EADS (stock exchange symbol: EAD) today presented a restructuring plan for its future Airbus Defence and Space Division (Airbus DS) to the European Works Council.
This presentation follows a decision by the EADS Board of Directors in July this year to consolidate the defence and space businesses of the Group into one new Division and to rebrand EADS into “Airbus Group”.
“We need to improve our competitiveness in defence and space – and we need to do it now”, said Tom Enders, Chief Executive Officer of EADS. “With our traditional markets down, we urgently need to improve access to international customers, to growth markets. For that to work, we need to cut costs, eliminate product and resource overlaps, create synergies in our operations and product portfolio and better focus our Research and Development efforts. That’s what the restructuring and integration plan for our defence and space business is all about.”
Overall, EADS plans to reduce (headcount) 5,800 positions at Airbus DS and in Corporate / Headquarters functions until the end of 2016.
Up to 1,500 positions will be offered at Airbus and Eurocopter for redeployment of impacted employees. After non-renewal of temporary contracts (around 1,300) and application of additional voluntary measures, final redundancies are estimated in the range of 1,000 – 1,450 employees, subject to the achievement of the voluntary measures.
The Group also intends to enter into negotiations with its works councils to seek agreements on labour cost reductions which could help mitigate the social impact of the restructuring plan.
As part of the overall headcount reduction, Corporate functions and services will be slimmed down by around 500 positions.
Timing and sizing of a one-off charge related to this plan is under evaluation.
“Our people are key to our company’s success and we have a track record of constructive social dialogue that supports the company´s development. As the restructuring plan is of paramount importance for the future of our defence and space business, we are committed to mitigating the social impact of the necessary adjustments as much as possible”, said Thierry Baril, Chief Human Resources Officer at EADS and Airbus.
EADS is now launching the work with the Works Councils to find the right social measures and solutions for all impacted employees.
The restructuring plan for the defence and space businesses of the Group will result in a substantial consolidation of sites across Germany, France, Spain and the United Kingdom (see annex to this press release). For cost and operational reasons, the new Division – Airbus DS – will simplify and consolidate its legal structures.
The new Division will start operating at executive level as of 1 January 2014. After the consultation process with the works councils, expected to be concluded by mid-2014, the three entities – Airbus Military, Astrium and Cassidian – will be fully integrated and operational at all levels as Airbus DS.
EADS is a global leader in aerospace, defence and related services. In 2012, the Group – comprising Airbus, Astrium, Cassidian and Eurocopter – generated revenues of € 56.5 billion and employed a workforce of over 140,000.
- Restructuring plan presented to EADS European Works Council
- Concentration of sites across Group’s four “home countries” and consolidation of legal entities
- Reduction of 5,800 positions at future “Airbus Defence and Space” Division and Corporate functions
- France: The Group will divest its Corporate office in Montmorency (Paris); its functions will be redeployed to Suresnes where the Corporate Technical Office and Innovation Works workforce is already based. All Divisional Suresnes-based activities including personnel will be transferred to Elancourt or Les Mureaux as part of the future Airbus DS set-up. Both sites – Les Mureaux and Elancourt in the Paris region – will become the stronghold of the Group’s defence and space activities.
- Germany: Airbus DS Division will be headquartered in Ottobrunn. Some 1,000 functions, currently based in Unterschleißheim, will relocate to Ottobrunn. Another 200-300 Unterschleißheim-based employees will redeploy to other southern Germany-based Airbus DS sites. The Group plans to divest the Unterschleißheim site. Airbus employees, currently working in Bremen for the A400M Integrated Fuselage Assembly (IFA), Cargo Hold System (CHS) and further Cabin & Cargo related activities will be integrated into Airbus DS by the end of 2014 as part of the simplification of the Group’s legal structure.
- Spain: In the Madrid area, activities at San Severo and Castellena will be transferred to Getafe. The transfer of all Barajas-based activities to Getafe remains under study. In the Seville area, we will transfer the activities at San Pablo North to San Pablo South. The transfer of Tablada to San Pablo South is also being studied.
- United Kingdom: Here, the Group strives for a consolidation of activities mainly around three major sites, which are Stevenage, Portsmouth and Newport in order to maintain proximity to its key customers. Functions at smaller sites will be relocated to one of the three major sites.