GRAHAM WARWICK / NEW YORK
European manufacturer exploits flexibility in workforce agreements to minimise effects of production downturn
Airbus plans to have cut the equivalent of 6,000 jobs by the end of this year, but expects to limit the actual workforce reduction to 800-1,000 people by taking advantage of flexibility in its agreements with employees and subcontractors. The move is part of a plan to maintain aircraft unit costs as the European manufacturer cuts production rates.
Chief operating officer Gustav Humbert says measures will include reduced overtime and short-time working. At the Hamburg, Germany, plant, for example, the elimination of the equivalent of over 500 full-time jobs will be met without lay-offs, he says, although some employees will be working short time. Airbus has introduced voluntary redundancies at its UK plant and is pushing for early retirements at the St Nazaire, France, site.
While Airbus is reducing its workforce by 800-1,000 to around 45,000, Humbert says this is equivalent to cutting 5,000-5,200 full-time jobs, increasing to around 6,000 full-time positions when wage reductions are taken into account.
Briefing analysts in New York earlier this month, chief executive Noel Forgeard said the cuts "would not be achievable within the former Airbus structure". The company plans to reduce overhead costs by €400 million ($352 million), or 10%, and research and development expenditure by €200 million, he said. Airbus has frozen capital expenditure and recruitment and reduced R&D spending, except on the A380, to protect cash. "Cash is our obsession," Forgeard told analysts. "This year, we will be cash-neutral before customer financing."
Airbus plans to deliver 300 aircraft this year, down from 325 last year, and 300 in 2003. This is an 8% cut but, because production had reached an annual rate of 350 aircraft before 11 September, the capacity reduction required is 16%, said Humbert. The cut will consume almost all the capacity flexibility built into the firm's agreements with its workforce. "We had 20% flexibility last August. That will be almost eaten up by the end of 2002," he says.
Forgeard told analysts that Airbus's operating profit this year would be €1-1.2 billion, down from €1.6 billion in 2001.
R&D expenditure, principally on the A380, will rise to €1.9billion this year, from €1.6 billion last year. The company will continue its "cautious approach" to customer financing, he says, with Airbus's financial exposure decreasing $300 million last year to $3.5 billion.
Source: Flight International
