November 27, 2007 (LPAC)--In a move that will destroy Europe's most advanced research and development sector, the leadership of European Aerospace and Defense and Space Company (EADS) and its Airbus commercial airplane subsidiary are being forced to make draconian cuts, which are "life threatening," due to the decline in the value of the dollar compared to the euro.

On November 23, Airbus CEO Tom Enders said that the company may trim its 2 billion euro ($3 billion) research budget, as a cost-cutting measure. Airbus planes are priced in dollars. On Nov. 27, ATWonline reported that EADS CEO Louis Gallois explained that Airbus loses 1 billion euro in profit for every 10-cent decline in the value of the dollar against the euro. Airbus had announced it is cutting 10,000 jobs after it lost 572 million euros last year, as part of a "restructuring" plan. But that plan was based on a rate of $1.35 to the euro. Gallois told Die Welt that now that the euro is worth $1.48, an additional 1.5 million euro per year must be cut ($2.2 billion), on top of the cumulative 6 billion euro in cuts it had planned, by 2010.

During a speech last week to German labor unions, Gallois said that "the dollar's decline is life-threatening for Airbus," and that European manufacturers may have to move production outside Europe. Enders said that the plan for cuts that they had is "no longer sustainable." EDAS is a conglomerate that was pieced together from some of the highest technology aerospace and defense firms in Europe.