THE A380 IS LIKE THE GIULIANI CANDIDACY:

EADS execs told how to cut costs (Toby Sterling, 5/05/07, The Associated Press)

"If you want to reduce your work force, you should start with yourself," said Errol Keyner, representing the Dutch shareholders' organization VEB. "One CEO, one chairman, that's how you lead by example."

Lagardere said that EADS' dual-board system wasn't to blame for the company's troubles, but "I'm not saying that the group structure will stay the way it is for the next century."

French co-Chief Executive Louis Gallois said outsourcing more work to suppliers — like Boeing does — would help the company share risks and lower costs.

He said EADS' sales would likely fall in 2007 due to the weaker dollar, and it would have a negative cash flow of also around $1.4 billion due to more losses at Airbus. He predicted a profit in 2008.

In response to a question from a German shareholder, Gallois said high-profile cancellations by Federal Express and UPS for the A380 were "disappointing" but the situation was "not that bad."

"We have kept [most of] our customers and we are beginning again the campaign to sell the airplane, but to sell it we have to show that we can deliver," he said.

He confirmed that the number of A380s the company will need to sell to break even on the project has risen due to the delays, but declined to give specifics. Last year the company said it needed to sell around 420 of the planes to break even; current orders are 156 at last count.

"Sometimes I feel that the competition between the A350 and Boeing's 787 is already lost," said a woman who identified herself as Miriam Lange.

Meanwhile, they're eventually going to just cancel the A380 program.

Posted by Orrin Judd at May 5, 2007 12:00 AM