PARIS – Airbus warned Friday that the euro’s rise against the U.S. dollar could force the company to seek an extra $1.4 billion in cost cuts or savings.
Chief Operating Officer Fabrice Bregier, Airbus’ No. 2, said in a radio interview that the cost-saving plan launched earlier this year was based on a euro-dollar exchange rate of $1.35.
“If the euro were to remain lastingly above $1.40, well obviously we’d have to adjust,” he said in an interview with BFM radio.
The euro rose above $1.41 for the first time Friday.
Designed to make Airbus more competitive with its American rival Boeing Co., the restructuring program known as Power8 is supposed to recoup 2 billion euros ($2.81 billion) through the sale or closure of some of Airbus’ production facilities together and a headcount reduction of about 10,000.
Bregier said the savings target would have to be 1 billion euros larger if the exchange rate reaches $1.45.
Bregier said Airbus’ competitive disadvantage from the exchange rate “is starting to be realized at the political level, and that’s very important.”
Airbus will have to increase its purchasing from dollar-based suppliers, to the detriment of those in Europe, Bregier said. Another option would be to relocate production outside the euro zone, he said.
At the moment, many of Airbus’ costs are in euros while it sells in dollars. Louis Gallois, chief executive of Airbus parent EADS, has said in the past that every 10-cent rise in the euro against the dollar costs the company 1 billion euros ($1.4 billion).
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