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The Honolulu Advertiser
Posted on: Tuesday, October 10, 2006

Airbus head Streiff resigns post

By Marilyn Adams
USA Today

Troubled European airplane builder Airbus was hit by more turmoil yesterday when its new CEO quit, saying he was not given autonomy to do the job.

Airbus parent European Aeronautic Defence and Space announced Airbus CEO Christian Streiff's resignation and said its French co-CEO, Louis Gallois, 62, will become Airbus CEO immediately.

Gallois is a former French government minister with experience running a railroad and an airplane manufacturer.

Streiff told employees in an e-mail that he left because the CEO job lacks the autonomy "to lead Airbus through the crisis successfully."

His resignation came three months after taking the job and less than a week after unveiling an ambitious turnaround plan. Airbus has lost ground in sales and innovation to Boeing.

Last week, France-based Airbus announced a third big delay in production of its A380 superjumbo jet. The A380 is 22 months behind schedule, forcing EADS to cut profit forecasts by about $3.6 billion.

EADS said the eight-point Airbus turnaround plan will go forward. It calls for cutting operating costs, conserving cash and speeding the development of new models and production.

The company also said it will make a decision in coming weeks on a costly redesign of the Airbus midsize A350. The jet, which has attracted few buyers, is its response to Boeing's hot-selling 787 Dreamliner.

Streiff's resignation had been rumored since last weekend. EADS, which owns 80 percent of Airbus, had expressed a desire to have more oversight over Airbus. The company said the new management structure will bring "leaner, more efficient corporate governance and ... additional cost savings within the EADS group."

U.S. analysts disagreed. Aerospace analyst Richard Aboulafia of the Teal Group in Fairfax, Va., called the leadership change a "step backward" for Airbus. He said Streiff represented reform that Airbus needs to succeed.

"It's a PR disaster," said aerospace consultant Scott Hamilton of Leeham Co. in Seattle. EADS' complex governance structure needs to be reformed, and both companies need to be free of French and German government meddling, he said.