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Airplane Maker Restructures Senior Management

March 21, 1989

PARIS (AP) _ Airbus Industrie announced a broad restructuring of senior management Tuesday in an attempt to control costs and get the four-nation airplane- building consortium out of the red.

The manufacturer of the European Airbus said in a statement it was adopting in part the recent recommendations of a panel known as the ″wise men″ of four industrialists who studied ways to streamline the operation.

But Airbus said it is not accepting a proposal to change into a public company, from its current status as a ″group of economic interest″ under French law.

Critics charge that the ″group of economic interest″ arrangement makes it easier for Airbus to hide subsidies from the governments of France, Britain, West Germany and Spain, and harder to know the true state of the operation’s balance sheet.

The issue is important because the U.S. government has accused Airbus of relying unfairly on government subsidies to take market share from competing airplane builders Boeing Co. and McDonnell Douglas Corp. The subsidy issue is one of the resilient disputes in the U.S.-European trade relationship.

Airbus said the supervisory board is to be cut down to five members from the current 17. Jean Pierson will remain as managing director and will head a newly created seven-member executive board.

Other members of the executive board include Heribert Flosdorff of West Germany in the new position of chief operating officer and Robert Smith of Britain in the new position of finance director.

The other four executive board members will be representatives of the four companies in the consortium - Aerospatiale of France, MBB of West Germany, British Aerospace and Casa of Spain.

The Airbus statement said the changes ″will heighten the aircraft manufacturer’s market competitiveness by bringing about a stricter control of program costs and will speed the consortium on the road to profitability.″

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