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Faury previously warned that Britain’s job retention scheme, which is due to be withdrawn in the autumn, could mean a “more permanent” hit to Airbus’s employment levels in the UK.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