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Airbus chief is set to quit as problems rise; Plans to build new jet model in jeopardy.

Byline: BY DAVID JONES Daily Post Business Staff

REPORTS from Europe last night said the two chief executives of EADS (European Aeronautic Defence and Space Co) have agreed to accept the resignation of Airbus chief executive officer (CEO) Christian Streiff.

An Airbus spokeswoman, however, denied that Streiff was stepping down.

EADS co-CEOs Tom Enders and Louis Gallois have agreed that Streiff should leave the company, a person close to the issue said, several days after he threatened to resign amid a dispute over the transparency of financial and other reporting by Airbus to EADS.

Airbus denied that Streiff was to quit the company.

The latest twist in the saga of the European planemaker comes as doubts have surfaced about two other major Airbus projects in the wake of the troubles afflicting the company's A380 superjumbo.

Airbus parent group EADS says delays and profit warnings surrounding the A380 programme could jeopardise plans to build the mid-sized A350 XWB.

The planemaker also said there was the risk of future delays to the A400M military airlifter it plans to build and the plane would not make money unless costs were cut.

The warning has put management and unions at Airbus's plant at Broughton, near Chester, on alert.

The site makes the wings for the superjumbo, although production of those has been throttled back recently because of A380 final assembly problems in France and Germany, and is hoping to win the contract to build the wings for the extra wide-bodied A350. It will not work on the A400M.

Bruised by a 30% drop in its share price this year, EADS is unwilling to automatically allow Airbus to launch the A350 project until it can be sure it can prevent another crisis unfolding.

Earlier yesterday, EADS co-chief executive Thomas Enders said: "In the next few weeks we will hold in-depth discussions to see whether the financial and engineering resources are available to actually take on this programme. I personally believe in the A350."

After several false starts, Airbus has come up with a new wider design for the A350 to try to halt a surge in sales of American rival Boeing's 787 Dreamliner. The A350 could cost pounds 5.5bn to build, double the original estimates.

Analysts have warned that the financial squeeze caused by the A380 crisis as well as the weaker dollar could compromise EAD's ability to find that much.

The flagship A380, which cost pounds 7bn, is now running two years behind original schedule and Mr Streiff had wanted to restructure the company to streamline industrial processes and cut costs.

Wing plant on alert for new crisis

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The proposed wide-body A350 - its future now looks uncertain
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Title Annotation:Business
Publication:Daily Post (Liverpool, England)
Date:Oct 7, 2006
Words:446
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