Airbus Chief Replaces Head of Troubled A380 Program

Airbus SAS, the world’s biggest planemaker, named a new executive to turn around its ailing A380 super jumbo project.Christian Streiff, who was named chief executive officer of Airbus in July, demoted Charles Champion, 51, and gave the job of running the A380 program to Mario Heinen, 50, who oversaw the A320, Airbus’s best-selling plane program. Mr. Champion will stay at the company as an adviser to Mr. Streiff.The appointment is Mr. Streiff’s first action since the 51-year-old Frenchman was installed after European Aeronautic, Defence & Space Co., Airbus’s parent, said delays will cost as much as 2 billion euros ($2.57 billion) in operating profit. EADS shares have fallen 28% this year, while those of Boeing Co., the second-biggest planemaker, are up 7.4%.“This shows decisiveness on Streiff’s part,” said Zafar Kahn, an analyst at SG Securities in London who has a ‘sell’ on EADS shares. “He’s beginning to show his hand a little, showing that he’s beginning to take control.”EADS stock fell 20 cents, or 0.9%, today to 23.08 euros in Paris, valuing the company at 18.8 billion euros.Mr. Champion, a Frenchman, has been at Airbus or partner companies since 1980. He was managing director of the Future Large Aircraft project from 1995 through 1998. That program resulted in the A400M military transport plane, one of the biggest-pan European aerospace contracts ever.Mr. Heinen, a Luxembourg citizen who was born in Belgium, has run the single-aisle plane program at Airbus for the last four years. He has managed the “extremely successful ramp-up” of production, Airbus said in a statement today. Airbus is now moving toward building 32 of the A320 series planes a month from 28. The series includes the A320, the larger A321, and the smaller A319 and A318.Airbus’s planes are assembled in Toulouse, France, or Hamburg with parts from factories around Europe. The wings of the planes are largely designed and built in the U.K., the cockpit, electronics and parts of the fuselage in France and the tails in Spain. German factories also build parts of the fuselage and wing as well as cabin interiors.Airbus has been the market leader in the global aircraft business since 2003, when it surpassed Boeing in deliveries. Airbus has won more new orders than Boeing in the last five years, though Boeing has been far ahead this year.The American and European governments are engaged in a dispute about aircraft subsidies at the World Trade Organization. America contends that government loans provided for aircraft development to Airbus are unfair, while Europe argues that Boeing wins unfair aid through research grants from the U.S. Defense Department and NASA.Airbus’s management is currently working on a review of the A380 and the preparation for the industrial launch of the twin-aisle, long-range A350, Airbus said in the statement. Mr. Streiff reiterated he will report his findings by the end of September.Mr. Streiff said at the Farnborough Air Show in July that that he planned to study Airbus’s organization to find ways to speed production and reduce costs.Champion’s ouster comes on the day that Airbus for the first time ran a test flight of an A380 with a full passenger load. The company is seeking regulatory certification for the plane by year’s end, with the first delivery scheduled for Singapore Airlines Ltd.at the end of December. The first plane going to Singapore is six months late and most of the aircraft to be delivered next year will be about a year late because of delays installing the wiring.Airbus disclosed September 1 that Mr. Streiff has imposed a hiring freeze at the planemaker, which currently employs 57,000 people. Airbus spokeswoman Barbara Kracht said in an interview that recruitment is on hold until staffing has been reviewed.Mr. Heinen will report to Tom Williams, 54, executive vice president of aircraft programs. Alain Flourens, chief of the company’s Centers of Excellence, was named head of the A320 program and also will report to Mr. Williams.Airbus committed to building the A380 in December 2000 and so far has won orders for 159 planes from 16 customers.The plane was originally slated to cost $10.7 billion as well as another $1 billion for related infrastructure to be built at Toulouse headquarters. By December 2004, EADS disclosed the plane would run 1.45 billion euros over budget.On June 1, 2005, Airbus told airline customers that deliveries of the first A380s might be as much as six months late because of difficulties installing wiring in the aircraft. Initial customers including Singapore Airlines, Emirates and Sydney-based Qantas Airways Ltd. said they would seek compensation from Airbus.Mr. Champion, at a September 2005 briefing, disclosed to journalists that Airbus had shut down the A380 assembly so it could determine specifications and locations for wires and electronics for systems such as lighting and inflight entertainment.He said September 22, 2005, that Airbus had “underestimated the level of engineering effort needed to customize the aircraft” for each airline.EADS revealed in June that the wiring problems were still so extensive that deliveries would be pushed back by an additional six months, leading to delays of at least a year. Airbus has brought hundreds of engineers to the final assembly site in Toulouse to try and cope with the wiring problems, including about 1,000 employees normally based in Hamburg.

Airbus Chief Replaces Head of Troubled A380 Program

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