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EADS Chief Warns Jobs Cuts Coming In Defense Unit

Nov. 25, 2013 - 03:45AM   |  
Tom Enders, CEO of European aerospace giant EADS, said a reduction in defense orders will affect jobs in EADS's defense unit (Eric Piermont / Getty Images)
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FRANKFURT — A reduction in defense orders will have an impact on jobs in EADSís defense unit, the head of the European aerospace giant said in an interview published Monday.

Tom Enders told vbw-Unternehmenmagazin, the magazine of the Bavarian economic federation, that ďif defense orders are canceled or reduced as has happened in Germany in recent years, an impact on production and employment cannot be avoided.Ē

Endersís comments follow a report by the German news agency DPA last week that EADS is considering cutting the workforce by 20 percent, or 8,000 employees. The group will be renamed Airbus Defence and Space next year as it reorganizes.

EADS said no numbers have been decided, but Enders has previously said drastic measures were needed to secure the future of the division.

The restructuring is seen as unavoidable after the failed plan to merge with Britainís defense firm BAE Systems last year.

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

Enders said the outlook is not rosy for defense manufacturers due to the high value of the euro and the eurozone debt crisis pushing countries to cut back on acquisitions of new equipment.

Enders told the Bavarian magazine that EADS had lost over the past few years orders worth several billion euros just in Germany that the company had thought were certain.

He said EADS cannot absorb that without making changes at the affected sites. He did not go into details.

The German newspaper Suedeutsche Zeitung reported Monday that a defense factory of EADSís Cassidian unit located north of Munich would be closed with activities shifted to another facility in Bavaria, where EADS employs some 16,000 people.

An EADS spokesman declined to comment on the report, telling AFP that it would not make detailed announcements on its plans before informing its European works council, which meets in Munich on Dec. 9.

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