Restructuring Setback for EADS
Airbus Fails to Sell French Factories
European aerospace giant EADS is having difficulty selling factories that belong to its troubled Airbus subsidiary. After the collapse of talks to sell three German plants, negotiations have also failed in the sale of two French plants, the company says.
After delays in its A380 super jumbo program led to massive losses, European aerospace giant EADS sought to cut costs and stem the flow of red ink. Plans in 2007 included selling a number of factories at its Airbus subsidiary as part of its restructuring effort. Those plans, though, appear to have run aground in Germany and France, where the company is having trouble finding buyers.
On Wednesday, European aerospace and defense company EADS released a statement admitting it had suspended negotiations for the sale of two factories belonging to its Airbus subsidiary. The company said that Airbus and French aerospace supplier Latecoere ended talks over the sale of Airbus factories in Méaulte and Saint Nazaire Ville without any deal. EADS said a "viable solution could not be finalized within the required time frame, in particular due to the current difficult financial environment."
The company's press release followed a report in the French financial daily Les Echos on Wednesday claiming the talks had collapsed, "as in Germany because of the devaluation of the dollar against the euro." As part of its "Power 8" restructuring program announced in 2007, Airbus plans to sell six of its plants. In March, the company unsuccessfully ended talks with Germany's MT Aerospace over the sale of Airbus plants in the German cities of Varel, Nordenham and Augsburg. For now, the company has said, the factories will remain property of Airbus parent company EADS.
The company said in a statement that the decision doesn't change EADS' site divestment strategy. Until it can find buyers, EADS is creating a new unit for unsold factories like those at Varel, Nordenham and Augsburg, to prepare them for a later sale.
The company said it would continue with negotiations over the sale of plants in the British town of Filton and Germany's Laupheim, with a deal expected within a few weeks. Despite the setback, Airbus parent company EADS said it still expected to meet its earnings and savings forecast for 2008.