PARIS, Feb. 27 -- Whatever the details of the restructuring plan that Airbus expects to unveil Wednesday, one element is clear: Europe's aviation giant can't simply cut its way back to financial health.
The largest unit of European Aeronautic Defence & Space Co. is reeling from costly delays on its A380 super-jumbo jetliner, ballooning investment needs for its planned A350 model and the weak U.S. dollar. But while its full-time workforce of 57,000 is expected to be reduced by about 10,000, most of the drop is expected to come through attrition and spinoffs of factories to outside investors.
Layoffs and factory closures can play only a minor role in the makeover, however, because of constraints of European labor laws -- and because Airbus is raising jetliner output to its highest level ever and developing new models.
The factory spinoff is similar to what rival Boeing has done since 2001.
Downsizing will form one part of the plan, known as Power 8. Less controversial but equally thorny elements include reworking how Airbus designs and builds jetliners, buys components and handles cash. EADS's board of directors late Monday approved the shake-up after a week of public wrangling. Airbus plans Wednesday morning to present details to employees.
Airbus has been battered recently by delays on the super-jumbo, by investment needs for the A350 that have soared to $15.29 billion and, more broadly, by the weak U.S. dollar. Jetliners are priced in dollars, but Airbus incurs many of its costs in the strong euro and British pounds. When the dollar drops by 10 euro cents, Airbus loses 1 billion euros, Airbus chief executive Louis Gallois said recently.
Top EADS managers have said that everything will be on the table in restructuring Airbus -- including Airbus's complex production system that delicately balances the distribution of factory jobs around Europe.