FRANKFURT–Airbus could see its narrowbody production being disrupted “at short notice” as German union IG Metall is preparing for so-called “warning strikes” in the escalating dispute over the future of aerostructures subsidiary Premium Aerotec.
“We are nearing a major conflict,” said Daniel Frederich, IG Metall district chief for Northern Germany. “We were always concerned that Airbus may use the pandemic for a restructuring of the company. That is exactly what is happening now.” Airbus and IG Metall are due to meet for two rounds of talks on Sept. 1 and 7. Should talks collapse, industrial action could follow. Warning strikes are a mechanism in Germany’s labor conflict processes that allows unions to call for short strikes to increase pressure. They typically last several hours and precede longer strikes.
Airbus has announced substantial changes for Premium Aerotec (PAG) and some of its own German sites. They are to be merged into a new, larger aerostructures subsidiary specialized in manufacturing complex fuselage sections and subassemblies and pre-final assembly equipage. The group plans to spin off the detailed parts business from PAG and sell it off to an external investor. Airbus Chief Financial Officer Dominik Asam said recently that, should the sale fail, a significant number of jobs in the unit will have to be cut. According to Friedrich, management has now told IG Metall that about 1,000 of its more than 4,000 positions would be affected.
IG Metall has not opposed the plans to merge PAG and the Airbus plants per se, but it is against the sale of the small parts unit. Also, the union insists that management provide guarantees for the future affiliate when it comes to work packages on future aircraft programs. “So far, we have not received acceptable proposals,” Frederick said.
The union now demands a new collective bargaining agreement covering the terms of the transition to mitigate the risks for employees. Under the requested arrangement, any worker made redundant is to be compensated with at least three months’ pay and a €25,000 ($29,477) base sum. Also, IG Metall demands 24 months of retraining measures for affected employees. Friedrich said the union is willing to settle for less depending on guarantees for future work packages.
Unions and labor representatives inside Airbus Germany are concerned that German sites are at risk of losing work when Airbus launches a new narrowbody program. Holger Junge, head of Airbus Group’s workers council, expects management to decide on a new aircraft within the next two to three years, with entry-into-service in or around 2030. However, that view conflicts with Airbus’ own publicized timeline of preparing a next-generation narrowbody powered by hydrogen around 2035. Airbus CEO Guillaume Faury has said that no conventional aircraft is planned to be developed before then.
The threat of strikes comes at a difficult time for Airbus, as it begins to ramp production back up to pre-crisis levels. The OEM plans to increase its A320neo-family delivery rate to 44 aircraft per month in the fourth quarter, up from 40 at the beginning of 2021. The rate is to rise to 63 in the second quarter of 2023 and possibly to 70 a year later. Also, the A320neo family is currently the only profitable civil aircraft program at Airbus. With widebody production staying at low levels, any disruption to narrowbody output has big consequences for company cash-flow and profits.
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