As Labor Unions Gear Up For A Fight

Germany's economy minister Michael Glos has pledged to fight what he views as disproportionate job cuts for his country expected to come as part of a restructuring plan set for unveiling by Airbus on February 20.

Glos fears Germany may bear the brunt of expected job cuts since Airbus maintains its headquarters and core assembly sites in France.

Glos told BBC news, "The Airbus is also a German product and not just a French one - and we will keep an eye on that. We will go into the negotiations self-confidently. We are, after all, the largest customer for EADS on the military side."

Airbus' parent EADS is a pan-European company with ties to governments in several countries. Its corporate structure is designed to prevent any one country from having too much control, but that ideal may be under fire as ownership levels between the principals have changed recently.

Add to that the current financial crisis, caused in part by delays with Airbus' A380 superjumbo jet, and EADS finds itself under tremendous strain as all the players involved position themselves to minimize exposure to the coming storm.

Glos' fears are based in part on what is seen as an imbalance between French and German influence over EADS' operations. Between the French government and French company Lagardere, France enjoys nearly 30 percent of EADS.

Conversely, German companies hold only 22.5 percent, until recently all held by DaimlerChrysler. As ANN reported, DaimlerChrysler sold 7.5 percent of its stake to a consortium of German banks and regional German governments. While DaimlerChrysler retains its voting rites  -- and thereby its influence -- as a condition of the sale, some may view the move as a lack of confidence in Airbus.

Meanwhile, the major unions representing many of Airbus' 57,000 employees have already made their presence felt. Press leaks indicate Airbus plans to cut 10,000 jobs, and German workers believe up to 8,000 may come from their ranks. Should that prove true, they have threatened to slow production -- and backed that threat with a walk-out on February 5 from four of Airbus' seven German plants.

And in a new development, Tuesday unions from France and Germany say they've joined forces to ensure any Airbus job cuts are distributed fairly. There are also indications unions from Spain and the UK also wish to join in a cooperative labor effort.

According to Forbes, France's Federation Force Ouvriere de la Metallurgie and Germany's IG Metall unions issued a joint release Monday urging their members to remain mobilized.

Whatever happens, it's clear Airbus must do something. Despite near-record orders and deliveries in 2006 the company still recorded a loss. The company says it needs to slash $2.7 billion from annual costs by 2010.

It's easy to understand why the unions are so worried.  With one jet -- the A350 XWB -- just set to begin development, and another -- the A380 -- nearing first deliveries, there seems to be few places the company can generate savings other than cutting labor.

FMI: www.airbus.com