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French Politicians Focus on Airbus Before Vote

The French government holds crisis talks on job losses at Airbus on Monday as the ruling right's main candidate in presidential elections heads for Toulouse to build trust with workers on the eve of a strike.


Airbus last week announced 10,000 job cuts, including 4,300 in France, and put plants up for sale, saying the survival of the pan-European company was at stake following the much-delayed launch of its costly A380 superjumbo project.

The restructuring has shaken up the French presidential election race, with Socialist candidate Segolene Royal rushing to meet the unions and suggesting that French regions be allowed into the shareholder pact of Airbus parent EADS.

Royal is herself the head of a region and she is due to meet seven other regional chiefs on Monday morning to discuss ways of entering the EADS capital. That would require a change in a law preventing local authorities from dabbling in private companies.

The rightist government has said politicians should let management sort out the problems, but is anxious to prevent the crisis playing into the hands of their opponents, including Royal and centrist leader Francois Bayrou.

Prime Minister Dominique de Villepin will meet senior ministers and parliamentarians later on Monday to discuss Airbus and plans telephone talks with the French co-chairman and co-CEO of EADS.

Conservative presidential candidate Nicolas Sarkozy will meet union leaders at Airbus headquarters in the afternoon. "The (management) plan is indispensable," French Finance Minister Thierry Breton said in a television interview on

Sunday, in which he appeared to dismiss Royal's call to renegotiate the shareholders' pact to let in the regions. "Airbus does not need liquidity, Airbus today needs a plan to adapt, and visibility on a four-year horizon," he said.

Bayrou is due to meet the unions on Monday morning. On Tuesday, Royal meets German Chancellor Angela Merkel, who opposes letting new shareholders into EADS amid worries that opening the pact could let in potential foreign predators such as Russia.


HANDS TIED


France owns 15% of EADS and its power to intervene is curtailed by a shareholder pact, which was drawn up by a French Socialist government - a fact that has limited Royal's room to criticise the incumbent conservative administration.

Bayrou, who has risen sharply in recent polls and now lies within striking distance of Royal and Sarkozy, said on Sunday European governments should do more to support the company. "The American government did this for Boeing with state sector orders, and it seems to me that European countries should do the same for Airbus," he told Europe 1 radio.

Sarkozy initially distanced himself from Airbus's woes last week, saying the state should not interfere with management. He has since softened his tone, apparently concerned not to appear like a free-market liberal - never a vote winner in France.

At least one newspaper reported on Monday that the presidential frontrunner might call on the state to pump cash into Airbus, just as it did in 2004 to save heavily indebted engineering firm Alstom from collapse.

That rescue package was drawn up by the then finance minister - Sarkozy. Three French unions have called an EADS-wide strike for Tuesday, and Sarkozy will be anxious to avoid a major showdown between management and unions during the election campaign.

Besides Airbus, telecoms equipment maker Alcatel-Lucent has announced it is also planning to reduce staff, with 1,468 job cuts envisaged for France.

France's unemployment rate was 8.6% in January, the lowest level since June 2001, but still much higher than the average 7.4% rate in the 13-nation euro zone.

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