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Pieter C.

Draconian measures at Airbus

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Airbus To Split 10,000 Job Cuts With Contractors


February 28, 2007

Airbus will announce on Wednesday plans to cut 10,000 jobs in four European countries, but will force contractors to share the pain of cuts which could provoke union unrest, industry sources said.


The plans, which had provoked a split between France and Germany over the distribution of job losses, are part of a restructuring deal discussed last Friday by German and French leaders, who agreed to share both job losses and new technology.


By making contractors share the pain of job cuts, the European planemaker could limit the impact on its own workforce to some 5,000 jobs or 9 percent of its 55,000 staff. The other half would fall outside Airbus, the sources said.


Most of the 10,000 jobs at stake are in France and Germany, the two nations where most Airbus production is based and whose representatives divide up power in parent company EADS.


Jobs in Britain and Spain are also under threat.


Airbus is also expected to heed calls from political figures including French Prime Minister Dominique de Villepin to avoid forced sackings with French elections looming in April and May.


"There will be 10,000 job cuts including half from Airbus and half from the outside contractors," an industry source said, asking not to be identified. Airbus declined comment.


Unions have threatened strikes over the cutbacks, which are also expected to involve the sale of up to a quarter of its 16 factories to Airbus suppliers and partnerships for some others.


"We totally oppose the closure of any site and we won't accept any firings," said European Metalworkers Federation head Peter Scherrer after a gathering of Airbus unions on Tuesday.


One factory at Meaulte, northern France, halted production 24 hours ahead of talks on Wednesday, unions said. It is one of 3 plants apparently slated for partnerships, including Filton in Britain and Nordenham in Germany, the sources said.


The restructuring follows a dramatic decline in Airbus's fortunes in the past year when rival Boeing restored its lead in global aircraft sales for the first time since 2000.


Observers predicted the planemaker, run by savvy former French railways boss Louis Gallois, would make a maximum effort to ease the headline impact of the cost cuts by balancing the effects between "core" Airbus jobs and outside contractors.


While Airbus has 55,000 people on its payroll its 16 European factories include thousands of other workers employed by outside companies but who work full-time on Airbus premises.


It was less easy to predict where the axe would fall between Airbus's factories despite an agreement between France and German leaders that the pain should be spread fairly.


Airbus is aiming to sell factories, rather than close them, in order to overhaul its production methods for future models and cut costs while continuing to meet its record order backlog.


Most reports insist two plants in France and two in Germany will be sold. But the fact that more of the Airbus factories are in Germany has put pressure on Berlin to accept a higher proportion of plant sales if the jobs are split roughly evenly.


Britain is expected to keep its overall 20 percent share of work including wings on the A350, despite recently severed share ties with BAE Systems. Analysts say supplier GKN is a likely suitor for a partnership with Airbus's 6,000-strong Filton site.


At the heart of a compromise floated during a rupture in negotiations last week is a Franco-German trade-off balancing new technology against hard cash from its top-selling plane.


France will assemble the A350 in Toulouse, reaping benefits from new materials, and the popular single-aisle A320 will be transferred from Toulouse to Hamburg, a union official said.


Germany had held out for some A350 assembly, but may have achieved the solution it wanted -- A320 jobs may be a safer bet if the larger A350, already trailing Boeing by 5 years, fails to catch up with the US jetmaker's hot-selling 787 Dreamliner.


French and German ministers put a positive spin on the restructuring plans on Tuesday, saying EADS shareholders had agreed on a balanced formula after weeks of damaging tensions.


But the cuts are seen as a blow for the French government, which reported a pause in recent unemployment declines in January, and for German efforts to preserve an upturn in growth.


The French government owns 15 percent of EADS and is part of a pact with French and German industrial shareholders. Although private, they are widely seen as national champions.




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Just heard the Breaking news from BBC at 10pm today.


3700 jobs in Germany

3200 jobs in France

1600 jobs in UK

400 in Spain

1100 in central functions...those based in Toulouse


Main reason of the huge losses are due to the weakening of the US Dollar, as aircrafts are sold in USD, so Airbus' profits would be severely affected.


On the delay of A380, the company will lose billions of dollars more over the next few years!


Sad news indeed.


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Main reason of the huge losses are due to the weakening of the US Dollar, as aircrafts are sold in USD


Same reason why Fokker went down the drain: the USD (i.s.o. HFL at the time) :angry:

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Very sad.....

Just a quest, doesn't the the per/plane price sell at above inflation rate to retain the value? If so, how they are losing money? I guess they don't <_>

Edited by Seth K

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Stunned Airbus Workers Walk Out Over Job Cuts


March 1, 2007

German Airbus workers expressed a mixture of disbelief and fear for the future on Wednesday, after the Franco-German planemaker said it would slash thousands of jobs at three German plants to cut costs.


Airbus said it would shut two plants in Germany and seek a partner for another. Workers at the affected plants retaliated by walking out in protest over job cuts they said will hit local communities hard.


"I couldn't believe the news. I just couldn't believe it," Joachim Gramberg said as he walked off his shift at the Varel Airbus plant -- one of three in Europe set to be closed down.


"We used to build 200 planes a year when we were doing great and now we are even making 438 a year and it's still the end."


Around 3,700 Airbus workers at plants in Germany stand to lose their jobs as part of the restructuring measures, with Varel and Laupheim, another factory in the southwest of the country, set to be shut.


A third plant, in St Nazaire, France, will also close while Airbus will seek partners for three more factories -- one in France, one in Britain and another in Nordenham, Germany, which is destined to remain an Airbus supplier.


"Before Friday, nothing is going to happen here," said Michael Eilers, head of the workers' council at Airbus in Nordenham, announcing a spontaneous walk-out at the factory. Workers also downed tools at Varel and Laupheim.


The impact of the job cuts -- fewer than the 10,000 some feared -- should be absorbed by an improving labor market in Germany, where unemployment fell to a five-year low this month.


But local regions already depressed by the economy's shift away heavy engineering and industry, could suffer.


"A lot of people have built homes here and are uncertain about what is going to happen next," Airbus worker Lothar Bredemaier said in Varel.


