Flight mode

Turbulence ahead as Airbus weighs job cuts amid delays

Airbus Produktion
Something's missing here. Source: DPA

By the end of last year, Airbus really seemed to be taking off. The European consortium was ramping up production in order to deliver as many jets as possible. But that momentum has began to stall and employees suddenly face the prospect of layoffs or relocations.

Airbus is grappling with problems and delays, as well as further production changes on the horizon. So this week, managers will enter negotiations with the company’s European works council and local employee representatives about potential layoffs and relocations.

Airbus has already adjusted assembly forecasts for its A380 super jumbo, the world’s largest passenger airliner. On February 15, Chief Executive Tom Enders said a dozen A380s would be delivered by the end of the year and only eight in 2019. After that, the annual rate would fall to six. The company has also said it would need more time to complete its A400 M military transporter. Last year, the company managed to deliver 17 units — a record — but this year it has reached agreements with buyers to postpone delivery dates.

The French magazine Challenges reported Airbus may be forced to cut as many as 3,600 jobs due to the renegotiation of the A380 and A400 M’s expected shipment. But steady or rising orders for other jets — such as the plane maker’s bread-and-butter machine, the A320, as well as the A330 and the A350 — could protect some German sites from such major job cuts.

China will soon overtake the US as the world's largest aviation market.

Orders of the A320 are expected to rise from 581 in 2017 to more than 600 this year, of which 400 will be A320neos with fuel-efficient engines. Production of the newly designed A330 will also begin, and the long-range, wide-body A350 will see its numbers increase too. In all, Airbus expects to move 800 aircraft this year —up from 718 in 2017. These developments should help to counter the slowdown in A380 and A400 M manufacturing.

Although the A380 and the A400 M are produced in Augsburg, the southern German city is also where fuselages for the Eurofighter — the dogfighter of choice for several European air forces — are assembled, so the degree to which the workforce there is imperiled remains to be seen. Airbus recently secured an order of 24 Eurofighters from Qatar.

In February, Mr. Enders said he was confident that more orders from old and new customers would follow. Sources close to the company said employee numbers were therefore likely to remain stable.

Another Airbus site in Germany that could reportedly face job cuts is Bremen, where the company makes wings for many of its aircraft. If restructuring were to happen, Bremen could be spared for that reason.

But even if Airbus manages to weather its troubles with the A380 and A400 M, delays in its most important aircraft, the A320, are likely. That’s due to problems with the supply of engines for the A320neo as the manufacturers, Pratt & Whitney and the joint venture Safran/General Electric, struggle to keep up with demand.

Airbus doesn’t want to quantify the extent of its potential restructuring until after it holds talks with its works council. But one thing is certain: In the coming years, European production facilities could suffer as the company’s supply chain becomes more international.

China will soon overtake the US as the world’s largest aviation market. Beijing is pushing for Airbus to make more planes there, not just assemble them, and wants the company to produce full wide-body aircraft there in addition to the A320. Mr. Enders, for his part, has indicated he would have no problem with such a development.

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Thomas Hanke is Handelsblatt’s France correspondent and works out of Paris. To contact the author: hanke@handelsblattgroup.com

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