Airbus to Cut 10,000 Jobs

German workers have protested against the restructuring plan of Airbus. The European aircraft manufacturer is to cut 10,000 jobs, 3,700 of them among its sub-contractors in Germany, trade union sources said.

In addition, the company has decided to sell or spin off six of its European factories as part of its Power8 program, said Xavier Petrachi, a French official at the CGT union. The restructuring is intended to save the company some 5 billion euros in costs over the next three years.

The savings will come mainly in payroll reductions and procurement costs, and should achieve an increase in operating profit of some 2.1 billion euros per year -- beginning in 2010.

According to Petrachi, the Airbus plants at Meaulte in northern France, Nordenham in Germany and Filton in Britain will be spun off. Three other factories - Saint-Nazaire in western France and Varel and Laupheim in Germany - will be sold.

Airbus workers down tools in protest

The plan to sell or spin off the plants in Meaulte and Saint-Nazaire had already provoked fury among French trade unions on Tuesday, when the moves were only rumours.

On Thursday, workers at two German plants began preparing for industrial action to press demands to be kept open.

Workers at Varel did not begin the morning shift while workers at Laupheim called a rally at the plant's gates. "We are not on strike," said Varel works council member Jürgen Blümel. "We're fighting to keep jobs."

The main German trade union involved, the metalworkers' union IG Metall, called on the German government to guarantee the future of the plants at Varel and Laupheim, where some 2,500 people are employed. The head of the union in northern Germany, Jutta Blankau, said IG Metall would not accept closure.

"The issue is not final yet," she said. "We believe there is no need to take such stringent measures, because Airbus cannot be compared with other cases of restructuring."

Union anger

Trade union officials said the plan would damage the company, the world's biggest maker of airliners in 2006 and chief rival of US giant Boeing.

"The mobilisation (of workers) has to mushroom," said Xavier Petrachi. "If we allow Power8 through, it's the ruin of Airbus."

"The workers are totally fed up," said a spokesman for IG Metall.

Airbus said that no direct layoffs were envisaged "at the moment," implying the company plans to rely on early retirement, voluntary departures and job transfers.

International balance

Airbus is owned by EADS, which is jointly-controlled by the French shareholders media group Lagardere and the French state, and German shareholder car maker DaimlerChrysler.

Parity in cutting jobs was requested by French President Jacques Chirac and German

Chancellor Angela Merkel at a meeting between the two heads of state last Friday.

Merkel said on Wednesday that the "principle of fair distribution" appeared to have been respected in the restructuring plan for European aircraft maker Airbus.

Germany's Economy Minister Michael Glos said the restructuring plan offered a "good basis" for the future of Airbus. "We all agreed that this is about securing the long-term future of company and of a great European project," he told reporters. "I also think that the distribution of burdens looks balanced."

Superjumbo problems

The problems at Airbus were exposed by long delays in production of the A380 superjumbo airliner. Deliveries of the A380 are two years behind schedule, which puts a severe strain on Airbus's finances and damages the company's reputation among clients and investors.

The group is expected to report an operating loss for 2006, a sharp turnaround in its fortunes after years of bumper profits. It also faces pressure from a weakening dollar, which makes Airbus airliners more expensive in international markets.

In a statement, Airbus said: "The plan will make Airbus better prepared to face the challenge of the US dollar weakness, increased competitive pressure, the financial burden related to the A380 delays, as well as to meet its other future investment needs."