Monika Boettcher, the 53-year-old owner of a snack booth outside one of the factories, said those who had been drawn to work there years ago now faced a difficult future.


"Families are going to be made to suffer just because the individual doesn't count for anything any more," she said.




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3700 jobs in Germany

3200 jobs in France

1600 jobs in UK

400 in Spain

1100 in central functions...those based in Toulouse


That's a major drop of employees at Airbus :blink:

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News release from Airbus:


Power8 prepares way for "New Airbus"

28 February 2007


Following the unanimous approval by the EADS Board of Directors on Monday, Airbus today presented the details of its Power8 restructuring plan to the Airbus European Works Council and announced the creation of a new industrial and operating structure for the Company.


Power8 will enable Airbus to face the very substantial challenge of the US dollar weakness, increased competitive pressure, the financial burden related to the A380 delays as well as meet its other future investment needs. Power8 provides for strong cost-cutting measures, aims at transforming the Airbus business model and the development of a global network of partners. It will allow Airbus to devote its resources to core activities and eliminate inefficiencies within its current structure. The programme aims at the full industrial integration of Airbus by establishing a new industrial organization with transnational Centres of Excellence replacing the existing national structures. This transformation will happen progressively over several years and includes the further extension of Airbus' global footprint.


As part of Power8, the Airbus management will implement strong cost reduction and cash generating efforts leading to EBIT contributions of € 2.1 billion from 2010 onwards and additional € 5 billion of cumulative cash flow from 2007 to 2010. A large part of the cost savings will be achieved through reducing the total Airbus overhead workforce (including temporary and on-site supplier workforce) by 10,000. The envisaged measures to reduce overhead costs, and specifically headcount, require a provision of € 680 million to be taken in the first quarter of 2007. Airbus has put in place a robust tracking system with tangible matrix regarding cost and cash impact up to their materialization in the financial statements.


Airbus has the full support of all EADS core shareholders for Power8. The EADS and Airbus management has reviewed the programme thoroughly and is convinced that the envisaged measures will deliver on its economic promises. "The core objective of the programme 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", the CEOs of EADS Tom Enders and Louis Gallois said.


"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," Mr Gallois, who is also Airbus President and CEO, said. "We fully appreciate that this transformation must be undertaken jointly and in close consultation with our social partners". Airbus will report a negative EBIT in 2006 and, following the A380 delays, faces significant cash needs and deteriorating profits in the future, together with large investments needed for current and future programmes, in particular the A350 XWB. More fundamentally, the Dollar weakness alone has led to a 20 percent loss of competitiveness in only six years versus Airbus' competition. "We cannot continue to produce at our current Euro costs and sell at Boeing’s dollar prices," he said.


"Without establishing Power8 quickly, profitability will drift significantly short of industry standards and of reasonable expectations. This is an unsustainable and unacceptable situation. Power8 is designed to reduce that gap," said EADS and Airbus CFO Hans Peter Ring.


Power8 envisages the following measures:


Lighter and cost efficient management


The objective of a lighter and cost efficient management will be addressed by several Power8 programme modules and in particular by the Reduction of Airbus Overhead costs module.


Reduction of Airbus Overhead Costs: The Airbus management proposes a progressive headcount reduction of 10,000 overhead positions over four years - thereof in Airbus Deutschland around 3,700 in Airbus France around 3,200, in Airbus UK around 1,600, in Airbus CE around 1,100 and in Airbus España around 400.


5,000 of these positions are temporary or on-site subcontractors, where reductions will begin immediately. The other 5,000 overhead positions affected will be direct Airbus employees. Priority is given to achieve reductions through negotiated voluntary severance processes and schemes in each country concerned. The respective national processes, including negotiations in each country of voluntary severance schemes, will be launched immediately. Airbus' total workforce consists of 57,000 direct employees plus 30,000 subcontractors.


At this stage, the Airbus management proposes no forced redundancies. Should these schemes not generate the expected level of reductions within the next 12 to 18 months, other measures will have to be considered to fully achieve the cost saving targets.


"We will manage the social impact of these measures properly and in close dialogue with our employee representatives," Mr. Gallois stressed. "The burden will be spread in a fair and equitable manner across Airbus. The balance of the Airbus founding nations will be preserved."


Airbus will launch a strong training initiative, to identify the skills required by the "New Airbus" and to deliver the relevant training programmes.


Other substantial cost cutting and strict budget control measures are already underway. They include a temporary hiring freeze, an executive salary freeze for 2007, as well as significant cuts in general expenses. As part of the overall cost cutting, Airbus and EADS will work together to implement the strategy of shared services and sourcing.


Further Power8 modules aimed at streamlining Airbus' processes and supporting the transition to the "New Airbus" are:


Develop Faster: This module aims at the reduction of cycle time of new aircraft development from 7.5 to 6 years, while establishing robust development processes with risk-sharing partners to secure these cycle time reductions, as well as the required aircraft maturity at entry into service. It also aims at improving the productivity of the company's engineering activities by 15 per cent.


Lean Manufacturing: It is meant to further integrate manufacturing and associated engineering, and ensure the deployment of consistent lean production principles across all plants. A productivity increase by 16 per cent is targeted by 2010.


Smart Buying: This module aims at the reduction of the Airbus supply cost base. It will also contribute to the reshaping and consolidation of our supply base, and the building of a network of strong Risk Sharing Partners to Tier 1 suppliers, while streamlining the logistics organization (from 80 to 8 logistic centres).


Maximise Cash: This module targets the reduction of financial working capital and the tight control of cash in all operations.


The Customer First Module will ensure the interests of customers to always come first. "Delivering and even improving on our commitments, serving our customers even better, with even higher levels of services, more reliability and reactivity, and further improved quality is our prime objective in all this", explains Mr Gallois.


Focus on core business


In the future, Airbus will focus on "core business" activities that are critical for the integrity and safety of the aircraft, or vital for technological and commercial differentiation, for the operability and reliability of the aircraft and its maturity at entry into service. These activities include overall aircraft and cabin architecture, systems integration, as well as the design, assembly, installation, equipping, customization and testing of major and complex components or manufacturing of new technology parts.


