Air­bus’s Bri­tish staff will share the blow as aero­space gi­ant wields axe

Up to 1,700 UK jobs will be lost as France, Spain and Ger­many also pay a high price, finds Alan Tovey ‘We are look­ing at the work­load on our work­force. There is no Brexit or in­flu­ence of any na­ture’

The Daily Telegraph - Business - - Business -

Cyn­ics have de­scribed Air­bus as a suc­cess­ful Euro­pean jobs cre­ation pro­gramme driven by pol­i­tics, which also hap­pens to build air­lin­ers.

Bring­ing to­gether the UK, France, Ger­many and Spain as part­ner na­tions in the pan-Euro­pean plane maker has of­ten led to po­lit­i­cal in­fight­ing and ten­sions, yet the com­pany has emerged as the leader in the global air­liner du­op­oly, much to US ri­val Boe­ing’s an­noy­ance.

Those cyn­ics also joke that the mir­a­cle of flight is only sur­passed by the mir­a­cle that Air­bus has lasted so long. Such hu­mour is of lit­tle com­fort to the 15,000 Air­bus staff who will lose their jobs as the com­pany down­sizes in the face of what chief ex­ec­u­tive Guil­laume Faury calls “the gravest cri­sis the in­dus­try has ever faced”.

Across all its di­vi­sions – which in­clude he­li­copters, de­fence and space – Air­bus has about 134,000 staff, but the air­liner busi­ness is by far the largest, em­ploy­ing 90,000 peo­ple.

All the 15,000 jobs un­der threat are in the air­liner busi­ness, which Faury said had seen “40pc of its com­mer­cial ac­tiv­ity dis­ap­pear” be­cause of the air travel col­lapse caused by Covid-19. He does not ex­pect pre­vi­ous lev­els of de­mand un­til 2023, pos­si­bly 2025.

Ge­o­graph­i­cally, 1,700 jobs will go in the UK, 5,000 in France, 5,100 in Ger­many, 900 in Spain, and a fur­ther 1,300 at other op­er­a­tions world­wide.

Sim­ple maths means that across the air­liner busi­ness, 17pc of jobs will be lost, mean­ing the cuts are not re­flec­tive of the scale of the down­turn.

The dis­con­nect is down to sev­eral fac­tors, not least em­ploy­ment sup­port and job re­ten­tion schemes pro­vided by gov­ern­ments. Cuts would have been “sig­nif­i­cantly worse” with­out th­ese, Faury said. “If you work out the ra­tio, it shows how ex­posed we were. Thanks to ef­forts of [gov­ern­ments] we have avoided a level of job cuts in di­rect pro­por­tion to the im­pact.”

Faury pre­vi­ously warned that Bri­tain’s job re­ten­tion scheme, which is due to be with­drawn in the au­tumn, could mean a “more per­ma­nent” hit to Air­bus’s em­ploy­ment lev­els in the UK.

This is be­cause sim­i­lar pro­grammes in France and Ger­many can po­ten­tially sup­port jobs for years, help­ing re­tain key skills for when de­mand re­turns.

An­nounce­ment of the re­dun­dan­cies had been ex­pected weeks ago, but was de­layed by Paris un­veil­ing €15bn (£13bn) of sup­port for its aero­space in­dus­try to safe­guard 100,000 jobs, as the coun­try’s unions piled on pres­sure.

Re­veal­ing the pack­age, fi­nance min­is­ter Bruno Le Maire said he was declar­ing a “state of emer­gency to save our aero­nau­tics in­dus­try”, which sup­ports about 300,000 jobs all told.

As well as di­rect sup­port for aero­space man­u­fac­tur­ers, the aid in­cluded €7bn of loans for air­lines. A con­di­tion of the money was they make their fleets more en­vi­ron­men­tally friendly by buy­ing new air­lin­ers, with an ex­pec­ta­tion that Air­bus would sup­ply them. Ger­many agreed a €9bn state bailout for Lufthansa a few weeks ear­lier, and in­cluded sim­i­lar ex­pec­ta­tions.

