EADS Slammed For Job Cuts Amid Airbus Success
The parent company of Airbus has come under fire over plans to cut 5,800 jobs amid a downturn in defence orders.
EADS was blasted by politicians in France and Germany for the cuts, but its chief executive said that ignoring weak defence and space markets would have put even more jobs at risk.
It said a three-year reorganisation of its defence and space activities would affect 4,500 jobs on its main payroll, of which 1,500 would be redeployed to commercial planemaker Airbus and helicopter unit Eurocopter.
The firm issued figures showing that the largest burden of job reductions would fall in Germany, where 2,000 jobs would be cut compared with 1,260 in France and 557 in Spain.
Another 450 jobs would go in the UK amid a "consolidation of activities" around three main sites at Stevenage, Portsmouth and Newport.
The plan calls for between 1,000 and 1,450 forced layoffs and EADS will not renew 1,300 temporary employment contracts.
"We appeal to the aerospace company to be as careful and socially circumspect as possible in cutting these jobs and assume that the cuts will not be to the disproportionate disadvantage of German sites," Berlin's economy ministry said.
In France, the socialist government said it would not accept forced redundancies.
"This company makes money ... and if it wants to restructure and adapt, fine. But it also has a duty ... to adopt measures to avoid any redundancies," labour minister Michel Sapin said.
"For France, it will never be accepted, because it would not be acceptable, that a company like Airbus or EADS should cut overall employment while it still has the capacity to re-absorb anyone losing their job."
The job cuts are the first since EADS negotiated greater independence from governments that collectively control 28% of its capital earlier this year, giving them a veto over national security but no control over industrial issues.
CEO Tom Enders said EADS had acted to head off even worse job cuts in the face shrinking European defence budgets and rising competition and weak orders in the space market.
"Is it good management to wait until you drive into the wall? Or is it good management to be proactive and when you see the wall is coming, you hit the brakes and take measures?" Mr Enders said.
Shares in EADS fell 0.7% on news of the cuts.
Societe Generale analyst Zafar Khan estimated the restructuring would cost EADS ?250m to ?300m (£210m to £250m) in one-off charges but would provide annual gross savings of ?375m (£310m) once completed.
Compulsory redundancies are relatively rare in France and Germany, where EADS has its main operations, and so far the majority of its 140,000 workers have been shielded by the strength of its fast-growing Airbus commercial business.
Unions in France and Germany vowed to resist any sackings.
The cutbacks coincide with plans to merge the company's defence and space divisions into one unit combining its share of Eurofighter combat jets and Ariane space rockets from January.
EADS will also change its name to Airbus next year.
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