Revamp of Airbus could be scrapped

FEARS ARE growing that the restructuring of Airbus Industrie, the European aircraft manufacturer, may be further delayed or even abandoned altogether in favour of modifications to its existing structure.

The four partners in the consortium, which includes British Aerospace, are thought to be considering a fall-back plan whereby Airbus remains as a Groupement D'Interet Economique but with greater commercial powers.

The plan to convert Airbus into a single corporate entity run on conventional commercial lines, with shareholders as opposed to industrial partners, is already at least a year behind schedule. The intention had been to convert to the new structure at the start of this year but the process could now be delayed until 2001.

The French partner, Aerospatiale, stopped the conversion plans in their tracks last year in protest at the proposed merger between BAe and the German partner, DaimlerChrysler.

Although that has been abandoned in favour of a BAe-GEC Marconi merger, the preparations cannot resume until Aerospatiale is privatised this summer. The possible privatisation of the Spanish partner, Casa, may also complicate timing.

One source said: "The four partners are like children squabbling over the family jewels and who will inherit what. Much of the trust has gone and that is causing big, big problems."

One option would be to retain the GIE structure but give Airbus in Toulouse increased freedom in areas such as purchasing and product support.

At present each partner is responsible for purchasing its own supplies and deciding how work on the various Airbus programmes should be subcontracted. This has been blamed for reducing the efficiency of the consortium.

Jurgen Schrempp, the chairman of DaimlerChrysler, warned last week that the merger of BAe and GEC Marconi had killed off the dream of a single European Aerospace and Defence Company.

However, his opposite number at Aerospatiale, Yves Michot, maintains that, in the long term, Airbus is not viable on its own and must come under the umbrella of a wider civil and defence grouping.