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Action

After the difficulties of 2006, EADS has a clear set of objectives. Firstly, to resolve the challenges that crystallised during the year. Secondly, we aim to achieve renewed growth. The issues are clear. Difficulties surrounding industrialisation of the A380 double-decker weighed heavily on EBIT for 2006, and created a weighty financial burden that is likely to affect the Group for many years to come. Added to this, a large proportion of our revenues – almost 90% in the case of Airbus – are booked in US dollar, a currency which has lost 40% of its value since the launch of the A380 programme. This gives us a distinct competitive disadvantage, both now and in the future. Finally, it became clear that we would have to speed up aircraft development times in order to bring the new A350XWB next-generation, medium-capacity aircraft into production sufficiently swiftly. While these issues centre on Airbus, all five Divisions are taking action to solve them.

We have moved swiftly to restructure and integrate Airbus. The Power8 restructuring has been designed and launched. Between now and 2010, it aims to save €5 billion in cash, and from 2010 onwards, to achieve annual cost savings of €2 billion. This will restore Airbus’s competitiveness. It will do so by maximising cash, speeding up new aircraft development, sustaining technological progress at the rate and level that is now necessary, cutting costs and improving our efficiency. In particular, Power8 will help to finance the A350XWB product development programme. But improvement measures are not limited to Airbus. Across the wider Group, we are redoubling our efforts to increase integration. The functions of Finance, Research & Technology, Sourcing and Human Resources are being centralised, creating greater control, coordination and economies of scale. We have frozen all management salaries and will cut staffing levels at Group headquarters by 10% by the end of 2007. These economies will not be popular, but they are essential. Above all, EADS now has a singular purpose that reaches across all of its Divisions. From now on, our motto will be “no surprises, no hiding, no dreaming”. We need to break down outdated thinking habits, streamline the organisation, and combat the national issues that once were taboo. We are going to shape EADS into a truly integrated enterprise. With the help of Power8 and integration, we will strengthen EADS’ leading role in international markets. Stated more succinctly, we are steering the right course.

Testing in a clean room by Astrium