Airbus to cut its number of suppliers by 80 per cent

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The Independent Online

The European plane maker Airbus, hit by costly delays for its A380 superjumbo and trying to reduce costs in the face of a lower dollar, will cut the number of its suppliers from 3,000 to around 500, a spokesman said yesterday.

"I can confirm the number of suppliers that will be cut, but for the time being I do not have any information on who will be cut and how the cuts will be made," the spokesman said.

Airbus's parent company, EADS, is to report nine-month earnings tomorrow.

Last week, EADS appointed Eurocopter's Fabrice Bregier as chief operating officer at Airbus and EADS finance director Hans-Peter Ring became finance director at the unit.

This completed a top management overhaul started earlier in October when EADS co-chief executive Louis Gallois took the chief executive seat at Airbus.

M. Gallois has said that the Toulouse-based Airbus needed to cut costs to become more competitive in the face of a weaker dollar and eliminate duplication, created out of a four-nation consortium with Germany, France, Great Britain and Spain.

He has said the cost cuts were urgently needed to allow for the launch of another new plane - the long-range A350.

Delays in the Airbus A380 superjumbo have forced EADS, which has dual headquarters in Munich and Paris, to consider changing the way it manufactures large commercial jets. Berlin fears substantial job cuts in Germany.

On Friday the German Chancellor, Angela Merkel, failed to produce a plan to secure new German investors in EADS after meeting the European aerospace firm's chiefs, but said Berlin wanted to keep the German-French balance of power within the group.

Germany is concerned that a move by founding EADS shareholder DaimlerChrysler to reduce its stake in the Airbus parent could diminish German influence in the company just as it is about to push through substantial cost cuts.

Last month, EADS bought back a 20 per cent stake in itself from BAE Systems for €2.75bn (£1.84bn). EADS had 2005 sales of €34.2bn and employed 113,000.