Speaking to German newspaper Die Welt, Airbus CEO Guillaume Faury confirmed plans for the world’s largest planemaker to reduce output by 40% over the next two years to counter the drop in demand for aircraft and delivery delay requests resulting from the effects on global travel by the COVID19 pandemic.
The company is now in talks with unions ahead of any formal announcement which is expected at the end of July. Airbus needs to find a balance between job losses and financial aid being offered by European governments. “It’s a brutal fact, but we must do it. It is about the necessary adjustment to the massive drop in production. It’s about securing our future,” Faury told Die Welt, without commenting on details of any cuts, and also stating that: “For the next two years – 2020/21 – we assume that production and deliveries will be 40% lower than originally planned.” He added that while output should be back to normal by 2025, depressed deliveries should have caught up by the end of 2021.
According to Reuters news agency, sources have predicted phased cuts of some 14,000 jobs based solely on the 40% output index, which takes account of labour needed for different models, or 15,000-20,000 on a broader view, which would equate to a cost of between €0.8 billion and €1.2 billion (US$9 billion and US$14.4 billion).
With principal plants located in Germany, France, the U.K. and Spain, respective employment laws will have to be taken into account as voluntary redundancy schemes will have to be exhausted before any forced redundancies can be made. Consequently, Airbus will rely partly on early retirements, with 37% of its 135,000-strong workforce due to retire within the next ten years.Email Post to a Friend