Airbus cutting 10,000 jobs
Toulouse, France-headquartered aircraft manufacturer Airbus Wednesday announced plans to cut 10,000 jobs across Europe as it seeks to claw back losses arising from the delay to its A380 'super-jumbo' and the weakening U.S. dollar.
The 'Power8' restructuring plan was given the all-clear by the board of Airbus' Franco-German parent company EADS (European Aeronautic, Defence & Space Co.) on Monday.
Airbus' total workforce comprises 57,000 direct employees plus 30,000 subcontractors at 17 sites across the continent.
France will be the hardest hit with 4,300 job losses, followed by Germany, 3,700; the United Kingdom, 1,600; and Spain, 400.
Airbus will immediately get rid of about 5,000 temporary staff and on-site subcontractors, but said that it will not force the remaining redundancies. It did add that it will have to consider 'other measures' if the expected level of reductions are not achieved within the next 12 to 18 months.
The job cuts will cost Airbus 680 million euros ($900 million) to be taken in the first quarter but the manufacturer hopes the plan will see it return pre-tax profits of 2.1 billion euros ($2.8 billion) from 2010 onwards and additional 5 billion euros ($6.6 billion) of cumulative cash flow through to 2010.
'The core objective of the program is to make Airbus more efficient and competitive, so as to produce the most advanced and profitable products, and to serve its customers better in the future,' said Tom Enders and Louis Gallois, EADS's chief executive officers, in a statement.
Aside from the spiraling costs related to the delay to the A380, Airbus said the weakness of the dollar has damaged its competitiveness. Since Airbus officially launched the A380 project on Dec. 19, 2000, the dollar's value against the euro has fallen about 33 percent. 'We cannot continue to produce at our current euro costs and sell at Boeing's dollar prices,' said Gallois, who is also Airbus' president and CEO.
'We have had an excellent sales and delivery performance in 2006. But our long-term future is at stake if we don't act now,' he added.
Among other aspects of the plan, Airbus is looking for investment partners and buyers for some of its sites and will initiate a freeze on new hiring and executive salaries in 2007.