10 September 2008 | Paul Snell
Aircraft manufacturer Airbus is to expand its savings plan to achieve a further ?650 million (£521 million) in cost reduction.
The European plane builder launched its Power8 cost cutting programme in October 2006 to improve cash flow, counter the weak dollar and become more competitive with its rivals. The initial plan called for annual savings of just over ?2 billion (£1.6 billion) by 2010.
But yesterday the firm said it believed extra savings, under the newly dubbed Power8+ plan, could be made by doing more engineering and manufacturing work in house, which would account for around ?300 million (£241 million). The other additional ?350 million (£281 million) would be achieved by extending the current plan for another two years, from 2010 to 2012. The firm said it did not see any need for further job losses, as happened under Power8.
Tom Enders, president and CEO of Airbus, said in a statement: "Power8 is the centre piece in Airbus' restructuring and integration efforts and we have been very successful in achieving our targets so far. However, further measures to improve our cost base and overall efficiency are necessary to secure the long-term competitiveness of our company."
Last year Airbus took steps to boost its supplier relationships with a commitment charter promising long-term cooperation with its vendors. In March this year Louis Gallois, chief executive at EADS, the owner of Airbus, said the firm would begin paying its suppliers in dollars to help it remain competitive (News, March 2008).