"This shift is essential for Airbus' future. Many industries face similar challenges, but we have to establish our own way with specific solutions. We must retain the competencies that are essential to design, develop, produce, deliver and support the best and most efficient products for our customers," Mr. Gallois said. "If we move carefully, pragmatically and quickly, we will leverage our position as a leading global player in the civil airliner market."


This "core" activity focus will be implemented in the "make or buy" strategy adopted for the A350 XWB. About 50 per cent of aerostructure work will be outsourced to risk-sharing partners (€ 1.8 billion non recurring costs and € 600 million associated CAPEX). This is proportionally about twice as much as in earlier programmes.


The workshare responsibility for the development of the A350 XWB will be split equitably among the founding nations with about 35 percent for Germany and France, 20 per cent for the UK and 10 per cent for Spain.


Long-term global partnership network


Airbus will restructure its industrial set up and establish in the coming years a long-term oriented network with strong partners. This will allow Airbus to share development costs as well as engineering resources.


"We will turn Airbus into an extended enterprise. The A350 XWB will draw on this new business model, as we assign large work packages to Tier 1 suppliers in return for a better distribution of future investment, risks and opportunities, with a consolidated supply base," Mr. Gallois said.


Airbus is considering industrial partnerships at its plants in Filton, Meaulte and Nordenham, in order to facilitate their development from metallic to composite design and manufacturing technology. The company has already received unsolicited proposals by potential industrial partners ready to invest in these sites and to possibly take partially or fully the control of them in the framework of the extended enterprise concept.


Airbus is determined to pragmatically attain the optimum scope of industrial activities and to optimize resource allocation and enhance capital efficiency. "This is the right time to consider such a partnership approach," Mr. Gallois said. "Our order book translates into more than five years of production, and customer demand continues to be very high for our aircraft. We are ramping up our production everywhere and have just launched the A350 XWB. We are ready to share attractive business opportunities with strong partners."


The sites in Laupheim, St. Nazaire-Ville and Varel will continue to perform long-term substantial workloads on the current Airbus aircraft programmes, such as the A380, the A320, the A330/A340 families, and the A400M. Airbus is committed to seeking viable future opportunities for these sites, this includes options to sell sites to key suppliers, management buy out or combination with nearby sites. This will of course be done in close consultation with the social partners.


"We will prepare the future of each and every one of our sites in the overall interest of Airbus, to strengthen industrial partners and suppliers, and to ensure long-term local business and employment continuity," said Mr. Gallois.


Streamline the final assembly lines


A number of measures are also being implemented to further increase the efficiency of the final assembly lines (FALs).


The A350 XWB will be assembled and receive its interior furnishing in Toulouse, in the same facilities as the current A330/A340, enabling a capacity enhancement of this FAL.


A third A320 Family FAL will be set up in Hamburg immediately to cope with the steep production ramp-up currently under way. This FAL will be established in already existing facilities and will have full type flexibility when demand for A320s exceeds rate 14 per month. The A320 will continue to be assembled in Toulouse up to rate 14. Hamburg will also perform final assembly of the future New Single Aisle family.


Furthermore, in order to allow parts to be fitted in the most logical place to optimize the overall cycle time, some upstream preparatory A320 and A380 cabin installation work will be transferred from Hamburg to Toulouse. Cabin installation will remain in Hamburg. A380 deliveries will still be made from both Hamburg and Toulouse.


Fully integrated and transnational organisation


Airbus will introduce a fully integrated and transnational organisation to support the implementation of Power8 and the establishment of the new business model.


This new organisation will enable cost savings and strengthen leadership through clearer accountability, faster decision-making and simpler interfaces.


"Integration means strengthening the accountability of those responsible. It is not an invitation for centralisation or doing everything in-house. On the contrary, we demand an empowerment of those in charge," Mr. Gallois explained.


The new industrial organisation will force process streamlining through the establishment of four truly transnational "centres of excellence" led by the Head of Operations: Fuselage & Cabin, Wing & Pylon, Rear, and Aerostructure, the latter being in charge of fuselage subassembly and interior furnishing activities. This will replace the current organization of eight nationally structured centres of excellence.


Further organisational changes include completing the integration of support functions such as Finance and HR as well as reinforcing the authority of core functions such as Engineering, Procurement and Programmes.


The national entity leaders will assume a strong representative role, acting as Airbus ambassadors. They will be accountable for all aspects connected to national regulations (legal, social etc.) but will not have any operational responsibility. They will report to the Airbus CEO office and act on its behalf.


Sharing services with EADS corporate functions where clear benefits arise, will be another lever to improve the efficiency of the support processes, optimize resources and reduce overhead costs.


Concluding his comments, Louis Gallois said: "None of these changes will be easy, but they are essential to securing the future of Airbus as a world-leading aircraft manufacturer for the long-term, and a business of which all its stakeholders can be rightly proud."


Airbus operates in a growth market of 22,000 new aircraft in the next 20 years. The order backlog represents about five years of future production, and the company continues to deliver record levels of aircraft.



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News release from CNN:


Airbus job cuts spark stoppages


PARIS, France (Reuters) -- France's prime minister defended thousands of job cuts at European planemaker Airbus on Thursday, but unions threatened to vent their anger during upcoming French elections while factory stoppages spread in Germany.


Wednesday's announcement of 10,000 job losses including 4,300 in France put one of the key issues worrying the French -- chronic unemployment -- center-stage in France's presidential election race and dominated a monthly government briefing.


"This plan is necessary to definitively end the situation of uncertainty and prepare for the future," Prime Minister Dominique de Villepin said.


France-based Airbus plans to sell all or part of six European plants to save costs after sacrificing 5 billion euros in future profits due to delays to its A380 superjumbo.


Airbus plans no forced redundancies but has warned these could come if the company's fortunes worsen in 12-18 months.


It says its survival is at stake as Boeing surges ahead.


Socialist candidate Segolene Royal is promising a moratorium on the job cuts if elected French president on May 6.


Conservative front-runner Nicolas Sarkozy said the state should not interfere in Airbus, but said later he would meet unions who are lobbying each candidate in the April/May poll.


