Reply #55: Airbus warns of 'life threat' from weak dollar [View All]

[Ghost Dog]

The weakness of the dollar is threatening the survival of European planemaker Airbus, its chief executive Tom Enders has told employees in Germany.

Mr Enders made the claim as he gave warning that European production plants would have to face major cost cuts to help them to counter the impact of the currency.

“The dollar’s rapid decline is life-threatening for Airbus,” Mr Enders said in a speech. “The dollar exchange rate has gone beyond the pain barrier.”

The calls from the head of Europe's biggest manufacturer will increase the pressure on European ministers and the European Central Bank to take action against the continually weakening dollar.

Nicolas Sarkozy, the French president, has been leading a campaign for a "fairer exchange rate".

The weak dollar is favouring Airbus's arch rival Boeing, the company claimed. The dollar hit a new low against the euro yesterday. In the year to date, the euro has gained about 12.5 per cent against the US currency.

Louis Gallois, chief executive of Airbus's parent company EADS, has said that every 10 cent decline of the dollar costs Airbus €1 billion. Airbus's restructuring plan, brought in last year to counteract the losses caused by delays to the launch of the A380 Superjumbo, was based on a dollar-euro exchange rate of $1.35, but the dollar touched $1.4873 yesterday.

This gives Boeing a massive advantage over Airbus, which is struggling to win back the lead position in aeroplane sales from the American group after it was destabilised and pushed into losses by delays to production of the new aircraft.

/... http://business.timesonline.co.uk/tol/business/industry_sectors/transport/article2928397.ece