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Is Airbus taking advantage of the crisis to restructure?

2020-07-03T13:54:10.681Z

Sébastien Chenu, spokesperson for the National Rally (RN) said that Airbus was taking advantage of the Covid-19 crisis to "take structural measures".



The question

Airbus announced last Tuesday evening a restructuring plan, the social component of which will cut 15,000 jobs worldwide, out of 135,000 employees. Or 11% of its workforce. These clear cuts mainly concern its Commercial Aviation branch, which employs nearly 90,000 people. This activity was hit hard by the consequences on air traffic of the Covid-19 epidemic. Guillaume Faury, executive president of the European aeronautics giant, justifies this adaptation measure by the need to reconfigure Airbus Commercial Aviation to the loss of 40% of its activity from March, when the virus was sweeping the world . And a crisis in demand for new aircraft which will last at least until 2022.

This plan of historic magnitude is even harder than the previous one, launched in 2008 which resulted in the loss of 5,000 jobs at Airbus and as many at its subcontractors, as part of the Power 8 plan. Europe is paying the heaviest price with 5,100 job cuts in Germany, 5,000 in France, 1,700 in the United Kingdom and 900 in Spain. The balance, or 1,300 other items, is distributed among the manufacturer's other sites in the rest of the world. But Airbus also said it would cut 900 positions in Premium Aerotec, an aerostructures subsidiary in Germany. And it has confirmed job cuts unrelated to the Covid-19 crisis: at Airbus Defense & Space, up to 2,667 positions, and in its German subsidiary Premium Aerotec, up to 900 jobs. In total, Airbus will therefore lose more than 18,567 jobs by the spring of 2021. This very harsh plan has caused great emotion in Europe, especially in France. So, as Sébastien Chenu, spokesperson for the National Rally (RN), claims, is Airbus taking advantage of the Covid-19 crisis to "take structural measures"?

CHECK

The loss of 15,000 jobs at Airbus Aviation Commerciale is directly linked to the consequences of the Covid-19 crisis. By March, air traffic fell by more than 98% and should end 2020 by 55%. For several months, three-quarters of the airliner fleet were grounded to the tarmacs of deserted airports in the wake of containment measures and the closing of borders around the world. Airbus suffered an almost immediate loss of 40% of its activity. Guillaume Faury had to take urgent measures, in particular by reducing aircraft production rates by 40% and by securing a cash line with banks of 15 billion euros. After four months of work and consultation with his customers and subcontractors, he had to take new measures which hit the aircraft manufacturer's living force hard.

These 15,000 job cuts are not structural but cyclical. And they would have been even greater if Airbus had applied the same 40% drop ratio (achieved for production) to employment. The manufacturer would then have announced 36,000 cuts in its workforce. In addition, the social shock must be cushioned by government support measures in Europe, especially in Germany and France. With long-term partial unemployment, as well as the new funds released for research decided in the context of the increase in the budgets of the Council for Civil Aeronautical Research (1.5 billion over three years) in France and LuFo, its equivalent in Germany, Guillaume Faury estimates that up to 3,500 jobs could be saved, including nearly 1,000 engineering jobs. Which would bring the social bill of the crisis to 11,500 jobs.

Concerning the other social measures that affect Premium Aerotec and Airbus Defense & Space, they were decided before the pandemic broke out. The 2,667 layoffs in defense and space are justified by the fall in orders for telecom satellites, a market that has been experiencing an air gap for two years, but also by the delay in contracts for the Eurofighter fighter plane , as well as the distant export prospects for the military transport aircraft A400M.

It is therefore false to say that the Covid-19 crisis is prompting Airbus to take structural measures. It is forced to cut costs due to the air traffic crisis and the demand for new aircraft. Before the pandemic, the aircraft manufacturer was involved in large increases in the rate of production of aircraft, to serve an XXL order book of more than 7,000 aircraft. But the postponements and cancellations of orders will multiply: the airlines whose treasuries are exhausted can no longer afford to buy new aircraft.

Before the Covid-19 crisis, the group struggled to find the skills it needed, especially in the specialized production trades (workers, technicians and engineers). In recent years Airbus, the leading French exporter and leading supplier to the armed forces, has created an average of 1,000 net jobs per year. But he was taken in the rear by the Covid-19 crisis. As for Premium Aerotec, it mainly supplies aerostructures (fuselage elements) for long-haul planes: the German subsidiary suffered, before the pandemic, the slowdown (-20%) of this market.

Finally, it should be remembered that Airbus is committed to avoiding any redundancies. Thierry Baril, the group's HR manager, who is launching negotiations with the unions, has indicated that he would use several levers: natural retirements, voluntary departures, early retirement in particular.

Source: lefigaro

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