EADS job cuts under fire from Germany, France | Business| Economy and finance news from a German perspective | DW | 10.12.2013
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EADS job cuts under fire from Germany, France

European aerospace company EADS has been criticized by Berlin and Paris for slashing 5,800 jobs as it downsizes its military business. EADS warns even more jobs are at risk if governments keep cutting defense budgets.

European Aeronautics Defense and Space group (EADS) had the obligation to avoid job cuts, French Labor Minister Michel Sapin said Tuesday, stressing that France's Socialist government would resist any forced redundancies.

It was EADS' duty to adopt measures to avoid all layoffs in France, Sapin told Europe 1 radio, and added: “This company makes money. It's a big company, it has many divisions … it is its duty to adapt to the situation.”

On Monday, EADS announced the loss of up to 5,800 jobs in its space and defense divisions under plans to restructure the units in the face of slumping defense expenditure by EU governments. The largest burden of job cuts will hit Germany, with 2,000 fewer jobs. It is followed by France, where 1,260 redundancies loom, and Spain, with 557 jobs to go.

Therefore, the German government also voiced its criticism on Tuesday. In a statement, the Economics Ministry appealed to EADS to be as careful and socially circumspect as possible in cutting jobs. Moreover, Berlin insisted that the restructuring did not disproportionately disadvantage German sites.

Germany's powerful metalworkers' union IG Metall already made it clear on Monday that it would not accept forced redundancies, and said talks to compensate workers might last for months. The looming cuts sparked protests around Germany in November

Meanwhile, EADS CEO Tom Enders has said he acted to head off even worse job cuts in the face of shrinking European defense budgets, as well as rising competition and weak orders in the space market.

Referring to the 2007 restructuring in the Airbus division, he said that he had been facing the same criticism then as politicians accused him of killing the company and chasing profits.

“We know we are doing the right thing,” he told reporters on Tuesday, and added that it was good management to hit the brakes and take measures when you see the wall was coming.

More job cuts looming

The EADS cutbacks coincide with plans to merge the company's defense and space divisions, which include Airbus Military, Cassidian and Astrium. However, the new unit, which is to be called Airbus Defense and Space, is already under pressure to trim its workforce further.

On Tuesday, the unit's designated Chief Executive Bernhard Gerwert said that more job cuts would be needed if the Eurofighter combat jet consortium did not win more orders before 2018.

EADS Chief Executive Tom Enders also said the recent restructuring program was not the last at the company, because it needed to become more competitive. EADS defense activities were under pressure, he admitted, after it had failed to merge with British arms giant BAE System in 2011.

Last year, a planned tie-up Between EADS and BAE fell through on opposition from Germany, which feared that a restructuring following the merger would cost jobs.

uhe/ph (AFP, Reuters, dpa)

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