National wrangling delays power8 restructuring plan
The future of many Airbus production facilities remained in the balance last week as discord between parent company EADS's national shareholders, keen to protect high technology jobs in their respective home countries, prevented any immediate consensus over the airframer's restructuring plan.
Airbus chief executive Louis Gallois was all set to reveal details of the Power8 plan designed to cut costs, improve efficiency and combat a weak dollar until Franco-German wrangling over the future of high value-added composite technology work led to the announcement being shelved until agreement is reached.
Gallois himself stresses the need to overcome national sensitivities - and quickly. "I made proposals which I deem balanced, both from an industrial and a technological point of view, and which serve our objective of economic competitiveness," he says, adding: "I wish that they can lead to the consensus we urgently need. Airbus cannot delay any longer implementing Power8."
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The company has already seen protests by works council and union representatives at manufacturing sites in France and Germany with the stakes being raised yet further when the restructuring featured high on the agenda of German chancellor Angela Merkel's regular policy meeting with French President Jacques Chirac last Friday (23 February).
The outline, however, was revealed by French Prime Minister Dominique de Villepin who confirmed that the business is likely to cut up to 10,000 jobs under the plan with plant closures centred in both France and Germany.
National sensitivities are understandable - France, Germany, Spain and the UK have all invested heavily and it is reasonable for them to expect something in return, in the form of job retention.
Germany, in particular, is adamant that it should retain the high-value work carried out at its sites, although it is understood that plants in Nordenham and Varel which employ around 3,500 employees could easily become casualties. Two other plants, in Buxtehude and Laupheim, comprising 1,500 staff, also feature on the disposal list as do France's Méaulte and Saint Nazaire facilities.
Shifting the A320 final assembly line to Hamburg, as has been suggested, was also received with little grace, with this final part of the build process accounting for around a mere 6% of the aircraft's production value.
Meanwhile, as industry speculates on how Airbus will shape its manufacturing strategy, it is becoming increasingly clear that workshare in the field of advanced composites - technologies which will play a critical role in future Airbus programmes - is becoming a major sticking point in the discussions.
"The battle lines are most definitely being drawn on composite technology within Europe," says aerospace industry expert David Pritchard of the USA's University of Buffalo.
The UK government, keen to ensure that the UK retains a pivotal role in Airbus programmes despite the departure of 20% shareholder BAE Systems last year, is investing heavily in composites to boost expertise in its applications within wing technology.
Speculation is also mounting that Airbus UK could set an example for the rest of the business, with its adoption of Boeing's system-integration business model.
"With the anticipated ramp-up of production and the laying off of 10,000 people, the work is going to have to be done by someone," says Pritchard.
The UK division is, meanwhile, expected to bring in partners, such as GKN, to take over and develop elements of its business such as parts of the Bristol Filton site.
Transferring responsibility to GKN would give Airbus the added advantage of more closely aligning itself with Boeing's 787-driven manufacturing strategy, where 90% of key components and subassemblies are designed and manufactured by external suppliers.
And while industry sources insist that discussions between Airbus and GKN remain "ongoing", even if this particular deal does not come to fruition, the UK is well-placed as a home to other tier-one businesses such as Cobham, Meggitt and Smiths Aerospace, for example, that could fulfil a similar role in technology partnering.
Germany lacks this indigenous tier-one base and industry sources suggest this could explain its government's current dismay due to the fact that it simply cannot find supplier partners to deliver its composite activities.
External influences will undoubtedly have their impact too. The ongoing World Trade Organisation dispute could overturn the traditional means of funding new Airbus aircraft and lessen the rights of national stakeholders to demand job creation and retention.
Russia's interest in seeking to boost its influence in EADS, allied to a rumoured bid from the Middle East for a 10% stake, also stands to radically change the operating landscape at Airbus, where aircraft orders have until now sometimes been influenced by considerations such as workshare offsets.
Source: Flight International
