EADS would face cost hit in euro zone collapse -CEO


European aerospace and defence company EADS would have to rethink its cost structure if the euro zone collapsed and Europe returned to a system of national currencies, outgoing Chief Executive Louis Gallois said.
“We want to keep the euro because we work in Germany, France and Spain. Our industrial plan is based on the assumption of a common currency,” he was quoted as saying in an interview with German weekly paper Welt am Sonntag.
“In theory, we could work with three different currencies again but would have to rethink our cost structure. The deutschmark would probably become very strong, the franc and the peseta would weaken.”

EADS has a high exposure to currency fluctuations because it generates more than half of its revenues in U.S. dollars while incurring most costs in euros, and to a lesser extent in British pounds. It has major production sites in France, Germany, Spain and Britain, Reuters reports.

Gallois, who will be replaced by Tom Enders at the end of this month, warned that an exit of Greece from the euro zone would increase the risk of contagion to countries in the bloc.
“The crisis has worsened. There is a risk that Greece will exit the euro zone. That could lead to a domino effect,” he said.
“Nobody knows exactly how to exit a common currency. But an exit would certainly carry very high costs,” he said.