Germany says dollar serious problem for Airbus

By Claudia Kade and Dave Graham

BERLIN (Reuters) - The weakness of the dollar is a "serious problem" for European planemaker Airbus and may cause the company major headaches before too long, Germany's aerospace coordinator Peter Hintze said on Friday.

"The dollar weakness is a serious problem for Airbus because sales in the planemaking industry are done in dollars," Hintze, who is also a junior economy minister, told Reuters.

"Even if it's to be assumed that thanks to currency hedging the dollar weakness is not yet hitting the firm with full force, considerable problems may arise in the medium to long term."

Hintze was speaking a day after Airbus chief executive Tom Enders said the weak dollar was threatening the firm's survival.

Germany's VDMA engineering industry association said orders and profits at firms were already suffering due to the strength of the euro, which hit a new high of nearly $1.50 on Friday.

A spokeswoman from the Economy Ministry said it was up to Airbus, not Germany, to assess what impact the greenback's weakness against the euro had on a firm's outlook.

"It's obvious the euro exchange rate brings a certain cost pressure with it," she said. "That's a logical consequence. But otherwise the firm must assess its own situation itself."

Airbus is already shedding some 10,000 jobs and selling plants as part of a restructuring plan after delays to its A380 superjumbo drove the company into a loss last year. Airbus complains the weak dollar favours U.S. rival Boeing (BA.N).

Workers at the firm, owned by European aerospace and defence group EADS (EAD.PA), had to prepare for further major cost cuts to help counter the impact of the currency, Enders said.

Aerospace coordinator Hintze added that he hoped the firm would clear up by the end of this year what exactly would happen with the planned sale of a number of Airbus plants in Germany.

INDUSTRY SUFFERING

The dollar slumped to a record low against the European single currency on Friday amid growing expectations that the U.S. Federal Reserve will cut interest rates again next month.

The German Economy Ministry said it had no comment on the euro reaching another new high.

On Thursday, Chancellor Angela Merkel said the euro could pose problems for German exports and that Germany was working internationally for currency rates to be balanced sensibly.

There are concerns that weaker global growth, particularly in the United States, will erode Germany's export potential, and the Finance Ministry said on Thursday that recent falls in German firms' export expectations may partly reflect this.