbo offended Germany and opened a rift with parent company EADS.

In a statement ending days of speculation, the Franco-German aerospace group said chief executive Christian Streiff had resigned from Airbus with immediate effect and would be replaced by EADS co-chief Louis Gallois.

The resignation plunged the group into fresh turmoil exactly 100 days after Streiff was appointed with a mandate to put Airbus back on course after the turbulence caused by delays to its flagship project to rival Boeing's 747.

"I hope that (my resignation) will provide a salutary shock that forces a rethink about how Airbus is governed," Streiff told France's Le Figaro newspaper.

Gallois used to run France's Aerospatiale, one of the groups that were folded into a merged EADS in 2000. He will retain his role at EADS, where he is co-chief executive alongside Tom Enders, EADS said in a statement.

"The new management structure will allow a leaner more efficient corporate governance and additional cost savings within the EADS group," it said.

An industry source who closely watches EADS said Streiff's position had become untenable after he exposed deep flaws in Airbus's industrial methods and raised the prospect of sensitive job cuts without adequate political cover.

WEAKEST LINK

Germany responded icily to his plans, especially to suggestions Airbus teams in Hamburg were responsible for the wiring installation faults that have pushed the A380 two years behind schedule because of obsolete design software.

Streiff described the Hamburg plant as "the weakest link" in the A380 production process.

Germany could bear the brunt of any factory reorganisation since 10 out of the 16 Airbus European plants are based there.

"This whole affair became too political, too early," the industry source said.

German Finance Minister Peer Steinbrueck hinted at the tensions, telling reporters at a European Union meeting in Luxembourg it was important German factories were treated "equally".

An official close to French President Jacques Chirac said the French and German governments would discuss the situation at EADS at regular bilateral talks in Paris on Thursday.

Shares in EADS ended 1.3 per cent lower at 20.16 euros on Monday, extending losses last week on news of a fresh delay to the first A380 deliveries and a profit warning from EADS.

Streiff said last week Airbus needed a radical cost-cutting plan and industrial streamlining to save 2 billion euros a year because of internal inefficiencies and a weak dollar that benefits demand for planes built by Boeing.

He took over as Airbus head at the beginning of July after earlier delays to the A380 -- then already a year late -- wiped a quarter off EADS shares and led to the resignation of Airbus chief executive Gustav Humbert and EADS co-chief Noel Forgeard.

In a further blow to the company, Airbus reported that it sold just 4 aircraft in September, a lower number of orders than for any month in 2006 or 2005. Boeing has overtaken Airbus in net new orders this year with 723 planes added to its backlog by October 3.

- REUTERS