Anger swept through Airbus plants in Germany on Thursday and three French unions called a strike for March 6. Three German plants slated for full or partial sale stopped work.


They included the small southern German town of Laupheim, whose economy stands to be hit hard by the unexpected sale of a 1,200-strong plant that equips VIP cabins for the super-rich.


"We are standing on a precipice," said Airbus worker Harald Wiedemann. "Nobody knows what is going to happen."


'Economic patriotism'


Villepin, whose premiership began in 2005 with a fanfare over "economic patriotism" to defend French interests and jobs, was forced to weave between interventionism and a more hands-off approach from Sarkozy, his arch-rival in the ruling UMP party.


He said the state's job was to support rather than to replace firms. "That is the notion that I have of an ambitious industrial policy. That is the notion of economic patriotism."


Some French newspapers accused the government of bowing to Germany in negotiations over the distribution of job cuts, which were discussed between French and German leaders last week.


Britain and Spain will also lose jobs.


France owns 15 percent of Airbus parent EADS. Its power to intervene is curtailed by a shareholder pact, but Airbus's political masters often apply pressure informally.


"They can make things difficult," an Airbus official said.


European Transport Commissioner Jacques Barrot said governments had peered over Airbus's shoulder for too long.


Villepin said the French government would provide 100 million euros ($132.2 million) in aid to the carbon fibre sector, an area vital to its next plane project, the A350.


Airbus's woes also include a weak dollar and years of nationalist infighting that led to duplication of jobs.


Investors signaled fears about whether EADS would stand firm on cuts by driving down its shares 5 percent to 24.7 euros.


2007 is turning out to be a bad year for Airbus so far.... :o

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I heard airbus is going to suspend A380 cargo plane production


I hope that doesn't happen.... :( :blink:


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I heard airbus is going to suspend A380 cargo plane production. Any confirmation ?

Must say it would not surprise me totally if it turns out that way. I do not recall any civil project having a cargo version included from the beginning. So far, cargo birds have evolved more as an after thought !


Having said that, the 747 project did start life as a cargo design (albeit, a design that lost the USAF competition)


So, :pardon:

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I heard airbus is going to suspend A380 cargo plane production. Any confirmation ?



Must say it would not surprise me totally if it turns out that way. I do not recall any civil project having a cargo version included from the beginning. So far, cargo birds have evolved more as an after thought !


It is true, see this:


UPS Cancels A380 Order In New Airbus Blow

March 2, 2007

Troubled Airbus suffered its second blow in a week on Friday when the last cargo customer abandoned the freight version of its delayed A380 superjumbo, days after the planemaker announced 10,000 job cuts.


United Parcel Service said it planned to cancel an order for 10 Airbus A380 freighters, worth approximately USD$3 billion at list prices, joining its rival FedEx which cancelled an identical order last year.


The US express firms were among buyers angered by delays of up to two years in A380 deliveries, and had been the sole takers of a superfreighter version on which Airbus had pinned hopes of challenging the Boeing 747 in global airborne trade.


UPS said it was concerned that Airbus, a unit of EADS, could not fill its orders in a timely manner.


UPS had already said it was delaying taking deliveries of its 10 aircraft beyond 2010 and reached agreement with Airbus last week to wait for the results of a review.


All that changed when EADS and Airbus said on Thursday the planemaker would temporarily stop working on the cargo version of the world's largest airliner.


"UPS had intended to complete an internal study of whether it could wait until 2012 for the aircraft, but now understands Airbus is diverting employees from the A380 freighter program to work on the passenger version of the plane," it said.


"Based on our previous discussions, we had felt that 2012 was a reasonable estimate of when Airbus could supply this plane," UPS president David Abney said in a statement. "We no longer are confident that Airbus can adhere to that schedule."


Airbus said it respected the decision and remained confident of delivering the first passenger plane in October.


The highly unusual public spat ended a dire week for Airbus, which warned on Wednesday its survival was at stake as it cut jobs and put plants up for sale, triggering union walkouts.


The leader of one of France's biggest unions said he feared there would be forced lay-offs in the Airbus restructuring plan, despite assurances from the company and the French government.


"I hear the (French) prime minister say that we have assurances there will be no forced lay-offs," CGT secretary-general Bernard Thibault told France 2 television. "What is certain... is that at the contracting firms the consequence will be forced lay-offs," he said.


"We know what the next stage is -- outsourcing, contracting and then moving work to low-cost countries," Thibault said.


Unions have pledged to make the job cuts, and 1,500 lay-offs at technology form Alcatel Lucent,, an issue in French presidential elections in April and May.


Airbus says it could reconsider whether to impose forced redundancies if its fortunes have not improved in 12-18 months.


It will sell parts or all of six of its 16 sites in France, Germany, Britain and Spain after sacrificing EUR5 billion euros (USD$6.6 billion) in future profits due to delays to the A380 superjumbo.


It has also been hit by a weak dollar and the erratic development of its next model, the mid-sized A350 which it needs to compete with Boeing's fast-selling 787.


In Germany, workers in three plants being sold in full or in part refused to work for a third day, but said they would resume from late Sunday. French unions called a strike for Tuesday.


The head of Airbus in Germany, Gerhard Puttfarcken, told ZDF television that the firm was open to dialogue.


"We are at the start of the process, and it has been designed in a way to leave room for dialogue," he said.


Industry sources said on Friday that there were expressions of interest for the three German sites Varel, Laupheim and Nordenham from companies and financial firms.


On a more positive note, Germany said it did not expect delays to deliveries of the future A400M military airlifter despite the industrial crisis at Airbus.


The first 60 A400M aircraft ordered by the German army are due to be delivered and ready for use in 2010. The aircraft is seen as an integral part of European Union ambitions to develop the bloc's capacity as a global military player.




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"We know what the next stage is -- outsourcing, contracting and then moving work to low-cost countries," Thibault said.




Come, come to Malaysia :clapping:

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UPS to cancel A380F order, cites lack of 'confidence' in Airbus schedule


Monday March 5, 2007

UPS said Friday it will cancel its order for 10 A380Fs, expressing doubt that Airbus can maintain the delayed delivery schedule agreed to last month and leaving the manufacturer with no orders for the freighter version.


