Airbus launches cost cuts to 'save 2024' after output woes

PARIS, July 12 (Reuters) — Airbus has launched a program of cost cuts and a freeze on overall headcount to shore up performance at its core planemaking business in 2024 and beyond, weeks after being forced to cut targets for jet production, industry sources said.

Code-named "LEAD!", the new initiative will urgently tackle an increase in costs per aircraft and address deeper productivity issues as the world's largest planemaker braces for the eventual recovery of struggling U.S. rival Boeing.

Some positions may disappear and the overall number of posts will be capped but the company does not plan a "conventional" redundancy plan, planemaking CEO Christian Scherer said in a memo to staff, according to the industry sources.

Costs will be examined "without taboo" but there will be no change of strategy, he added.

An Airbus spokesperson declined to comment on internal memos but confirmed the existence of a performance-improvement plan.

"In view of the continued pressure in the supply chain as well as the overall complex economic situation, there is a need to concentrate our efforts on the fundamentals," the spokesperson said.

In the memo, Scherer predicted that Boeing's ongoing corporate and industrial crisis would force Airbus' main rival to "radically change for the better," the sources said.

He also drew attention to the steady rise of China as a competitor with strong state backing and a big domestic market.

Scherer, who stepped up from chief commercial officer to planemaking CEO in January, blamed "a few of our key suppliers" for recent output problems but acknowledged the company's core industrial activities have also been lagging, the sources said.

Last month, Airbus cut delivery forecasts and slowed its production ramp-up,