Written - The Airbus Power 8 Restructuring Announcement and the Implications for Broughton

Following the unanimous approval by the EADS Board of Directors last Monday, Airbus presented the details of its Power 8 restructuring plan to the Airbus European Works Council yesterday and announced the creation of a new industrial and operating structure for the company.  Power 8 embodies strong cash reduction and cash generating efforts, which will enable the company to face the substantial challenge of the weakness of the US dollar, increased competitive pressure, the financial burden related to the A380 delays as well as meet its other future investment needs.  

A large part of the savings will be achieved through reducing the total Airbus overhead workforce by 10,000 over four years – in Airbus Deutschland around 3,700, in Airbus France around 3,200, in Airbus UK around 1,600, in Airbus Central Entity (Toulouse) around 1,100 and in Airbus Espana around 400.  5,000 of these positions are temporary or on-site subcontractors and where reductions begin immediately.  The other 5,000 overhead positions affected will be direct Airbus employees.

The 1,600 job losses in the UK will be split equally between the Broughton and Filton plants.  Of the 800 at Broughton 400 will be contractors’ jobs and 400 will be Airbus employees.  It is expected that much of the job losses will be achieved over the next 3-4 years through natural attrition.  

Airbus will introduce an integrated and trans-national organisation to support the implementation of Power 8 and the establishment of the new business model.  It is likely that the Centre of Excellence concept will be strengthened with four trans-national locations: Fuselage and Cabin (based in Germany), Wing and Propulsion (based in the UK), Rear End (based in Spain) and Aerostructures (based in France).  

Airbus will focus its industrial base on core activities with the consolidation of a robust supply chain and more work being outsourced.  Certain sites within Airbus are becoming “core sites” carrying out the assembly of major parts.  Broughton, with final wing assembly, will be one of these.  Filton will see the development of industrial partnerships where third parties will be invited to invest in the business.  This will assist Filton’s development from metallic to composite design and manufacturing technology.