Saturday, 8 December 2007

Airbus may move production to US as euro soars

Airbus, the European plane maker, is considering plans to relocate production to a new plant in Alabama and other parts in the dollar zone because of the effects of the soaring euro.

As the euro rose marginally against the dollar to $1.46 - three cents off its all-time peak - Gallois called for a new G7 meeting devoted to the euro-dollar exchange rate because "there is a deep crisis in a number of industries solely due to the fact that the Americans are carrying out a policy that translates as the endless fall of the dollar."

Tom Enders, Airbus chief executive, said last month on a French radio that the dollar's weakness was "life-threatening" for the plane maker. EADS says that each 10 cent rise in the value of the dollar costs the group €1bn (£712m) in earnings.

EADS sources confirmed that Airbus could set up a new plant in low-cost Mobile, Alabama, in the southern US for the final assembly of civil aircraft - alongside the A330-based air-to-air refuelling plane for the US air force. "But a precondition would be that we win the tanker contract," they said.

EU finance chiefs, meanwhile, confirmed that the bloc faced economic slowdown because of financial turmoil caused by the US sub-prime crisis.


(Tom Van thienen)

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