Airbus Chief Warns on Job Losses

Louis Gallois, the new chief executive of Airbus, warned today there would be "painful" job cuts at the European plane-maker in the months ahead as he implements the €2bn annual cost-savings bequeathed by his short-lived predecessor, Christian Streiff.

As British union officials prepared for talks in Toulouse on Thursday on the future of UK plants at Broughton, north Wales, and Bristol, Mr Gallois told French radio the job cuts would be mainly in back office and management layers.

EADS, owner of Airbus, has endorsed the Mr Streiff's plans to cut overheads by 30% and raise engineering productivity by 20% but Mr Gallois, who remains a co-chief at the parent group, has already indicated that any job losses would hit temporary or part-time staff and component suppliers rather than production workers.

But Airbus is under pressure to close several of its 16 European plants as it shifts output to the cheaper dollar zone - to China, India and Russia as well as the US itself.

Such moves are unlikely until 2007 but, meanwhile, Airbus is drawing up radical plans to concentrate production of planes in one plant rather than share it around between several countries. Both these changes will affect thousands of jobs.