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EADS to scale back defense, space subsidiaries

Iran Press TV

Sun Dec 8, 2013 6:13PM GMT

The European Aeronautic Defense and Space Company (EADS) is slated to announce a major restructuring plan to unions that would see thousands of jobs to go, and sour relations with shareholders Germany and France.

The company announced that it will publicize the grandiose plan on Monday, and the measure will hit its defense and space subsidiaries, which are suffering a drop in orders and require urgent attention.

The restructuring is the pet project of the EADS chief executive Tom Enders, who says the move is seen as unavoidable after Germany torpedoed his plan last year to merge with British defence, security and aerospace company BAE Systems.

"If defense orders are cancelled or reduced as has happened in Germany in recent years, an impact on production and employment cannot be avoided," Enders recently commented.

He further noted that EADS has lost orders worth several billion euros in Germany, which the company had thought were certain.

EADS has said in recent weeks that the number of job cuts have not been determined yet, but the German-language newspaper Suedeutsche Zeitung disclosed last week that a defense factory of the Cassidian unit -- the second largest division of the EADS group -- was set to be shuttered.

Unions are already gearing up for a fight, fearing Enders may cut as many as 9,000 of the defense unit's 45,000 jobs.

In late November, more than 20,000 EADS workers took to the streets in German cities from Manching to Hamburg and Bremen, to protest at the coming lay-offs and plant closures.

EADS has gone through years of restructuring and job cuts. It introduced a radical restructuring in 2007 in a plan that originally called for 10,000 job cuts, but in the end 7,900 people had to leave.

The group's profit margins largely lag behind those of its competitors. Margins at its Eurocopter helicopter division are 5 percent, half those at its closest competitor AgustaWestland.

MP/PR