France, Spain ask Airbus to minimise job cuts

European aircraft maker plans to cut 15,000 posts in response to crisis

MADRID/ PARIS:

France and Spain urge Airbus to minimise job cuts after the European aircraft maker announced it was cutting 15,000 posts in response to the gravest crisis the aviation industry has ever seen caused by the coronavirus.

The French government urged Airbus to make as few compulsory redundancies as possible. Separately, Spanish Prime Minister Pedro Sachez said the country had started working with the Airbus to find ways to keep jobs in the country. Speaking to reporters after the reopening of Spain’s border with Portugal, Sanchez highlighted the country’s role in the founding of Airbus and said he hoped to find solutions to retain some jobs.

“We are working with Airbus to find joint lines of work to keep jobs in Spain,” Sanchez said, without elaborating. The aerospace giant on Tuesday announced a global downsizing plan to cope with the airline crisis that followed the months-long grounding of most of the world’s commercial aircraft fleets following the coronavirus crisis.

The company, which is 4% owned by the Spanish government, has said it would lay off about 900 workers in Spain as part of a cut of 15,000 jobs worldwide. Airbus is moving swiftly to counter damage caused by a 40% slump in its €55 billion ($61.8 billion) jet business following the pandemic, balancing belt-tightening against aid offered by European governments and future priorities.

Europe’s biggest aerospace group said it would cut 5,000 posts in France, 5,100 in Germany, 900 in Spain, 1,700 in the UK and 1,300 elsewhere by mid-2021, for a core total of 14,000. The broader tally includes another 900 job cuts planned before the crisis at its Premium Aerotec unit in Germany. “The number of job cuts announced by Airbus is excessive. We expect Airbus to fully use instruments put in place by the government to reduce job cuts,” French finance ministry source said.

Airbus refused to exclude sackings but said it would first seek voluntary departures, early retirements and other measures. It wants to start implementing cuts this autumn and complete them next summer - a brisk deadline for such plans in Europe.

Chief Executive Guillaume Faury said the company had been left with no choice by the dire industry crisis. “It is the reality we have to face and we are trying to give a long-term perspective to Airbus,” he told reporters. Before the coronavirus crisis, Airbus was already planning to cut around 700 jobs in Spain.

Airbus said in April it was reducing output by a third, but has raised that to 40% as it presses the case for job cuts. Sources say the discrepancy reflects different ways of measuring output on a weighted basis, rather than an immediate new cut. “We think we are rather stable now and there will be minor adjustments as we have in normal times,” Faury told Reuters. But he added, “Minor changes can be bigger than seen in past because there is more volatility in the market.”

Exceptional secrecy had surrounded the politically sensitive restructuring affecting jobs in Britain, France, Germany and Spain, the company’s key backers in a fierce contest with US rival Boeing for orders and industrial clout.

About 37% of the 135,000-strong Airbus workforce is due to retire this decade, led by veterans of its best-selling A320. Boeing is cutting over 12,000 US jobs, including 6,770 involuntary layoffs, after the pandemic compounded woes caused by the 15-month-old grounding of its 737 MAX.

Some industry sources say Airbus has all but abandoned a goal of more than doubling services revenue to $10 billion this decade and transferred some staff to other roles.

Published in The Express Tribune, July 2^nd, 2020.

Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.