Aside from pro­tect­ing jobs, there was an­other el­e­ment of self-in­ter­est at play: France, Ger­many and Spain all have stakes in the com­pany, be­tween them hold­ing about a quar­ter of the busi­ness.

Bri­tain’s aero­space and air­line in­dus­tries have called for sim­i­lar state aid deals to those seen in Europe, but none has so far been forth­com­ing, though unions are call­ing for ac­tion.

Steve Turner, as­sis­tant gen­eral sec­re­tary of Unite, called the job cuts “in­dus­trial van­dal­ism”, ac­cus­ing the Gov­ern­ment of “watch­ing from the side­lines while a na­tional as­set is de­stroyed”.

How­ever, it would be wrong to say that Air­bus’s Bri­tish foot­print has been dis­pro­por­tion­ately hard hit by the lat­est job cuts. About 13,000 peo­ple work at Air­bus in the UK, three quar­ters of them in the com­mer­cial air­liner busi­ness. Most – about 6,000 – are at the Broughton plant in North

Wales, which makes wings for al­most ev­ery Air­bus air­liner. The sec­ond largest base is Fil­ton near Bris­tol, where sev­eral thou­sand en­gi­neers de­sign wings and land­ing gear.

Job losses in the UK as a pro­por­tion of to­tal com­mer­cial staff work out at roughly 17pc, slightly lower than in Ger­many, where the com­pany has 46,000 work­ers, 28,000 of them in­volved in build­ing air­lin­ers, equat­ing to about 18pc. In Spain, it is much higher, at more than 25pc.

The im­pact is less clear in France. Air­bus has 48,000 di­rect staff there, re­flect­ing the huge as­sem­bly lines and ad­min­is­tra­tive op­er­a­tions at its sprawl­ing Toulouse base, though not all of them work in the air­liner di­vi­sion.

Faury dis­missed spec­u­la­tion that Bri­tain had been sin­gled out, ei­ther be­cause of its fail­ure so far to stump up an in­dus­try res­cue pack­age or even be­cause of Brexit, against which Air­bus has cam­paigned vo­cally.

“We are look­ing at the work­load on our work­force. There is no Brexit or in­flu­ence of any other na­ture,” the Air­bus chief said as he an­nounced the losses. “We are adapt­ing to the num­ber of wings we need to put on our planes. It is a me­chan­i­cal trans­la­tion of the work­load.”

In­de­pen­dent aero­space an­a­lyst Howard Wheel­don backed Faury’s re­marks. “Air­bus has shown no favours to any one of the four part­ner na­tions,” he says. “It is to be com­mended for how it has ap­proached what is the worst sit­u­a­tion that the com­pany has ever faced in its 52-year ex­is­tence.”

In any case, Air­bus re­mains de­pen­dent on its UK op­er­a­tions: Broughton’s ex­per­tise could not be quickly repli­cated else­where. De­sign work could be re­lo­cated from Fil­ton more eas­ily, if en­gi­neers were up­rooted.

At the same time, Air­bus’s hard­line rhetoric on Brexit has soft­ened re­cently. Pre­vi­ous boss Tom En­ders railed against the “Brex­i­teers’ mad­ness” and warned the com­pany could quit the UK in the event of no deal. While Bri­tain leav­ing the EU could be an ad­min­is­tra­tive headache, Faury has adopted a more diplo­matic tone.

Speak­ing along­side An­drea Lead­som, busi­ness sec­re­tary at the time, in Jan­uary, he said Air­bus was “com­mit­ted to the UK and work­ing with the new gov­ern­ment to be a key part­ner to an am­bi­tious in­dus­trial strat­egy”.

He added that he saw “great po­ten­tial to im­prove and ex­pand” the com­pany’s UK op­er­a­tions. His words were seized upon by Lead­som, who called Air­bus “a na­tional trea­sure”. Lit­tle could Faury have known that a global pan­demic was about to pose a far greater ex­is­ten­tial chal­lenge than Brexit ever could.

Newspapers in English

Newspapers from UK

© PressReader. All rights reserved.