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Fury as Airbus axes 10,000 jobs

Story Highlights

• Airbus announces 10,000 jobs to go
• Staff cuts will hit operations in France, UK, Spain and Germany
• CEO blames weak dollar and spiraling cost
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(CNN) -- Airbus confirmed Wednesday that it will cut 10,000 jobs across its European operations as it struggled against a weak dollar and costly delays to its flagship A380 superjumbo.

German Airbus workers were disbelieving and furious as the Franco-German planemaker said thousands of jobs would be axed at three German plants to cut costs.

The European plane maker said it will sell or close facilities at Saint-Nazaire-Ville in France and Germany's Nordenham and Varel. Operations at Filton in Britain, Meaulte in France and Nordenham in Germany would be thrown open to investors.

CEO Louis Gallois said the four-year restructuring plan would see 3,700 jobs go from Germany, 4,300 from France, 1,600 from the United Kingdom, and 400 from Spain.

Gallois said Airbus had been hit hard by the weak dollar, the currency in which it trades its planes, but was also burdened by high costs, poor communication and inefficiency.

Development costs for the A380 -- the Airbus superjumbo project that has been beset by major delays -- had placed a significant drain on the company, Gallois said.

It also has also struggled to shoulder development of the A350, its $15.3 billion answer to the U.S. rival Boeing's 787 in the lucrative mid-sized jet market.

Airbus parent company EADS said in a separate statement that it will take a charge of $900 million in the first quarter of 2007, reflecting Airbus restructuring costs.

The announcements confirmed Airbus' so-called "Power8" restructuring program first outlined last year after a two-year production setback to the A380 wiped $6.6 billion of profit forecasts for 2006-2010.

Gallois said the overhaul would see Airbus spin off some of its manufacturing operations, allowing it to lower overheads while consolidating its main aircraft assembly operations.

Final assembly of the A350 will be based in France, Gallois said, instead of being split between Germany and France as programs traditionally have been.

An extra A320 final assembly line will be opened in Germany and a future revamp of the single-aisle plane will be assembled in Hamburg.

The CEO cited communication problems between nations involved in the pan-European manufacturer as governments put their own agendas ahead of the company's interests.

"National conflicts are poison for Airbus," Gallois said. "We have to be careful not to be more interested in with national interests than the future of Airbus."

In Germany, the IG Metall Union called the Laupheim decision the "wrong one" and planned protests Thursday to show its displeasure.

"We won't stand idly by, watching as our site is sold off piecemeal," IG Metall delegate Michael Braun told reporters, according to The Associated Press.

"I couldn't believe the news. I just couldn't believe it," Joachim Gramberg told Reuters as he walked off his shift at the Varel Airbus plant -- one of three in Europe set to be closed down.

"We used to build 200 planes a year when we were doing great and now we are even making 438 a year and it's still the end."

Copyright 2007 CNN. All rights reserved.This material may not be published, broadcast, rewritten, or redistributed. Associated Press contributed to this report.

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