Airbus restructuring hit by wrangling among European partners

Airbus has been forced by disagreement between its various European partners to put off announcing a proposed business-restructuring programme that could eliminate 12,000 jobs from the 57000-strong work force.

Squabbling about sharing of future contracts and job cuts broke out between Airbus' parent firm's four consortium partner nations - France, Germany, the UK and Spain - where Airbus factories are located. The aircraft maker has 15 plants in the four European countries.

Airbus' parent firm EADS says Airbus needs to reduce its costs by  €5 billion (Rs 289, 500 crore) by 2010 to boost productivity and make up for the losses caused by delays to the flagship A380 super jumbo project, which has been hit by delays on account of glitches in the 500km of wiring used in each aircraft.

Boeing's European rival says it has shelved plans to reveal a radical restructuring, which was due to have been unveiled today, likely to result in thousands of job losses.

The proposed restructuring has run into flak from elected government officials and unions from all four countries, fearing that plants in their countries could bear the brunt of the proposed job cuts.

Airbus said it had been unable to reach a "consensus" on the restructuring, particularly over which plants in which countries would handle the manufacturing and final assembly of the new A350 plane.

Airbus' main factory is in Toulouse, where it is headquartered and where it employs 11,500 people. Among its German plants, the company employs more than 10,000 staff in Hamburg, where final assembly of three models takes place.

In the UK, it has plants at Filton, near Bristol, and Broughton, in North Wales, employing more than 11,000 staff.

Louis Gallois, chief executive of both Airbus and EADS, said he hoped to resume negotiations on how contracts to build the plane, approved in December 2006, would be shared out in the next few days.