Paris Air Show

Airbus takes need for job cuts to its workers

 - June 19, 2007, 10:51 PM

Desperately keen to present a positive image here at Le Bourget following the past two years’ industrial troubles, Airbus is working to ensure the support of production-line workers for its proposals to rationalize the business. Airbus plans to improve earnings before interest and tax by a cumulative $6.6 billion during by 2010 and to generate an additional $2.8 billion annual revenue from 2010.

The move to win over workers had an inauspicious start on June 6 after Airbus presented the “new, simplified and streamlined” structure to its European Works Council. Employees at three German sites earmarked for disposal went on strike in protest to the plans, but the manufacturer claimed to expect no consequent impact on production.

Dubbed Power8, the restructure aims to improve and rationalize internal company processes after September, making Airbus “a real architect and integrator in airliner development,” according to chief executive Louis Gallois. This month Airbus is continuing negotiations that began in May with partner countries France, Germany, Spain and the UK to agree appropriate “social measures” to compensate for proposed job losses over the next four years.

As part of the rationalization, Airbus proposes disposal of six factories: two in France, three German plants and a single British unit. While no decisions had been made by last week, more than a dozen companies have reportedly expressed interest in possible acquisition of various sites.

Under the Power8 plan, operations, programs and procurement functions will become “transnational.” Within Operations, so-called “centers of excellence” will concentrate on fuselage and cabin, wing and pylon (strut), aft fuselage and empennage and aerostructures responsibilities. Each will involve work performed in more than one Airbus partner country.

The programs function will deal with customers’ noncommercial needs, final assembly and cabin definition and installation, and includes the right to intervene between airlines and factories in delivery commitments.

Airbus finance and personnel organizations are to be combined with other key functions, although social relations, tax obligations and other specific country-related issues will be handled locally through “national representatives.”

Procurement will be trans-national with materials for all partner countries being obtained from single sources in line with Airbus policy to reduce numbers of first-tier suppliers and to gain greater industrial control. Accordingly, this month Airbus has signed a “commitment charter” aimed at enhancing long-term supply-base links.

Under the scheme, suppliers are to become more integrated in Airbus aircraft development, from design to “after-life” recycling and will receive greater visibility in the manufacturer’s planning processes. The company is to advise on creation of a network of Tier One partners that will share investment and costs.

Globally, Airbus has joined a United Nations initiative that aims to bring together corporate business with UN agencies, civil society, and government in attempts to advance 10 human-rights, labor, environment and anticorruption principles.