French PM promises action over Airbus delays

24-08-2006

French prime minister Dominique de Villepin has pledged that his government will "take all necessary steps" to resolve Airbus A380 production delays.

Mr de Villepin also apologised for describing the leader of France's socialist party as a "coward" after the opposition accused the government of failing to take action to help ensure delivery of the superjumbo - the project again having been postponed by Airbus' parent company, European Aeronautic Defence and Space (EADS) company.

Following the comments, which caused uproar in the French parliament on Tuesday, Mr de Villepin told MPs: "The government is determined to take all necessary steps to ensure EADS resolves its production delays and supplies its clients in the best manner."

"There are urgent decisions to take. They will be taken."

He added that France's finance minister Thierry Breton was preparing the steps in liaison with the government's French and European partners in EADS, which has both German and French shareholders.

The French government, which owns 15 per cent of EADS, is under increasing pressure to take action following its announcement last week that delays in the delivery of the A380 superjumbo could cost the company €2 billion (£1.4 billion) over the next four years.

EADS, which owns 80 per cent of Airbus, saw 26 per cent slashed off its share price following the announcement.

The Franco-German company also faces allegations of insider dealing after its joint chief executive Noël Forgeard was criticised by shareholders for making a €2.3 million profit on the sale of EADS shares in March. The sale came shortly before Mr Forgeard announced that the firm was aware that there were problems with the A380 programme, which has been delayed as a result of problems installing complicated wiring needed to support various systems in the giant planes.

Reports suggest that steps being considered by the French government to resolve the crisis include a possible revision of a Franco-German pact which prevents state interference in the operational management of Airbus.

Such a move could lead to a clash with the German government, which has warned that the problems facing Airbus are industrial ones that require industrial solutions.

French officials have said that the need to re-examine the six-year-old shareholder pact had occurred due to the decision of British aerospace company BAE Systems to sell its 20 per cent stake in Airbus.


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