Threatened Jobs at Airbus
February 13, 2007
Christian Wulff, premier of Lower Saxony, where four of Airbus's seven German factories are based, did not provide further details about the companies Airbus may be seeking to take over.
Wulff and German Economy Minister Michael Glos held talks in Berlin on Tuesday with Thomas Enders and Jean-Louis Gallois, the co-chief executives of Airbus pan-European parent firm EADS.
The meetings come a week before Airbus is due to announce details of its restructuring plan -- known as "Power 8" -- on Feb. 20. The company has been under pressure to cut costs because of financial losses caused by a two-year delay in its twin-deck A380 jumbo airliner and development problems with the smaller A350 model.
Jobs on the line
Observers fear up to 8,000 jobs may be cut in Germany alone and German politicians have called on Airbus to ensure the job cuts are distributed around a number of countries.
Following the talks, Wulff said all of the participants in the discussion agreed that the process of restructuring had to be handled fairly.
"Germany and France must both be treated equally so that the burden does not fall on one side," he said.
The German government also announced on Tuesday that it would consider supporting the country's struggling aviation suppliers after evaluating the effects of the Airbus restructuring program. Any aid payments would be made on a case-by-case basis, according to the interior ministry.
Wulff's Lower Saxony is home to 12,000 Airbus employees. The aviation giant employs around 57,000 workers at 16 locations around Europe with 23,000 of them in Germany.
Glos had indicated before the meeting that drastic cost-cutting plans by slashing German jobs could jeopardize military contracts and research funds Germany has awarded to Airbus. He said Germany commissioned EADS with the greatest number of military projects.
Glos first threatened such action last week, but this was later played down by Chancellor Angela Merkel and other officials in Germany's ruling coalition.
In addition to making commercial passenger aircraft, EADS subsidiaries also manufacture Eurofighter warplanes, military transporters, helicopters and radar systems.
Sharing the burden
Like Wulff, Glos also insisted that the brunt of restructuring should be shared evenly between Germany and France, the two main Airbus locations.
"We agree that measures have to be taken to regain competitiveness over rival plane makers, but this is a joint venture which wouldn't exist without cooperation between Germany and France," Glos said.
The minister said he wants the plant in Hamburg to remain a production site for the A380 plane. There are rumors that the Airbus management plans to make Toulouse, France the site of the superjumbo's final assembly.
Glos also aimed to move the entire production of Airbus's best-selling A320 plane to Hamburg and said he wants the lion's share of the production of the newly developed A350 model to be produced in Germany, too.
Jumbo delays
The factory in Hamburg, however, is blamed for much of Airbus's operating loss for 2006 after wiring problems there delayed the delivery of the A380 superjumbo by two years.
The backlogs cost parent company EADS some 5 billion euros ($6.5 billion) in profits and triggered a political storm in both Germany and France.
Airbus chief Gallois has refrained from commenting on the Glos' demands or on his own restructuring plans.
Experts, however, said they expect that Airbus will have to scrap a substantial number of jobs, increase sub-contracting and overhaul its production sites.
In 2006, sales at Boeing, the US aircraft manufacturer and Airbus's archrival, surpassed those of Airbus for the first time in five years.
On Tuesday, German airliner Lufthansa announced in a statement that it would be the first to begin testing the Airbus A380 under realistic conditions in March.