Airbus shares ended in the red Wednesday and could suffer a little Thursday, as the European plane maker confirmed that 3,700 jobs, across the four countries it has employees, are under threat due to planned lower production rates of its A380 and A400M models.
Airbus shares closed 0.42% lower at €95.72, Wednesday. However, the stock remains higher than the level it’s been at for much of 2018 to-date.
Lower production levels
At a meeting with the European Workers Council Wednesday, Airbus discussed the situation and its plans. The Airbus statement following the meeting, shows the manufacturer will further reduce output of two of its aeroplane models.
From 2020, the plane maker will produce six A380s per year. Meanwhile, production levels of the A400M will fall from 15 this year, to 11 in 2019 and then to eight in 2020.
“At this stage, Airbus estimates the maximum impact of these measures will affect up to 3,700 positions at sites across the Company’s home countries of France, Germany, the United Kingdom and Spain,” Airbus said.
Despite those reductions, Airbus said it should be in a position to redeploy most of its workers onto other projects that are moving ahead and gaining traction.
“The Company is confident that it will be able to propose opportunities to most of the affected employees through programmes which are ramping up,” the statement added.
Airbus aircraft order visibility
The European manufacturer said the ability to begin making future employee-related plans was due to a recent order giving the company better visibility for its A380 programme.
“Airbus can produce the A380 in an industrial efficient way over the coming years. This baseline allows Airbus to pursue further sales campaigns which may lead to higher production levels,” It said.
In addition, while jobs are under threat, the plane maker also said that it already manages a 12% mobility rate of its staff. And it’s likely that it will be able to absorb at least some required job losses through natural movement of its employees over the coming years.