• Germany's news in English
 

EADS to downsize defence business

Published: 07 Dec 2013 16:33 GMT+01:00

In the line of fire is not EADS' successful Airbus business, but the company's defence and space operations, both suffering a drop in orders that the company says requires urgent attention.

The restructuring is the brainchild of Tom Enders, the EADS chief executive whose bold plan to merge the European giant with Britain's defence group BAE Systems skidded off the rails last year after a surprise veto by Germany.

But Enders has made it clear that the company cannot continue as is with government clients increasingly resorting to cuts to the military as a sure way to shore up strained finances.

In the past weeks, Enders has been signalling his plans to the press, preparing the ground for announcements that are sure to raise the ire of unions, especially in Germany, where most of the cuts are expected to land.

Enders recently told a magazine in Bavaria, that "if defence orders are cancelled or reduced as has happened in Germany in recent years, an impact on production and employment cannot be avoided."

He said that EADS had lost orders worth several billion euros in Germany alone that the company had thought were certain.

The warning shot followed a separate report by the German news agency DPA that EADS is considering cutting its total workforce by 20 percent, or 8,000 employees, an alarming figure observers hope is a ploy to make the final number seem less drastic.

In November, Germany's biggest union IG Metall held an industrial action as a warning against the company's plans. In a letter to government, unions in France wondered why a company "with a 650 billion euro order book was not able to maintain job sites."

But the restructuring is seen as unavoidable after the failed plan to merge with BAE.

That was shelved after objections from Germany, which worried it would cause considerable layoffs.

No matter how deep, the cuts risk being followed by calls for political intervention in what could be the first challenge to the company's new governance structure, where governments no longer hold seats on the board.

Enders has rarely shied away from standing up to government pressure, a reputation that may have disserved him when it came to achieving his BAE
merger dream.

Ever since that failure, contacts between Germany's leadership, bogged down in post election coalition building, and Enders have been minimal, said analyst Christian Mölling from the German Institute for International and Security Affairs.

Monday's expected restructuring comes at a time when Airbus is responsible for 80 percent of overall sales at EADS.

That historic rise of Airbus came after a radical restructuring in 2007 in a plan that originally called for 10,000 job cuts, but in the end cost a less than expected 7,900.

EADS has said in recent weeks that no numbers have been decided, but German newspaper Suedeutsche Zeitung reported last week that a defence factory of EADS's Cassidian unit located north of Munich was already slated to be closed.

An EADS spokesman declined to comment on the report, telling AFP that it would reveal its plans Monday.

For more stories about Germany, join us on Facebook and Twitter

Your comments about this article

Today's headlines
Sudeten Germans give up 'right to homeland'
Sudeten Germans practising traditional dance at a gathering in 2014. Photo: DPA

Sudeten Germans give up 'right to homeland'

The Sudeten German Homeland Association has given up its claim to the group's former home in parts of the Czech Republic, quieting one of the final echoes of the Second World War. READ  

Minister draws fire over wage transparency plan
Families Minister Manuela Schwesig. Photo: DPA

Minister draws fire over wage transparency plan

Families Minister Manuela Schwesig confirmed on Sunday that she wants a new law allowing women to compare their wages with men doing similar work, provoking angry reactions from employers. READ  

Police wind down Bremen terror response
Heavily-armed police on patrol outside Bremen cathedral. Photo: DPA

Police wind down Bremen terror response

Police in Bremen said that the risk of a terrorist attack had been reduced in the city after they arrested two suspected arms dealers. The city remains under high alert, with special protection for the Jewish community. READ  

Germany's Schäuble softens Greece tone
Photo: DPA

Germany's Schäuble softens Greece tone

German Finance Minister Wolfgang Schäuble said Sunday Greece's new hard-left government needs "a bit of time" but is committed to implementing necessary reforms to resolve its debt crisis. READ  

UK Pegida rally dwarfed by counter-demo
Photo: DPA

UK Pegida rally dwarfed by counter-demo

An estimated 375 people turned out for the Germany-based PEGIDA movement's first demonstration in Britain on Saturday, but were outnumbered by a 2,000-strong crowd of counter-protesters, police said. READ  

Greek PM vows to 'start working hard' after vote
Photo: DPA

Greek PM vows to 'start working hard' after vote

Greek Prime Minister Alexis Tsipras vowed Friday to "start working hard" to implement vital reforms in the stricken eurozone country, after Germany's parliament approved a four month extension to its bailout. READ  

Ukraine: troop deaths 'serious breach' of truce
Photo: DPA

Ukraine: troop deaths 'serious breach' of truce

Ukrainian President Petro Poroshenko declared the killing of three government troops by pro Moscow rebels a "serious breach of the ceasefire", during a telephone call Friday with German Chancellor Angela Merkel, her office said. READ  

Man wins court battle over loud footsteps
Trouble at the top. Photo: DPA

Man wins court battle over loud footsteps

Germany's highest civil court ruled in favour of a man who swapped the carpet in his new apartment for parquet flooring, incurring the wrath of the retired couple who lived below him over his loud footsteps. READ  

Teachers to strike nationwide from Monday
Photo: DPA

Teachers to strike nationwide from Monday

Teachers all over the country are expected to stike starting Monday, German education trade union GEW said, after negotiations with the wage commission of the federal states (TdL) failed to achieve results. READ  

EU court deals blow to US Iraq objector's hopes
Andre Shepherd at the European Court of Justice in June 2014. Photo: DPA

EU court deals blow to US Iraq objector's hopes

American soldier Andre Shepherd, who applied for asylum in Germany as a conscientious objector against the war in Iraq after going AWOL from his unit, saw a judgement by the Court of Justice of the European Union (CJEU) go against him on Thursday. READ  

RECEIVE OUR NEWSLETTER AND ALERTS
Features
Kafka: puzzling translators 100 years on
Business & Money
France or Germany: Which country really is the best country to work in?
Photo: Police
Rhineland
Student driver crashes tank into family garden.
Photo: DPA
Politics
There was a notable absence at the Anti-Semitism Commission
Sponsored Article
Tourist or lifer: what sort of expat are you?
National
How Dresden bombing still divides Germany, 70 years on
Sponsored Article
Are you an American expat? How to face FATCA
Photo: DPA
Gallery
Take a cute break with this gallery of baby animals
International
What's keeping UK expats from voting?
Photo: DPA
National
Terror alert at a new high. Should you be worried?
Gallery
The best regional foods TTIP opponents want to protect
Photo: DPA
Features
All you ever needed to know about Pegida
Photo: Shutterstock
Culture
This cosplayer did not think his plan through
National
Europe in statistics - from Spain to Sweden
Gallery
Top 12 German idioms
Culture
10 top tips for partying in Germany
Photo: DPA
Technology
What does the Chancellor see as the future of the internet?
Photo: DPA
Business & Money
JobTalk: All you need to know about working in Germany
National
Share news tips with The Local Germany
Latest news from The Local in Austria

More news from Austria at thelocal.at

Latest news from The Local in Switzerland

More news from Switzerland at thelocal.ch

Latest news from The Local in Denmark

More news from Denmark at thelocal.dk

Latest news from The Local in Spain

More news from Spain at thelocal.es

Latest news from The Local in France

More news from France at thelocal.fr

Latest news from The Local in Italy

More news from Italy at thelocal.it

Latest news from The Local in Norway

More news from Norway at thelocal.no

Latest news from The Local in Sweden

More news from Sweden at thelocal.se

3,199
jobs available
Toytown Germany
Germany's English-speaking crowd