Some dollar-zone output may help Airbus

By Iain Rogers and Klaus Lauer

BERLIN (Reuters) - European planemaker Airbus <EAD.PA> must keep most of its production in Europe, but it may make sense to consider moving some output to the U.S. dollar zone, a deputy German economy minister said on Tuesday.

"From a corporate perspective, it can certainly be worth considering moving some production to the dollar zone," Deputy Economy Minister Walther Otremba said in an interview.

"But one thing is clear: Airbus is a European company, and the lion's share of production must be undertaken in Europe.

"The reason Airbus has been given state support is not least to keep technological know-how and the accompanying highly qualified jobs in Europe."

Airbus is heavily exposed to weakness in the U.S. dollar and has said it may need to adjust a restructuring plan drawn up on the basis of a euro at $1.35. The currency is now near $1.49.

The company is in talks to sell six factories to national players in Britain, France and Germany and is discussing whether to buy back parts from those factories in dollars instead of euros.

Louis Gallois, chief executive of Airbus parent EADS, said last week suppliers would have to move part of their sourcing to the dollar zone to remain competitive.

But after an outcry in France over Airbus offshoring proposals, he stressed this would not mean more European job cuts, since production as a whole was still increasing.

Otremba said Airbus was on the right track with its restructuring plan, known as Power8.

"All sides recognize that there is still need for some adjustment," he said.

"In the longer term, we will have to deal with the question of how Airbus can remain competitive."

Gallois said last week the planemaker's overhaul, which aims to produce annual savings of 2.1 billion euros ($3.12 billion) by 2010, was producing results ahead of schedule, but added it was early days.

(Editing by Will Waterman)