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The Shadow of the Olive Tree

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01 March 2007 Blog Home : March 2007 : Permalink

Airbus Thoughts

Airbus finally announced the redundnacies it is seeking as a result of its A380 cockups and the axe falls most heavily in France. The losses are 1600 is the UK, 400 in spain, 3700 in Germany and 4300 in France. Needless to say the French workers are upset and going in strike. Obviously they want their jobs back - despite the fact that Airbus is seeking to cut its workforce primarily through voluntary redundancies and early retirements - but going on strike, and thereby making the company's position worse, seems to be remarkably selfish and stupid. Anyone who reads the news should be aware that if the A380 is delayed even more then it will lose more orders and possibly, if this goes on too long, result in the entire company going under. Hence anyone who wants airbus to survive ought not to be doing anythign that could lead to further delays.

On the other hand this is France, a land where the trades unions seem to be particularly unaware of basic economics and the laws of cause and effect. It is also, of course, two months before the presidential election so it is not at all improbable that the unions are expecting that the presidential candidates will promise to fix things if they make enough noise, indeed Segolene Royal has already shot her mouth off in that regard:

In France, presidential candidate Segolene Royal said she would seek to freeze the job cuts if elected, but rival Nicolas Sarkozy said politicians should stay out of the company's affairs.

In other words the unions are hoping that the French taxpayer will be on the hook for some sort of subsidiy to stop Airbus cutting these jobs. It is entirely possible that both major candidtaes will indeed make soothing noises but it is going to be hard for them to actually do anything constructive because these sorts of state aid have been ruled illegal by both the WTO and the EU. It isn't impossible that someone will come up with a fix but I'm not very confident because last weekend l'Escroc and German Chancellor Merkel were poking their noses into the business and agreeing that the cuts would be spread equitably. If the two leaders and their aides had thought state assistance was possible they would probably have had different discussions with Airbus.

On the gripping hand this is French politics and it is not beyond the realms of possibility that the 10,000 job cut announcement is a sort of smokescreen and the actual jobs cut will be say half that. In other words the politicians and airbus management have deliberately overstated the initial cuts in order to allow themselves to be "bargained" back to the amount they actually want to lose. In such a case it seems unlikely that the cuts in the UK and Spain will be reduced so what happens is that France and Germany also lose around 1600 jobs, the same as the UK amount.

I despise l'Escroc and Vile Pin