UPS and Airbus reached an agreement in February that pushed delivery of the first aircraft from 2010 to 2012 and specified that either company could terminate the order later this year. The parcel delivery giant said it would take time to evaluate the order, but it reversed course last week and announced it will cancel the deal as soon as the agreement with Airbus permits.


UPS ordered the aircraft in January 2005 and at the same time cancelled commitments for 37 A300-600Fs. It originally had been scheduled to receive its first A380F in 2009.


The company "had intended to complete an internal study of whether it could wait until 2012 for the aircraft but now understands Airbus is diverting employees from the A380 freighter program to work on the passenger version of the plane," it said. Added COO and UPS Airline President David Abney: "We had felt that 2012 was a reasonable estimate of when Airbus could supply this plane. We no longer are confident that Airbus can adhere to that schedule."


The cancellation casts doubt on the future of the A380F, on which work reportedly has been suspended. Airbus originally touted the freighter version as a key driver behind development of the large aircraft, pushing its potential to transport high volumes of cargo between major international trading centers. "Freight operations will be on a different scale, with new levels of range and efficiency, when the A380 freighter enters service," it said.


FedEx, Emirates and ILFC all previously ordered the A380F but subsequently cancelled or switched freighter orders to passenger versions.



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France Ready To Back Cash For Airbus


March 5, 2007

The French government, goaded by presidential candidates into responding to massive job cuts at Airbus, said on Monday it was ready to pump cash into the ailing planemaker and shake up a Franco-German power-sharing pact.


Prime Minister Dominique de Villepin also called on Airbus parent EADS to abandon paying a dividend this year to its shareholders, which include the French government, after announcing plans to cut 10,000 jobs including 4,300 in France.


Villepin said the government stood ready to participate if the Franco-German-Spanish company EADS decided to tap its shareholders for more cash through a capital increase to shore up a company hit by delays to the new Airbus A380 superjumbo airliner.


"The state will play its role," he said, evoking a scenario which could please French voters. However, EADS' biggest private shareholder, German car firm DaimlerChrysler, has battled for years to prevent what it regards as state meddling.


EADS has said it may need to make a cash call after losing EUR5 billion euros (USD$6.54 billion) in future profits on the A380 production problems, but that it does not plan to launch one soon.


Villepin was speaking after calling in ministers for crisis talks on the Airbus job cuts, which has shot to the top of the France's political agenda ahead of its April and May presidential elections.


Presidential front-runners have been jostling to appear most engaged in defending Airbus jobs but presenting different visions for the future of the European aerospace industry champion.


Socialist Segolene Royal, true to her campaign pledge to decentralize power from Paris, wants a group of French regions to buy shares in EADS, mirroring the involvement of German federal states which have bought symbolic stakes.


Centrist rival Francois Bayrou said regions should steer clear of the Airbus crisis, which conservative front-runner Nicolas Sarkozy likened to Alstom -- the builder of France's high-speed trains, which was rescued in a 2004 bailout.


"We shouldn't be fatalistic. We saved Alstom and I have not decided to let Airbus fail. We recapitalised Alstom. If we need to boost the state's stake in Airbus, why not?" said Sarkozy, who was finance minister at the time of the Alstom rescue.


Sarkozy promised to renegotiate the special shareholding pact which limits state involvement in EADS just a week after urging politicians to steer clear of the problem and also said Franco-German management parity in EADS would have had to go.


"There needs to be a real shareholder, who would be the industrial boss of the company, who decides on management and we should stop this Franco-German parity and just take the best people to take the best decisions," Sarkozy told France 3 television.


The first round of the presidential election is due on April 22 and currently Royal is trailing Sarkozy in the polls.


Three French unions have called an EADS-wide strike for Tuesday, and expect up to 10,000 protesters in Toulouse.


In Germany Airbus factories returned to normal after a four day stoppage in some plants, a spokesman said.


The French government has expressed irritation that its hands are effectively tied by the shareholder pact designed by its Socialist predecessors when EADS was founded in 2000, but it risks opening EADS up to foreign predators if it weakens the takeover defences enshrined in the same pact.


The pact was drawn up by a previous French Socialist government -- a fact that has limited Royal's room to criticize the incumbent conservative administration.




Airbus Restructuring Plan Vital - French FinMin


March 5, 2007

French Finance Minister Thierry Breton said on Sunday a restructuring plan unveiled by Airbus was vital to its future success.


Airbus on Wednesday said it would cut 10,000 jobs over the next four years, including 4,300 jobs in France, sparking trade union protests and a political storm in France where a two-round presidential election will be held in April and May. Speaking before Prime Minister Dominique de Villepin meets on Monday with key cabinet ministers and parliamentarians to discuss Airbus, Breton sought to calm the political waters.


"The plan is indispensable," he said in a joint interview with LCI television, Le Figaro newspaper and RTL radio.


Breton criticized Socialist presidential candidate Segolene Royal for presenting Airbus's restructuring plan as one that would lead to immediate job cuts and he stressed there would be no forced layoffs.


He also branded Royal "irresponsible" for suggesting Airbus was in crisis, saying this risked sending the wrong message to clients and the firms' workers.


Asked if French regions should be able to take a stake in Airbus parent EADS, like German regions, Breton said: "Airbus does not need liquidity, Airbus today needs a plan to adapt, and visibility on a four-year horizon."


German regions are among investors who have taken a slice of EADS although voting rights for the German core shareholding of 22.5 percent remain entirely with automaker DaimlerChrysler.


However, Breton added: "There will come a time, when this plan has been implemented, more precisely when the A350, the new plane... on which Airbus is working will start to be designed, at that moment, we can turn to shareholders again."


Breton said a shareholder pact that curtails the state's power to intervene with Airbus, which was agreed under a previous Socialist government, had drawbacks, but also the merit of preventing takeovers.


"This pact, which does not give enough power to the state... has a merit. This merit is that, today, thanks to this pact, no one can carry out a takeover of Airbus," he said.


