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Union tensions mount as Airbus readies cuts

Union tensions mount as Airbus readies cuts
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First Published: Tue, Feb 27 2007. 07 21 PM IST
Updated: Tue, Feb 27 2007. 07 21 PM IST
Paris: Airbus was at the centre of mounting industrial tensions on 27 February as the European aircraft maker prepared to unveil a long-awaited restructuring programme likely to include thousands of job cuts and the sale of several company sites.
The expected sale of Airbus sites in France, if confirmed, would be taken as a “declaration of war”, the most powerful French Airbus union said, a day before the scheduled announcement.
Airbus called a news conference for 28 February after the board of parent company EADS unanimously approved its “Power8” restructuring plan late 26 February, breaking a weeklong deadlock over the distribution of job cuts and work on future jet programmes between France and Germany.
French Prime Minister Dominique de Villepin has said the Airbus restructuring is likely to lead to 10,000 job cuts, or about 18% of the Airbus work force , as widely reported in the French and German financial press.
EADS gave no information on the planned cuts or production shake-up in its 26 February statement, saying details would be announced only after staff representatives are informed.
Media reports in France and Germany said Airbus now plans to cut 3,500 jobs in France and 4,200 jobs in Germany, and sell two plants in each country. Jobs may also be shed in Britain and Spain.
Among the Airbus facilities seen as most likely to be sold off are French sites in Meaulte and Saint-Nazaire and Germany’s Nordenham and Varel plants.
Force Ouvriere, the strongest Airbus union in France, said it was holding talks with union officials from the other Airbus countries — Germany, Spain and Britain — to prepare for possible industrial action.
“If the Saint-Nazaire or Meaulte sites are closed or sold, Force Ouvriere will take this measures as a declaration of war,” the French union said.
“All of the Airbus unions from across Europe need to get together and get mobilized to sink this plan.”
EADS said the Power8 plan would equip civil airliner division Airbus to “face the challenge of the US dollar weakness” as well as the soaring costs of delays to its flagship double-decker A380 plane.
Airbus has been badly hit by the lower dollar, the currency in which its planes are priced and is expected to shift more of its supplier costs and contract work to dollar-linked economies as part of the restructuring effort.
It also has to fund development of the A350, its euro 11.6 billion (Rs67,874 crore) answer to the runaway success of US rival Boeing Co’s 787 in the lucrative market for long-range, mid-sized planes.
Two years in accumulated delays to the 555-seater A380 have wiped about euro 5 billion off profit forecasts for 2006-10. The Power8 plan seeks to claw back the same figure in savings over the period, generating euro 2.1 billion in annual cost reductions in later years. EADS reaffirmed those targets in its statement.
Airbus CEO Louis Gallois had been forced to postpone the restructuring announcement, originally scheduled last week, after DaimlerChrysler AG, the main German shareholder, blocked the plan at an earlier board meeting on 18 February.
The stalemate ended three days after French President Jacques Chirac and German Chancellor Angela Merkel said after talks near Berlin that the burden of Airbus cuts and the development of future technologies should be shared out fairly between their two countries.
DaimlerChrysler’s 22.5% share of the voting rights in EADS is matched by the combined stake held by the French government and Paris-based Lagardere SCA. Unlike the French state, which owns 15% of EADS, Berlin has no direct stake in the company but leans heavily on decision-making as its largest single defence customer.
Shares of European Aeronautic Defence and Space Co rose as much as 1.7% in early trading on 27 February, before giving up their gains later in the day. By early afternoon in Paris, the stock was down 0.2%.
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First Published: Tue, Feb 27 2007. 07 21 PM IST
More Topics: International News | Europe |