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EADS Union Urges Caution on Job Losses, Plans Day of Action

European Aeronautic, Defence & Space Co. (EAD)’s works council urged a collaborative approach on what may be thousands of job losses as it integrates defense and space units, with one of its biggest unions calling a day of protests.

The number of posts to be eliminated has not been settled, Toulouse, France-based EADS said in an e-mail after German news agency DPA reported 8,000 will go, adding that employee groups will be briefed on plans before numbers are made public.

“We demand clear communications, not stalemate, co-determination, not confrontation, and long-term thinking not short-term profit fixation,” Ruediger Luetjen, who heads the company’s European works council, said in a statement. “It’s up to management if they want to tackle the upcoming revamp in a constructive or confrontational manner.”

EADS will merge defense and space operations next year after struggling to build up the military business as European governments pare spending. The plan, which will mostly affect employees in Germany and France, is part of a revamp that will see the business take the name of jetliner unit Airbus.

The IG Metall union will hold press briefings tomorrow in Hamburg and Bremen -- two of EADS’s biggest German sites -- in conjunction with the works council and representatives of staff at the space and defense businesses.

‘Deep Cuts’

The day of action, planned for Nov. 28, will take place across Germany to highlight the threat of “deep cuts,” the union said in a statement.

EADS management will brief worker representatives on the plans on Dec. 9, two days ahead of a wider presentation it has scheduled for investors on its corporate plans.

Celine Fornaro, a London-based analyst at Bank of America Merrill Lynch, said in a note that the number of job cuts reported by DPA, which cited people with knowledge of EADS’s intentions, “is way more than anyone had anticipated,” representing 17 percent of the affected workforce. Fornaro had previously forecast that 2,250 positions might be scrapped.

Merging units should aid efforts to lift operating margins for defense and space activities to 10 percent, Fornaro said.

EADS Chief Financial Officer Harald Wilhelm said Nov. 14 that work on plans to combine the operations were “progressing well,” describing the reorganization as a “critical step” in a push to improve profitability and competitiveness.

Shares of EADS traded 1.1 percent lower at 51.61 euros as of 2:11 p.m. in Paris.

To contact the reporters on this story: Richard Weiss in Frankfurt at rweiss5@bloomberg.net; Andrea Rothman in Toulouse at aerothman@bloomberg.net; Robert Wall in London at rwall6@bloomberg.net

To contact the editor responsible for this story: Benedikt Kammel at bkammel@bloomberg.net

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