The template Airbus prepares for a turbulent journey. The plans of the manufacturer of military and civil aircraft go through reorganize the Airbus Defense and Space divisionhit by problems in the supply chain, the inflation and the wars in Ukraine and Israel. The first measure that the company’s management studies is the cut of up to 2,500 jobs by 2026. This division has 35,525 employees – Airbus as a whole has a workforce of 147,893 people.
Airbus Defense and Space has subsidiaries in SpainUnited Kingdom, Germany and Holland. It is these four countries that could be affected by the announced cuts. In the event that the French aeronautical manufacturing giant had plans to break up and sell the company in Spain – something that is not on the table now -, it would have to do so with one condition: the Government would have preference to acquire sensitive military assets for national security. This is an agreement signed in 2021 and reflects the company in its annual results report corresponding to 2023.
The text details that “in February 2021, Airbus SE and the Spanish State signed an agreement relating to the protection of essential security interests of the Spanish State (the “Spanish State Security Agreement”). According to the State Security Agreement Spanish, certain sensitive Spanish military assets are in the hands of a subsidiary of the Company (…) Airbus SE granted the Spanish State a preemptive right to acquire the sensitive assets.” Finally, it is specified that the preemptive subscription right applies in the event that “the Spanish Defense Holding wishes to sell sensitive assets to an entity outside of Airbus or outside Spanish territory. In such case, The Spanish State has the right to acquire sensitive assets“.
Airbus Defense and Space is dedicated to the manufacturing of manned military air systems, as well as the creation of space telecommunications systems for a wide range of civil and military systems. Among other things, it also develops missile systems and space launch systems. Its weight in the company’s billing is almost 11.5 billion euros. The entire group earned 65,446 million euros last year.
The Airbus cutback plan
The company is seeing its financial results affected – its profit has fallen by 46% -, something reflected in its 2023 results report. “The adjusted EBIT of Airbus Defense and Space was reduced to 229 million euros (2022: 384 million euros). The decrease reflects charges of €0.6 billion resulting from the update of the estimate at completion (EAC) of certain Space programs, partially mitigated by the performance of the rest of the business.”
The poor performance of this division is due to higher than expected expense items, especially in the aerospace business. For this reason, Airbus plans to include a “more effective and efficient” organizational structure for the division, especially at the headquarters. The company has already announced its intentions to the unions and has committed to opening a consultation period to address how to undertake its plans.
The CEO of Airbus Defense and Space, Mike Schoellhornhas pointed out that in recent years the sector and its division “have been affected by a rapidly changing and very challenging business context” due to problems in supply chains, wars and inflation. The company has already undertaken some transformations in 2023 that “have begun to bear fruit” in operational performance, but now it wants to take “the next steps,” he said in statements reported by Europa Press.
In addition, he indicated that Airbus “has a long history of acting as a responsible employer in difficult situations” and that this time will not be different, but he has stressed the need to adapt in order to maintain the division. Airbus does not foresee mandatory actions for this template cutout and ensures that everything will be done in agreement with the interlocutors and based on the available legal measures.
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