"Maybe it needs to evolve, but we certainly have to have a pact. For an aeronautical company, like EADS and Airbus, for Europe, it is absolutely strategic and this pact is also defensive," Breton said. "Today one can become a shareholder. There are notably Russian investors who are becoming shareholders in EADS, but this pact does not give any power to enter in the governance and I think that is good."


France and Germany have been concerned in the past by a Russian decision to take a 5 percent stake in EADS through state bank VTB.




French Airbus Workers Strike Over Job Cut Plans


March 6, 2007

Thousands of Airbus workers went on strike at French factories of the European planemaker on Tuesday, protesting against a restructuring plan that has dominated France's presidential election campaign.


More than a hundred buses brought staff from factories in southern Toulouse to a rally in the city to denounce plans by Airbus to cut 10,000 jobs across Europe, including 4,300 in France.


In the northern town of Meaulte, some 1,500 workers marched through the rain to protest against the restructuring aimed at cutting costs after delays to its A380 superjumbo project.


"It's not right that one of the jewels of European technology is cutting 10,000 jobs over four years, while its order book is full for several years," Bernard Thibault, the head of the CGT union, told Les Echos daily.


Tuesday's strike was due to last a day but unions threaten wider action if Airbus carries out forced redundancies, something it has promised not to do unless things get worse in 12-18 months.


In Germany, workers who staged walkouts last week resumed normal operations on Monday. They have agreed not to strike under a long-standing pay deal with Airbus management.


With an Airbus plane rolling off assembly lines on average every 9 working hours, production would be badly hit in both countries if French workers held a prolonged strike, since French factories produce many parts needed for the whole group.


Airbus has shot to the top of the political agenda in France, with Socialist presidential candidate Segolene Royal and her center-right rival Nicolas Sarkozy both demanding action to help Airbus parent EADS, although by different means.


Finance Minister Thierry Breton said on Tuesday the French state was ready to raise its stake in EADS if needed and reaffirmed it would follow any capital increase at the company badly hit by delays to the new Airbus A380 superjumbo airliner.


"The state will follow the capital increases if these are proposed," Breton said in an interview with France Inter radio.


Sarkozy has also proposed pumping state money into Airbus to fund future development while Royal wants a group of French regions to buy shares in EADS, mirroring the involvement of German federal states which have bought symbolic stakes.


She has also said she would try to freeze the restructuring program if she won power in the April and May election.


Royal was due to meet German Chancellor Angela Markel in Berlin on Tuesday to talk about the troubled firm, but Breton denounced her ideas as unworkable.


"Her proposal... is populist and useless," he said in an interview with Metro newspaper, saying French regions did not have the financial clout of their German counterparts.


Breton said when EADS private shareholders Lagardere and DaimlerChrysler began discussions on reducing their holdings in 2005, he had told them "in the name of the government that not only would it not sell its shares but that it was ready to raise its stake and follow any capital increase if that were necessary".


His remarks on a capital increase mirrored comments by Prime Minister Dominique de Villepin who has said "the state will play its role," evoking the same forceful stance on industry which gave birth to his earlier policy of "economic patriotism".


Germany, in particular DaimlerChrysler, is suspicious of French state interference and insisted on reducing public influence in the company's founding shareholder pact in 2000.


The French decry political maneuverings in Germany too and resent Berlin's decision to bring in a state bank and regions to bolster its presence while dismissing French interventionism.


The political fighting over how to help Airbus workers dominated French newspaper headlines on Tuesday.


"(Centrist Francois) Bayrou and Sarkozy have had to change position and ended up praising public authorities, following the example of the Socialists," left-leaning Liberation daily said.


"Today, they are also pleading for the state to bring in capital again, to redefine the shareholder pact and the governance of the company," it said in an editorial.


The French government has expressed irritation that its hands are effectively tied by the shareholder pact designed by its Socialist predecessors when EADS was founded in 2000. But it risks opening EADS up to foreign predators if it weakens the takeover defences enshrined in the same pact.




It looks like dedicated Airbus workers fall victim to a political game between France and Germany :angry:


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Another 'low' for Airbus:


Airbus Orders At 5 Month Low In February


March 6, 2007

New plane orders for European jetmaker Airbus fell to a five month low of seven aircraft in February, monthly figures showed on Tuesday.


The month's orders did not include any wide-bodied aircraft, also for the first time since September last year.


Airbus confirmed it had sold four narrow-body planes to British Airways, though the airline also ordered more expensive long-range jets from Boeing.


The Oman air force was among the other buyers of short- to medium-range A320-family jets in February.


Airbus plane orders have been increasingly dominated by lower-margin single-aisle jets as it wrestles with development problems in its 200-350 seaters and its delayed superjumbo.


The figures released by Airbus bring to 97 the cumulative total of 2007 plane orders received to end-February.


Over the same period, Airbus delivered 76 aircraft.


The company is currently in the middle of a political storm in France and Germany after announcing 10,000 job cuts as it battles to compete with Boeing.




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France Puts Heavyweight On EADS Board


March 7, 2007

France nominated the country's top banker to the board of Airbus parent EADS with orders to help simplify its governance, signaling growing impatience with a structure blamed for in-fighting at the company.


Michel Pebereau, chairman of France's biggest bank by market value, BNP Paribas, will represent the French state in a significant boost for a role previously held by aerospace executive Louis Gallois, who is now co-chief executive of EADS.


Power at Europe's largest aerospace group is shared between France and Germany, the dual pillars of European integration efforts, with the chairman and chief executive roles split into two and occupied by one person from each country.


But that carve-up has been blamed for internal battles since EADS was created in 2000 and may have worsened an industrial crisis over delays in producing its new superjumbo which forced Airbus to announce 10,000 job cuts and begin plant sales last week.


French Finance Minister Thierry Breton said media group Lagardere, which owns 7.5 percent of EADS and officially represents the combined French interests in the company, would convey the nomination of Pebereau to the company's board.


Pebereau will "contribute towards clarifying and simplifying the company's corporate governance," Breton told Europe 1 radio.


The remarks take aim at corporate rules originally designed to ease German fears of meddling by the French government, which owns 15 percent, but which have sparked widespread unease in France as the jobs cuts are announced at the height of French elections.


