Airbus details restructuring plan
Major shake-up will slash 10,000 jobs
Union reaction to the announcement was predictable. According to the BBC, European Metalworkers Federation head Peter Scherrer said: "We totally oppose the closure of any site and we won't accept any firings." French workers yesterday "downed tools in protest at the firm's plans".
Political feedback was mixed. German Chancellor Angela Merkel said she regretted the job losses but added that Power8 ensured "a balanced distribution of risks and opportunities" across various Airbus sites.
French presidential candidate Segolene Royal announced she would "seek to freeze the job cuts if elected", while her opponent Nicolas Sarkozy said politicians should "stay out of the company's affairs".
In the UK, where over 10 per cent of jobs at the Airbus's factories in Filton, Bristol, and Broughton, North Wales are for the off, Tony Blair chose to herald a new contract which will see the Filton plant work on part of the wing of the wide-bodied Airbus A350. This would add "valuable new capability" to Britain's aerospace industry, he said.
Airbus admitted it had suffered a "financial burden related to the A380 delays" (estimated losses run at €5bn), but also fingered external financial pressures for its woes. It said "the dollar weakness alone has led to a 20 per cent loss of competitiveness in only six years versus Airbus' competition". Gallois stressed: "We cannot continue to produce at our current euro costs and sell at Boeing's dollar prices."
Accordingly, Airbus management declared it would "implement strong cost reduction and cash generating efforts leading to EBIT (Earnings Before Interest and Tax) contributions of €2.1bn from 2010 onwards and additional €5bn of cumulative cash flow from 2007 to 2010".
As well as the 10,000 redundancies, which Airbus said would account for a large part of cost-cutting measures, the company announced further lines of attack including "a temporary hiring freeze, an executive salary freeze for 2007, as well as significant cuts in general expenses", a "reduction of cycle time of new aircraft development from 7.5 to six years", plus leaner, meaner production methods leading to a 16 per cent increase in productivity by 2010.