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Airbus to cut 15,000 jobs to survive coronavirus crisis

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06/30/2020 | 07:07pm EDT
Airbus site in Bouguenais

By Julie Rimbert, Johanna Decorse and Tim Hepher

Airbus is cutting 15,000 jobs within a year, including 900 already earmarked in Germany, saying its future is at stake after the coronavirus outbreak paralysed air travel.

Airbus is moving swiftly to counter damage caused by a 40% slump in its 55-billion-euro ($61.8 billion) jet business following the pandemic, balancing belt-tightening against aid offered by European governments and future priorities.

But it faces tough talks with governments as well as unions, which immediately pledged to fight compulsory redundancies. A 2008 restructuring triggered rare strikes and protests.

"It's going to be a mighty battle to save jobs," said Francoise Vallin of the CFE-CGC union.

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.

On June 3, Reuters reported reduced jet output pointed to cuts of 14,000 full-time posts. Earlier on Tuesday, French union sources predicted 15,000 cuts in total.

Britain's Unite union called the measures "industrial vandalism." France's hard-left Force Ouvriere union and others said they would oppose mandatory cuts.

There was immediate political pushback in France, where the government of President Emmanuel Macron this month announced a 15-billion-euro support package for aviation.

"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," a 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.

PRODUCTION OUTLOOK

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 U.S. 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 U.S. jobs, including 6,770 involuntary layoffs, after the pandemic compounded woes caused by the 15-month-old grounding of its 737 MAX.

Airbus' programmes chief said it was slowing a push into after-sales services while maintaining a strategy of diversifying into the high-margin area.

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.

(Reporting by Julie Rimbert, Johanna Decorse and Tim Hepher; Additional reporting by Eric M. Johnson in Seattle, Alistair Smout in London; Writing by Tim Hepher in France; Editing by Richard Lough, Mark Potter and Leslie Adler)

Stocks mentioned in the article
ChangeLast1st jan.
AIRBUS SE 3.18% 67.72 Real-time Quote.-48.10%
BOEING COMPANY (THE) 3.93% 187.91 Delayed Quote.-44.50%
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