The board of Airbus parent EADS is expected on Tuesday to decide on a cost cutting programme and assess the impact of the latest delay in its A380 superjumbo plane, which one newspaper report said could now slow 2007 deliveries to just two aircraft.
Airbus said in June it expected to deliver nine A380s next year, down from an original target of 20 to 25. It said last month there would be fresh delays, but declined to be more specific pending the outcome of the board meeting.
A spokeswoman confirmed the company's board would meet on Tuesday, after holding an inconclusive session on Friday, but declined to comment on details. The La Tribune newspaper said the board would meet by videoconference.
An announcement from the firm may have to wait until Wednesday, however, as a meeting is scheduled then with the company's works council and managers.
According to La Tribune, EADS is due to announce it will shift the bulk of A380 production to its Toulouse factory in France. In compensation, its German factory in Hamburg will take over production of the A320 single aisle aircraft and play a lead role in building the new A350 mid sized model which is due to be launched soon.
But Les Echos newspaper said an overhaul of the production process, proposed by new Airbus Chief Executive Christian Streiff four days ago, was seen as too drastic by the company's main shareholders.
DaimlerChrysler has a 22.5 percent stake in EADS, the French state holds 15 percent and Lagardere has 7.5 percent.
The paper said Streiff had threatened to resign if his plan was rejected. EADS had no comment.
Trade union sources told Reuters on Friday that the cost savings envisaged by Streiff could be as much as 2 billion euros (1.4 billion pounds) by simplifying the production process.
The work is currently spread out over the former Airbus consortium's founder member's countries with a fleet of special 'Beluga' transport planes ferrying parts between plants.
Germany and France are very sensitive about the geographical spread of plane production due to the high numbers of jobs involved. EADS in Hamburg has fought a long battle with environmentalists to extend the plant's runway specifically to be able to take part in the A380 project.
TIMETABLE FOR A380
The second delay in A380 deliveries, announced in June, not only revealed industrial difficulties at Airbus but also a management problem at EADS which re opened French German tension.
Streiff and new EADS co CEO Louis Gallois were brought in and the company announced a new revamp of its long mooted A350 dubbed the XWB for extra wide body, signalling a break with the past.
But on Sept 21, after an audit by Streiff of all Airbus programmes, Airbus announced a third delay to the A380 without giving a new timetable.
The June delay triggered a 26 percent drop in EADS shares after the company said the setback would cost it 2 billion euros between 2007 and 2010.
Airbus is expected to maintain the delivery of the first A380 to Singapore Airlines this year but it is unclear what will happen in 2007.
La Tribune said deliveries of the plane, which can seat 555 passengers in a three class layout, would be limited to two or three in 2007.
On Tuesday EADS shares were down 1.3 percent at 22.11 euros by 09:45 GMT (10:45 a.m. British time) in a generally weaker French market. The share price has fallen some 30 percent since the beginning of the year.