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Airbus to split 10,000 job cuts with contractors

PARIS: Planemaker Airbus will announce plans to axe 10,000 jobs in four European countries on Wednesday, but will force contractors to share the pain of cuts which could provoke labour unrest, industry sources said.

The plans, which had provoked a political split between France and Germany over the distribution of job losses, mean the European planemaker could limit the impact on its own workforce to some 5,000 jobs or 9 percent of its 55,000 staff. The other half would fall outside Airbus, the sources said.

Most of the total 10,000 jobs at stake are in France and Germany, the two countries where most Airbus production is based and whose representatives share power in parent EADS. Jobs in Britain and Spain are also under threat.

Airbus is also expected to heed calls from political figures including French Prime Minister Dominique de Villepin to avoid forced redundancies weeks before French presidential elections in April and May, sources said.

Unions have threatened strikes over the cutbacks, which are also expected to involve the sale of about a quarter of its 16 factories to Airbus suppliers or private investors.

One factory at Meaulte, northern France, halted production on Tuesday ahead of union meetings on Wednesday, unions said.

“We totally oppose the closure of any site and we won’t accept any firings,” said European Metalworkers Federation head Peter Scherrer after a gathering of Airbus unions on Tuesday.

The restructuring follows a dramatic decline in Airbus’s fortunes in the past year when rival Boeing restored its lead in global aircraft sales for the first time in five years.

Airbus soared in the eyes of European leaders and the public when its A380 superjumbo, the world’s largest airliner, made its maiden flight from its Toulouse headquarters two years ago.

It fell to earth last summer when engineers found the 500 km of wiring on each plane could not be installed on a mass scale.

The error, blamed on software and poor co-operation, pushed back the project two years and cost at least 5 billion euros ($6.6 billion). The crisis was compounded by strategy errors on its next model, the wide-bodied A350, and further declines in the dollar.

French and German leaders bowed to restructuring and agreed last Friday to share job losses as well as future technology. Airbus plans to brief unions on Wednesday at its Toulouse headquarters followed by a news conference.

Core jobs: Observers predicted the planemaker, run by former French railways boss Louis Gallois, would make a maximum effort to ease the headline impact of the cost cuts by balancing the effects between “core” Airbus jobs and outside contractors.

Airbus has 55,000 people on its payroll but its 16 European factories include thousands of other workers employed by outside companies but who work full-time on Airbus premises.

“There will be 10,000 job cuts including half from Airbus and half from the outside contractors,” an industry source told Reuters, asking not to be identified. Airbus declined comment.

It was less easy to predict where the axe would fall between Airbus’s 16 factories despite an agreement between France and German leaders that the pain should be spread fairly.

Airbus is aiming to sell factories, rather than close them, in order to overhaul its production methods for future models and cut costs while continuing to meet its record order backlog.

Most reports say two plants in France and two in Germany will be sold. But the fact that more of the Airbus factories are in Germany has put pressure on Germany to accept a higher proportion of plant sales if the jobs are split roughly evenly.

French and German ministers put a positive spin on the restructuring plans on Tuesday, saying EADS shareholders had agreed on a balanced formula after weeks of damaging tensions.

But the cuts are seen as a blow for the French government, which reported a pause in recent unemployment declines in January, and for German efforts to preserve an upturn in growth.

The French government owns 15 percent of EADS and is part of a pact with French and German industrial shareholders. Although private, they are widely seen as national defenders. reuters

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