Fury over the cuts, which include 4,300 jobs in France, has led to calls by some presidential candidates including rightist frontrunner Nicolas Sarkozy for shareholder rules to be changed.


Political sources say French leaders are concerned that Lagardere's drive to focus on its media activities has created a vacuum on the French side, resulting in a shift of power towards Germany.


Both Lagardere and the German core industrial shareholder, car firm DaimlerChrysler, have recently parked or sold shares in EADS order to raise cash for core businesses.


Part of the Daimler stake was picked up by German public and regional institutions, prompting a drive by French Socialist Presidential candidate Segolene Royal to get France's regions a slice of the same pie to help defend jobs.


Pebereau's presence on the board provides a clear signal to co-chairman Arnaud Lagardere that the government is unwilling to play a passenger role, despite restrictions on its influence.


A veteran of corporate battles including BNP's takeover of Paribas and a bid attempt on rival Societe Generale, Pebereau represents a powerful clan in the French financial establishment and wrote Breton a report on the national debt.


The executive heads of EADS, France's Louis Gallois and German co-CEO Tom Enders, have also called for a change in the dual corporate structure to make the group easier to manage.


Any changes would have to overcome political or shareholder resistance in Germany, where Chancellor Angela Merkel opposes a shake-up and Daimler is reported to be just as doubtful.


In Berlin, France's Royal said after talks with Merkel that the German chancellor shared her concerns that job cuts at Airbus might hurt its ability to meet orders.


Merkel has blamed the plane maker's woes on errors by previous company managers and has said repeatedly that executives at Airbus parent EADS need to take restructuring decisions without interference.


Gallois meanwhile told French newspapers he understood the fears of staff but could not change his restructuring plans.


He also dampened talk of an immediate capital increase for EADS, despite support for the idea from the French government as it seeks a decisive response to protests over the Airbus cuts.


"There is no urgency for a capital increase. It's perfectly clear. EADS is cash positive at the moment", he told RTL radio.




This dual 'struggle' reminds me of the former Belgian airline SABENA, where also 2 'chiefs' had to run the airline: a Flemish (Dutch speaker)one and a Wallon (French speaker) one at the top as well as at the departmental level :o

Well, you know what happened to that airline, right ??? :huh:


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Found this really interesting article about Airbus and would like to share:


Like characters in an ancient Greek tragedy, players in the Airbus drama are betraying their fatal flaws, and moving, almost inevitably, toward a dénouement that will bring serious misfortune to all. Despite failure upon failure, no one is willing to suggest openly killing the troubled A 380 program, which seems destined to drag down not just the still viable parts of the company, but also the workers, localities hosting factories, and even the governments of France and Germany.


Airbus wanly puts an official happy face on the setbacks of the past week, and is squandering its credibility - an essential quality for an airliner manufacturer -- at an alarming rate.


The sole remaining customer for the freighter version of its A 380 super jumbo canceled late last week, yet the company insists that the freighter program will live on, because someday, some freighter version somehow may be ordered. Boeing, meanwhile, has booked more than 50 orders for its only slightly smaller 747-8F freighter, and promises 24 percent lower fuel burn per ton, 20 percent lower trip costs and 23 percent lower ton-mile costs than the A380F. It is hard to see how any new customers would be attracted to the Airbus cargo craft.


UPS, the last customer for the A 380F, makes no secret of its unhappiness with the way Airbus treated it:

"UPS had intended to complete an internal study of whether it could wait until 2012 for the aircraft, but now understands Airbus is diverting employees from the A380 freighter program to work on the passenger version of the plane," it said.


But Airbus pretends that the separation was amicable:

"UPS is and remains a valuable and strong customer and business partner for Airbus."


The Power8 restructuring plan, over which previous CEO Christian Streiff was fired, was delayed in February when French and German board members clashed over whose jobs were to be lost, and was finally released amidst bitter criticism. Yet Airbus trumpeted the plan with a press release hailing unanimity and the advent of a "new Airbus."


Airbus has the full support of all EADS [parent company of Airbus- ed.] core shareholders for Power8. The EADS and Airbus management has reviewed the programme thoroughly and is convinced that the envisaged measures will deliver on its economic promises. "The core objective of the programme 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", the CEOs of EADS Tom Enders and Louis Gallois said.

The financial markets don't believe the company's optimistic gloss:


Shares in EADS have slumped by about 11.5 percent since the plan was announced on Wednesday because of scepticism that the restructuring can be applied in the face of a highly unionised workforce and political pressures.

Airbus unions are having nothing of it, either. Tuesday, 15,000 French workers went on strike and marched through Toulouse, waving banners, blowing whistles, and setting off firecrackers, joined by thousands more in other Airbus French manufacturing locations.


The German workers are not happy either. Here a rough translation of a workers' screed:


Unlimited strike in all Airbus plants. European-wide! Now! The Power-8 Program must be cancelled completely! Permanent and agency workers, workers with limited-term contracts of employment, workers of suppliers: we are one single workforce! Whoever attacks one of us, attacks all of us. The struggle must be waged rigorously, actively and with democratic consultation and decision making.

While some elements of the Power8 program make sense, such as the use of more outsourcing, other elements do not fit together as a coherent whole. The company plans to downsize its workforce and increase the rate of production of existing airplanes as a way of generating more cash, which it desperately needs. Moving assembly of the A 380 and A 320 airplanes from plant to plant, as the company intends, inevitably will require worker retraining, so a production speed-up will have to wait for the remaining workers to acquire new skills or apply old skills in new settings.


Perhaps worst of all, domestic French and intra-EU politics are becoming more, not less involved in company decision-making, aggravating the tragic flaw that has gotten the company into its existing mess. Instead of operating more like a rational private business, as the company must, state intervention looms even larger.


Both candidates in the coming election for the French presidency have pledged to inject state funds into Airbus. Nicolas Sarkozy ominously raised the specter of Airbus failing:


"I have not decided to let Airbus fail. We recapitalised Alstom. If we need to boost the state's stake in Airbus, why not?"

