June 8, 2018 / 7:04 PM / a year ago

Airbus to seek CSeries efficiencies across the board: exec

PARIS (Reuters) - Airbus SE (AIR.PA) will seek efficiencies across the board after taking on Bombardier Inc’s (BBDb.TO) struggling CSeries jet program but is not looking for an adversarial relationship with parts makers, one of its senior executives said.

The European planemaker and Canada’s Bombardier have finalised an agreement for Airbus to take control of the CSeries in an effort to rescue the venture through its marketing and cost-cutting muscle.

“We are looking ultimately to end up in a better position in the overall cost of the CSeries, whether it comes through the supply chain or whether it comes through efficiencies in building the aircraft,” Airbus Americas Chairman Jeff Knittel told Reuters.

“There are lots of ways to do that and we will be looking at every one of those.”

Asked to explain the rationale of the CSeries deal, Knittel said: “It is really the power of Airbus: in terms of its sales force, in terms of marketing and in terms of operating leverage. We can run factories, we think, very efficiently.”

People familiar with the plan say Airbus is preparing to battle engine and systems maker United Technologies Corp (UTX.N) over the price of components and services. UTC will have a large slice of the CSeries program by value after completing its $23 billion acquisition of Rockwell Collins Inc COL.N.

Knittel declined to discuss individual suppliers but suggested that Airbus would demand concessions in return for the far larger amounts it spends on parts compared with Bombardier, including $17 billion a year in the United States alone.

“You would expect that someone who spends that type of money has better leverage than someone who spends less, and I’ll leave it at that,” he said.

“We are not looking for an adversarial relationship with the supply chain. We are looking to put ourselves ... and the supply chain in a position where we sell more planes.”

Airbus Finance Director Harald Wilhelm said on Friday he saw “great potential” to increase the competitiveness and efficiency of the CSeries by addressing costs, helping to generate cash.

Reporting by Tim Hepher in Paris; Editing by David Goodman and Matthew Lewis

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