EADS details Defence and Space restructure plans

EADS has presented a plan to the European Works Council that will see its future Airbus Defence and Space Division (Airbus DS) and corporate functions headcount reduced by 5,800 positions until the end of 2016.

In July it was announced that the defence and space business of the group would be consolidated into one new division and rebranded as ‘Airbus Group’.

In a statement issued on 9 December, EADS said that of these 5,800 positions, up to 1,500 alternative 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 to 1,450 employees, subject to the achievement of the voluntary measures.

Tom Enders, CEO, EADS, said: ‘We need to improve our competitiveness in defence and space – and we need to do it now. 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.’

The group will also seek agreements on labour cost reductions which could help mitigate the social impact of the restructuring plan. This will be dependent on negotiations with its works councils.

As part of the overall headcount reduction, corporate functions and services will be slimmed down by around 500 positions.

Thierry Baril, chief human resources officer, EADS and Airbus, said: ‘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.’

The restructure will see a substantial consolidation of sites across Germany, France, Spain and the UK, and for cost and operational reasons, the new division – Airbus DS – will simplify and consolidate its legal structures.

Airbus DS will start operating at executive level as of 1 January 2014; and 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.

Timing and sizing of a one-off charge related to this plan is under evaluation.