Why not? For one thing, injecting French state funds into Airbus would ignite a trade war with the United States. For another, further subsidies would encourage Airbus to pursue uneconomic policies. New capital would also require changing the basic agreement under which Airbus was set up, requiring German approval for any changes in capitalization, and balance between French and German shares in the company. Arab investors, Russia, and maybe even the Chinese (the latter two parties obviously interested in acquiring technology and markets for their own industries and workers) are possible sources of additional outside capital, but there would be strings and problems attached to any of these alternatives.


Sarkozy's presidential opponent, Socialist Segolene Royal, not only pledged public monies to Airbus, she also promised to suspend Power8 if elected, and for good measure repudiated market forces, saying


"The state must emerge from its lethargy and inertia and stop thinking that the market can solve everything," Royal said.

At the conclusion of a meeting between Royal and German Chancellor Angela Merkel yesterday, the usual diplomatic phrases about European unity could not paper over the rising tensions between France and Germany.


German officials have said a capital increase for Airbus is not currently on the agenda, and it is primarily up to company management to resolve the crisis.


Royal conceded that "the state is much less directly involved in Germany than in France, so the questions are a little different.


"Asked whether Merkel agreed more public money should be put into Airbus, Royal replied: "She believes that if public intervention is necessary, this public intervention concerns research."


"She didn't rule anything out, but she made no commitment on a recapitalization by the state," Royal said.

All this talk of recapitalization, state aid and the failure of Airbus is an admission that the company is no longer self-sufficient as a commercial enterprise. No satisfactory alternative exists to extricate from the corner into which Airbus has painted itself.


It was a huge mistake to pursue the glory of the world's biggest airliner. A future president of France may be able to fly to a summit meeting with the president of the United States and sneer, "Mine's bigger," but it will be an empty boast, even if both presidents aren't females, as they might well be by the time the A 380 flies in normal service.


As orders for the A 380 have languished, Boeing's mid-size new technology 787 is enjoying such unprecedented success that the company says it is seriously considering ramping up production from 7 to 10 airplanes per month, a commitment that would require huge investments from both Boeing and its suppliers, and confidence that demand will remain robust for many years.


If Boeing's promises for the 747-8 and 787 planes come true, it is hard to imagine many new orders for the A 380, yet that airplane continues to suck up cash, labor, and especially engineering talent that are needed to develop new medium and small models. The most successful current Airbus model, the narrow-body A 320 has fallen behind its rival Boeing model in terms of new refinements. Even worse, the planned rival for the Boeing 787 will not be on the market until 2014 at the earliest, with further delays not an impossibility.


Given the fatal flaw of state backers, its own two-headed management structure with French and German executives sharing power and often pulling in different directions, and the anger of its unions over the consequences of mismanagement, the prospect is for matters to get even worse.


Once a symbol of European unity and promise, Airbus has become a contentious issue dividing Germany and France. Like the Ancient Mariner's albatross, this bird brings no good.


Have not highlighted anything as don't want to influence anyone, but,


Please, share what's your opinion about all this :pardon:

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Airbus employees are going on srike!!!!! :blink: :


Airbus protests due across Europe


A fresh wave of protests against proposed job cuts at planemaker Airbus is due to take place across Europe.

Staff in France, Germany, the UK and Spain are set to stop work in a co-ordinated series of demonstrations against plans to cut 10,000 jobs.



Unions have mounted regular stoppages since Airbus revealed its radical retrenchment plan earlier this month.


Airbus argues its costs are far too high and must be reduced to speed up production and improve competitiveness.




It has fallen behind main rival Boeing in terms of new orders and the huge cost of building its new A380 and A350 models is weighing it down.


It is proposing to sell or close three of its 16 European factories and is looking for new investment partners for a further three sites.


Tens of thousands of workers are expected to take to the streets on Friday to vent their anger at the scale of the cuts, designed to save 5bn euros by 2010.



"This restructuring plan will have dramatic consequences but is not justified"

Joint union statement



Up to 20,000 people are expected to parade in the centre of Hamburg, where the company's principal German plant is located.


Demonstrations are also planned across France and Spain while several thousand people are expected to meet in the British town of Chester, close to the firm's plant in Broughton.


The European Metalworkers Federation said all its staff belonging to affiliated unions at factories in France and Germany would participate in the action.


"This restructuring plan will have dramatic consequences but is not justified," union leaders from all four affected countries said in a joint statement.


The stoppages are designed to keep the pressure on the firm's management and elicit political support ahead of presidential elections in France next month.


Airbus has pledged not to enforce any compulsory redundancies, saying half the cuts will be made among temporary staff and sub-contractors.


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15,000 Airbus workers based in Toulouse, France, went on a srike:


Workers strike over Airbus cuts


Thousands of French Airbus workers have gone on strike in protest at the company's restructuring plans, which include cutting 10,000 jobs.



The loss of 10,000 jobs has provoked anger among Airbus staff


Organisers of the day-long protest have warned of further action if the proposed redundancies are enforced.


France will lose 4,300 jobs as its share of the planned shake-up - with a chain of suppliers also threatened.


German workers took part in walkouts and stoppages last week in protest at the proposed changes.


'Not right'


In Toulouse, home of the Airbus headquarters, about 15,000 people marched on the streets with protests also taking place at four production sites across the country.


"It's not right that one of the jewels of European technology is cutting 10,000 jobs over four years, while its order book is full for several years," said the head of the CGT union, Bernard Thibault


On Tuesday, French Finance Minister Thierry Breton said that the government was prepared to buy a bigger stake in Airbus' parent company EADS to give it extra capital.


With elections in France looming, Airbus has become a hot political issue.


Socialist presidential candidate Segolene Royal and her rival Nicolas Sarkozy are both demanding that EADS is given help.


Airbus has been struggling in the wake of production delays to its flagship A380 passenger jet project, which has cost the firm about 5bn euros (£3.4bn; $6.6bn).


Last week the firm said it was suspending work on a freight version of he A380 super-jumbo.


Unions at Airbus's UK factories in Flintshire and Bristol have met with managers to discuss the proposed 1,600 job losses across the two sites.


Redundancy packages are expected to be drawn up over the next three months.

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