Germany and France are preparing to hold a high level meeting to address how an overhaul of Airbus will affect jobs in their respective countries. German Chancellor Angela Merkel and French President Jacques Chirac are expected to jointly hold talks with the plane maker’s parent company, EADS, near Berlin. The French president had hinted that he would take efforts to resolve the Airbus crisis in a spirit of partnership. The meeting of the leaders is being held in Germany and both the leaders are extremely keen to minimize the losses in their nation as the decision will have serious implications on the workers of Airbus, which has in turn took the shape of a political issue. According to Reuters news agency, Airbus chief Louis Gallois has drawn up a compromise to break the deadlock over job cuts. On Tuesday, German government spokesman Thomas Steg had insisted that no decisions was taken as part of the ‘Power 8′ restructuring plan put forward by Airbus head Louis Gallois. The official version reflects that German government is of the view that management should be left to take the decisions on where the cuts would fall which certainly contradicts the visibly evident political discomfort. Politicians in both France and Germany are finding themselves in tight spot as they find it difficult to move away from the prevalent impulse to safeguard employment. Further, the forthcoming presidential elections France and Angela’s Merkel’s precarious coalition government are struggling hard to cope up with health care and labor market changes. In the meanwhile, analysts argued that the longer Airbus managers are forced to delay, the more difficult it will be for the company to bounce back.
French President Nicholas Sarkozy’s vow to reopen discussions about the Airbus restructuring plan has triggered concerns that UK might face further job cuts than those set out earlier this year under Airbus’ Power8 restructuring plan. UK MP, Peter Luff, assert that Mr Sarkozy might attempt to reduce the thousands of job losses proposed by Airbus in France. As part of 10,000 job cuts across Europe due to rising technical costs on the A380 superjumbo aircraft, 1,500 are coming from Airbus’s 11,000-strong UK workforce. Although there is no prior evidence of such type of development, but the committee advised UK’s government to be alert of the possibility, as BAE Systems has sold its 20 percent in Airbus last year, the UK is without influence on the EADS board. Airbus’ plants in Britain have secured 20 percent of work on the company’s new A350 aircraft and are now the centre of excellence for wing making. U.K. lawmakers have raised their voice against it and advised Britain to fight against any effort by French President Nicolas Sarkozy to shift a greater share of Airbus jobs from U.K. to France. It’s notable that airbus has lost its No. 1 place to its only rival Boeing Co., although it has done well in the Paris air show, but that’s not enough to emerge from the losses. Image Source
EADS, the parent company of airbus plane maker, might soon overhaul its management as France has forced Germany to take direct stake in EADS to guarantee its interests in the company. EADS is regulated from both France and Germany. Company’s shareholders are criticizing management from a long time and after loosing its acme position to only rival Boeing, shareholders intensified the pressure. France and Germany have begun to discuss changes to the management structure of The European aerospace and defense group. France has asserted that country will do their best to solve the EADS fiasco, but also warned that it could sell its shares if no conclusion is reached. Germany charged that France is imposing unnecessary pressure to change the balance of the shareholders’ pact, under which both sides have equal say. German Chancellor Angela Merkel and Sarkozy will discuss the woe in their schedule meeting in Toulouse on July 16 and hopefully will come up with a consensus. Shareholders hope that both leaders will examine the issues of future financing for the group, which is facing medium-term financial pressure on the development of the new aircraft, as well as possible changes to the Franco-German shareholder pact. The leaders might even address its reconstructing plan viz. Power 8. Image Source