Airbus to axe 10,000 jobs under crisis plan 01/03/2007 00:00

TOULOUSE, France, Feb 28, 2007 (AFP) - European aircraft maker Airbus announced 10,000 job cuts and a timetable for slashing its factory network Wednesday, in a bid to solve the growing crisis with its A380 superjumbo jet.

 Airbus said it planned to axe jobs across Europe in the next four years, with 4,300 cuts in France, 3,700 in Germany, 1,600 in Britain and 400 in Spain.

Almost immediately after unveiling its strategy, workers in three factories in Germany downed tools, foreshadowing what is expected to be a bitter struggle between the company and labour organisations.

One of Spain's main unions, the CCOO, also denounced the planned cuts there, calling for a European-wide mobilisation.

"The core objective of Power8 is to make Airbus more efficient and competitive," said the co-chief executives of Airbus parent company EADS, Tom Enders and Louis Gallois in a statement.

Shares in EADS closed up 1.81 percent on the Paris stock exchange at 25.91 euros in a broadly lower market.

The rescue plan, known as Power8, had caused serious political tensions between the French and German governments. That is now expected to give way to a fierce battle between trade unions and company management.

Political wrangling over sharing both future opportunities and the burden of job losses has held up implementation of the scheme since October when the broad outlines of Power8 were first revealed.

The cutbacks are intended to save Airbus 5.0 billion euros (6.6 billion dollars) by 2010 and 2.1 billion euros per year thereafter.

Problems at Airbus, a subsidiary of European group EADS, date back to May 2005 when the company first announced production problems with its A380 superjumbo.

Deliveries of the giant plane, the world's biggest airliner, are now two years behind schedule, putting a severe strain on Airbus's finances and damaging the company's reputation among clients and investors.

Airbus is expected to report an operating loss for 2006, a sharp turnaround in its fortunes after years of bumper profits.

Under the major reorganisation announced on Wednesday, Airbus is to sell off several factories and make greater use of sub-contractors.

Analysts say the plan brings the strategy of Airbus into line with that of its competitor Boeing, which since 2000 has been selling off non-core activities and outsourcing work to so-called industrial partners.

Airbus said it would sell two production sites in Germany and one in France, and set up industrial partnerships for a factory in Germany, another in France and in Britain.

The future A350 mid-size long-haul airliner, a 10-billion-euro project to serve a vital segment of of the airliner market, is to be built at a French factory in Toulouse, southern France.

Fifty percent of the manufacturing of the main structures of the aircraft is to be done by sub-contractors.

In return, Germany is to benefit from increased production of the small A320 family of Airbus planes, the most popular jet and consistent earner for Airbus.

Employees at three Airbus factories in Germany in the towns of Varel, Nordenham and Laupheim stopped work on Wednesday

"We want to show the management that it can't do whatever it likes with us and make us pay for their mistakes," said Martin Schindler, a spokesman for the IG Metall union at Nordenham.

Airbus said that no direct redundancies were envisaged "at the moment," meaning the company plans to rely on early retirement, voluntary departures and job transfers.

German Chancellor Angela Merkel said she regretted the loss of jobs but that "the principle of fair distribution appears to have been respected."

In Britain, Trade and Industry Minister Alistair Darling stressed that wing manufacturing would remain in the country, while in Spain one of the main unions, CCOO, said it believed the country had got off relatively lightly.

As well as the financial strain caused by the A380, a weakening dollar has made Airbus airliners more expensive in international markets.

"The plan will make Airbus better prepared to face the challenge of the US dollar weakness, increased competitive pressure, the financial burden related to the A380 delays, as well as to meet its other future investment needs," Airbus said in a statement.

Copyright AFP

Subject French news