Airbus may extend 35-hour work week: report
02-27-2007, 10:35 AM
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Unions prepare to fight Airbus job cuts
BRUSSELS (Reuters) - Airbus unions threatened strikes over job cuts at the troubled planemaker on Tuesday, dampening efforts by European governments to calm the fears of its 55,000 staff on the eve of a key restructuring plan.
The plan to cut 2 billion euros ($2.6 billion) in annual costs is expected to trigger job losses and the sale of up to four factories in France and Germany, with jobs in Spain and Britain also at risk.
Industry sources said Airbus was likely to cut 5,000 jobs and axe another 5,000 filled by contractors, respecting a widely trailed target of 10,000 while limiting the impact on its staff.
"We fear it is serious that 10,000 jobs will be lost," European Metalworkers Federation head Peter Scherrer said after a conclave of unions from four countries in Brussels.
Their joint strategy "includes strikes," Scherrer said.
His federation includes Germany's IG Metall union, which is reported to have deep coffers for a challenge against plans that have already triggered demonstrations in Germany.
EADS <EAD.PA> subsidiary Airbus said it would brief unions on Wednesday followed by a news conference at 1400 GMT.
Airbus sold fewer planes than rival Boeing Co <BA.N> for the first time in five years in 2006 after delays to its A380 superjumbo and strategy errors over its mid-sized A350.
It has also been weakened by falls in the dollar.
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 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.
That scenario could explain an upbeat tone from several officials who had previously sharply criticized the plans.
"All the signs suggest it's a good solution in which the Franco-German balance is preserved and as many jobs as possible are saved at the parent company," German Economy Minister Michael Glos told Reuters at a European Union meeting.
FACTORIES VS JOBS
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.
Jobs are a major issue especially in France, which is eight weeks away from presidential elections. French Prime Minister Dominique de Villepin said last week Airbus would cut 10,000 jobs but ruled out sackings.
The French government owns 15 percent of EADS and is part of a pact with French and German industrial shareholders.
French Finance Minister Thierry Breton said the Airbus crisis demonstrated the impact of swings in the value of the euro, which has shot up against the dollar and yen since the A380 was designed.
"The first reason for the implementation of this (restructuring) plan stems from the fact that there was a euro-dollar differential that had to be integrated into the cost of production," Breton told reporters at European Union talks.
Rival Boeing outsources part of its work to Japan, prompting some economists to study the extra currency uplift it gets against the strong euro from the yen as well as the dollar.
Power8, first announced last October, calls for annual cost savings of at least 2 billion euros from 2010, 5 billion euros in cash savings by then, and faster development.
Wednesday's announcement is expected to spell out how it achieves all of that, though industry officials and analysts say questions will remain, especially if the Franco-German company opts to tread lightly with French elections just weeks away.
EADS shares closed down 1.8 percent at 25.45 euros, cushioned from a 3 percent fall in the French overall market.
The plan to cut 2 billion euros ($2.6 billion) in annual costs is expected to trigger job losses and the sale of up to four factories in France and Germany, with jobs in Spain and Britain also at risk.
Industry sources said Airbus was likely to cut 5,000 jobs and axe another 5,000 filled by contractors, respecting a widely trailed target of 10,000 while limiting the impact on its staff.
"We fear it is serious that 10,000 jobs will be lost," European Metalworkers Federation head Peter Scherrer said after a conclave of unions from four countries in Brussels.
Their joint strategy "includes strikes," Scherrer said.
His federation includes Germany's IG Metall union, which is reported to have deep coffers for a challenge against plans that have already triggered demonstrations in Germany.
EADS <EAD.PA> subsidiary Airbus said it would brief unions on Wednesday followed by a news conference at 1400 GMT.
Airbus sold fewer planes than rival Boeing Co <BA.N> for the first time in five years in 2006 after delays to its A380 superjumbo and strategy errors over its mid-sized A350.
It has also been weakened by falls in the dollar.
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 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.
That scenario could explain an upbeat tone from several officials who had previously sharply criticized the plans.
"All the signs suggest it's a good solution in which the Franco-German balance is preserved and as many jobs as possible are saved at the parent company," German Economy Minister Michael Glos told Reuters at a European Union meeting.
FACTORIES VS JOBS
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.
Jobs are a major issue especially in France, which is eight weeks away from presidential elections. French Prime Minister Dominique de Villepin said last week Airbus would cut 10,000 jobs but ruled out sackings.
The French government owns 15 percent of EADS and is part of a pact with French and German industrial shareholders.
French Finance Minister Thierry Breton said the Airbus crisis demonstrated the impact of swings in the value of the euro, which has shot up against the dollar and yen since the A380 was designed.
"The first reason for the implementation of this (restructuring) plan stems from the fact that there was a euro-dollar differential that had to be integrated into the cost of production," Breton told reporters at European Union talks.
Rival Boeing outsources part of its work to Japan, prompting some economists to study the extra currency uplift it gets against the strong euro from the yen as well as the dollar.
Power8, first announced last October, calls for annual cost savings of at least 2 billion euros from 2010, 5 billion euros in cash savings by then, and faster development.
Wednesday's announcement is expected to spell out how it achieves all of that, though industry officials and analysts say questions will remain, especially if the Franco-German company opts to tread lightly with French elections just weeks away.
EADS shares closed down 1.8 percent at 25.45 euros, cushioned from a 3 percent fall in the French overall market.
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