Posted on 03/01/2007 8:09:17 AM PST by lowbuck
Airbus announced its long-awaited restructuring proposals yesterday, and French and German workers responded swiftly by staging a walkout.
The company plans to cut 10,000 jobs, outsource three factories and sell or close a further three. Despite a record order book worth €200 billion (£135 billion), the European aircraft manufacturer has been struggling with the weak dollar and the high costs of its inefficient structure.
Louis Gallois, the chief executive of Airbus, set out yesterday how he intended to simplify the company’s pan-European operations to free money and engineering talent to build the company’s next aircraft, the €10 billion A350. The restructuring proposals, called Power 8, are highly controversial and politicians across the Continent are wading into the debate.
Mr Gallois attacked the political interference and the bickering between governments over the company’s future, calling the situation a “poison”.
Trade unions were unhappy with the restructuring and have threatened industrial action. German and French workers walked off the job yesterday in protest at the redundancies.
Power 8 calls for Airbus to outsource more work to suppliers. The company takes only about 25 per cent of its components from third parties, compared with 80 per cent for Boeing and 75 per cent for Embraer. The A350 will source about half from third parties, and Airbus has started the process of outsourcing by putting three of its component factories up for sale: Saint-Nazaire, in France, and Varel and Laupheim, in Germany. If no buyer is found, these factories are likely to close. Airbus will seek joint-venture partners for three other factories: Filton, near Bristol, Meaulte, in France, and Nordenham, in Germany.
Mr Gallois said that these factories could become wholly owned by the joint-venture partner. By outsourcing these facilities, he said, Airbus would be able to spread its investment costs and risk.
Airbus was also trimming its 55,000strong workforce, with 3,700 jobs to go in Germany, 3,200 in France, 1,600 in the UK, 400 in Spain and 1,100 in Toulouse, the corporate headquarters. About half of these jobs entail contractors; the other half will be offered early retirement.
Airbus was also attempting to streamline its Europe-wide operations. In future it will assemble one aircraft at one site, rather than the present system of carrying out construction in Hamburg and Toulouse. For example, the A350 will be built in France, but Germany will get the A320 when it is revamped in about eight years.
Airbus will also streamline where the key parts of its aircraft are built, halving the number of core factories – or centres of excellence – to four. Germany will be responsible for the fuselages, Spain the tails, Britain the wings and France the interiors and electrical systems.
Joint-venture partners sought
Airbus is seeking joint-venture partners to invest in its Filton factory. Filton, near Bristol, is one of three plants that the aircraft manufacturer is outsourcing as part of cost-cutting measures.
As The Times reported last week, four potential partners are understood to have been approached: GKN, Finmeccanica, Saab and Spirit AeroSystems. There had been concerns that Filton would be one of three factories Airbus has decided to sell or close.
Instead, the company will outsource about 50 per cent of operations at Filton, which is where Concorde was built in the 1970s. The joint-venture partner could then be allowed to buy out the facility in the future.
Airbus will retain wing design work at Filton, while its partner will make wing components. The wings themselves will be built at Broughton, North Wales.
More Airbust ping materials
I don't blame 'em..pure torture;-)
EADS tower, this is AIRBUST Zero One.
Flameout on Engines 1, 2 and 4.......
Mayday, Mayday, I'm goin' in.............
According to a local rag Wales is loosing 1500 jobs we can ill afford. But the French empoyment laws and militant socialism should make it a bigger issue over there. Thatcher taught the Welsh how to bow their heads in the wake of the inevitable.
They'll need to take that up with the Department of Redundancies Department!
I'am going out today and buy some Boeing Stock!!!...
Why are any planes built in Europe or America anymore?
Chinese labor is quickly trainable, and is far cheaper than either place. True efficiency is found by outsourcing all heavy manufacturing to China. The "China" price can't be beaten. Surely none will argue for the economic inefficiency of employing high cost European or American laborers who are fully replaceable by a Chinese at a quarter of the price.
Airbus needs to bite the bullet and export all manufacturing to China. Boeing will be unable to compete in those circumstances, and will soon do the same. Nationalistic concerns about employing AMERICAN or FRENCH workers are passe. A worker is a worker, just another cost of production. Business is about maximizing profit to shareholders. Nationalistic concerns about employment have no bearing on that. It is inefficient to employ Americans or Europeans. The China price is unbeatable. In the interest of shareholder returns, the quicker American and European assembly lines are shut down and transferred to China and India, the more efficient for the overall profits of the company. That's what counts in capitalism.
The French and Germans are so quaint, trying to use government power to protect FRENCH people and GERMAN people.
Airbus is caught in a government squeeze. To a lesser extent, fortunately for business, so are the Americans. Toyota builds cars in Ohio. But the same car could be built in Sichuan and imported to America for a third of the price, then sold at 30% off the retail American price. Nobody could compete with that!
It's time to shut down Western manufacturing and transfer it all to China. The workers there don't strike, they are trainable. They are not unionized. And there's no political ramifications of laying them off. The China Price is unbeatable. And the first company to fully realize that and GET OUT of America and Europe, will be the one that maximizes profit.
In a global capitalistic marketplace, economic nationalism and protection of domestic jobs is a chumps game that cuts into profits for investors. Capitalism is about maximizing profit. Spending more than you have to on a commodity, labor, is bad for profits, and that's dumb business.
Shuffling deck chairs on the Titanic bump.
I think you are a damned fool. We cant and wont fully surrender our industrial base to communist china.
Looks like they are all bozos on that Airbus!
Great satire. It cuts uncomfortably close to the truth which, of course, is what satire is all about. I'd like to laugh but I can't.
Quality standards in Chinese manaufacturing are not to the exacting standards they need to be to manufacture Airframes. Given time they will be, but even then it will be some time before travelers, air carriers, and insurance companies grow accustomed to the idea that Chinese labor and engineering can produce reliable airframes.
I would also say that by that time (20 or 30 years) Chinese prices will have found equillibrium with western pricing for like products. IOW Chinese labor and manufacturing will enjoy a higher wage and standard of living.
"French and German workers...the high costs of its inefficient structure."
article - nutshell
Why don't we just lend them a few (thousand) illegal aliens?
It'll help us both out.
???
I do not get it.
So many gloating over this news.
Airbus is taking the big hit, reorganizing and will finally be run in a sane manner.
In reality, this is good news for AirBus and bad news for Boeing.
I'd have much rather that these changes were never made.
Maybe it is me...
That WAS sarcasm....wasn't it???
I do not think so.
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