Airbus to cut 15,000 jobs to survive coronavirus crisis

TOULOUSE, France / PARIS (Reuters) – Airbus (AIR.PA) unveiled plans to cut 15,000 jobs within a year, including 900 already planned in Germany, on Tuesday, saying its future is at stake after the Corona virus outbreak paralyzed air traffic.

The Airbus logo is pictured at the entrance to the Airbus plant in Bouguenais near Nantes, France, on June 30, 2020. REUTERS / Stephane Mahe

Airbus is taking swift action to address the damage caused by a 40 percent drop in its jet business ($ 61.8 billion) after the pandemic.

However, the aircraft manufacturer faces tough talks with governments and unions who have immediately committed to tackle the mandatory layoffs. Restructuring in 2008 sparked rare strikes and some protests.

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

Europe's largest aerospace company has announced that it will cut 5,000 jobs in France, 5,100 in Germany, 900 in Spain, 1,700 in the UK and 1,300 in other countries by mid-2021, which corresponds to a core figure of 14,000.

The total number includes another 900 jobs that were cut in the Premium AEROTEC unit in Germany before the crisis.

On June 3, Reuters reported that Airbus' reduced jet performance indicated cuts to 14,000 full-time jobs. French union sources had predicted a total of 15,000 cuts on Tuesday.

The British Union Unite called the measures "industrial vandalism". France's left-wing Force Ouvriere and others said they would oppose mandatory cuts.

There was an immediate political setback in France when President Emmanuel Macron's government announced a € 15 billion package to support aviation weeks earlier.

“The job cuts announced by Airbus are too high. We expect Airbus to make full use of the government’s tools to reduce job cuts, ”said a source from the Treasury Department.

Airbus refused to rule out layoffs, but said it would initially seek voluntary departures, early retirement, and other measures. The goal is an agreement on job cuts by 2021, which is seen as a timely deadline for such plans in Europe.

Chief Executive Guillaume Faury said the unprecedented crisis left the company with no choice.

"It is the reality we have to face and we are trying to give Airbus a long-term perspective," he told reporters.

OUTPUT ADJUSTMENTS

Airbus announced in April that it would cut its production by a third, but has increased it to 40% as it pushes for job cuts. The discrepancy reflects different methods of measuring output based on the amount of work, and not a new reduction in output.

But Faury said Airbus would most likely make further minor adjustments without giving details.

The politically sensitive restructuring in Great Britain, France, Germany and Spain, which the company's main supporters fought in fierce competition with US rival Boeing (PROHIBITION) for orders and industrial clout.

Around 37% of Airbus’s 135,000 employees will retire this decade, led by veterans of the best-selling A320.

FILE PHOTO: A general view outside the Airbus plant in Broughton after the onset of coronavirus disease (COVID-19), UK, May 14, 2020. REUTERS / Phil Noble / File Photo

Boeing announced last month that more than 12,000 U.S. jobs were being cut, including 6,770 involuntary layoffs, after the pandemic compounded the problems with the creation of the 737 MAX, which is fighting the latest version of the A320.

Airbus’s program director also said the aircraft manufacturer is slowing customer service advancement but maintaining a strategy of diversifying into the high-margin area.

However, some industry sources say that Airbus has almost given up on the goal of doubling sales of services to $ 10 billion this decade, moving some employees to other roles.

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

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