Bitter it may taste, shrill it may sound, and sleeplees nights it may cause, but it is true. In a major shake up, Airbus—the European aircraft manufacturer—has thrown a big shock to its employees. Before coming to the details of the shock, a peep into the company’s resume.
Name: Airbus Created: 1970 President, CEO: Louis Gallois Employees: 57,000 Turnover (2006): 26 bn (Euro)
Total aircraft sold(Feb. 2007): 7187 Delivered: 4598 Headquarters: Toulouse (France)
Facilities: 16 Rival: Boeing Airbus announced on February 27, 2007, that it would shed 10,000 jobs across four European countries and sell six of its units. On the same day the hapless workers did what was expected of them—downed tools and staged protests. The protesting workers at Airbus’s factory at Meaulte, northern France, were seen picketing outside the factory gate after holding up production a day earlier. To be fair to Airbus, its management entered talks with unions before the job loss and sale was formally announced. But the talks did not mollify the agitated workers.
Job shedding and hiring of units are a part of Power8 restructuring plan unleashed by Airbus to save itself from increasing loss of its ground to the arch rival, Boeing Co.
Airbus’s Power8 strategy was first mooted in October 2006, but sparked a split between France and Germany over the distribution of job losses, and the placement of future ones. Later, the two countries agreed to share both job losses and new technology.
The Power8 plan, if finalised, would mean a 9 per cent reduction to Airbus’s 55,000 employee strength.
Questions
1. Why should Power8 focus on shedding jobs to save on cost? Are there no alternative strategies?
2. Will the proposed shedding of jobs and sale of six units help Airbus survive the intense competition from Boeing?