Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Airbus shakes up aero parts manufacturing

EconomyApr 21, 2021 04:55PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. FILE PHOTO: FILE PHOTO: The Airbus logo pictured at the company's headquarters in Blagnac near Toulouse

By Tim Hepher

PARIS (Reuters) -Airbus has launched the biggest shake-up of its manufacturing network in more than a decade, with large-parts activities reorganized in France and Germany and some small-parts production hived off ahead of a possible sale.

The European planemaker said on Wednesday it would combine aerostructure assembly in France under one entity, bringing major fuselage parts plants in St Nazaire and Nantes together with the worldwide operations of its Stelia subsidiary.

In Germany, its Premium Aerotec unit will be split, with part of it combined with manufacturing plants in Stade and some of the large Hamburg factory, and the rest folded into a new business specialising in small mass-produced "detail" parts.

"We are in the process of reviewing different ownership structures to identify the best possible solution," a spokesman said, referring to the new Germany-based detail-parts spin-off.

Those parts can range from small generic items like metal brackets costing a few dollars to complex machined items costing tens of thousands, such as those made in the highly automated Varel plant in Germany.

Also included in the new spin-off are part of the Augsburg plant in Germany and the Brasov facility in Romania.

The shake-up comes two months after Chief Executive Guillaume Faury declared aerostructures, which includes the manufacturing of fuselage parts, to be "core".

Once considered the less valuable end of the aerospace spectrum, aerostructures are considered vital to the aerodynamically complex, decarbonised designs of the future.

REVERSING POWER8

The rethink draws a line under efforts to sell the whole of Stelia and PremiumAerotec - both carved out in 2009 as part of a restructuring plan called Power8. Initial sale hopes were dashed by the financial crisis and few buyers have emerged since.

However, some industry sources noted Airbus had backed away from reviewing the Bremen plant in Germany, whose future has long been the subject of internal debate as it handles aircraft wing work overlapping with operations in Britain.

Stelia and PremiumAerotec have combined sales of 3.6 billion euros and 15,000 staff. Bringing them back under direct Airbus control could result in significant costs and investment, Jefferies (NYSE:JEF) analyst Sandy Morris wrote.

The new industrial blueprint, which coincides with a broader restructuring involving up to 15,000 core Airbus jobs triggered by the coronavirus pandemic, is subject to talks with unions.

It will go into effect at the start of next year and its implementation will be a priority for the company's new operations chief, Alberto Gutierrez, who moved up from running the military aircraft business in a reshuffle last week.

Discussions continue about manufacturing operations in Spain, which has been hard hit by the halt of production of the A380 superjumbo and a slump in demand for wide-body aircraft.

Airbus commercial jetmaking is spread out across a dozen or more plants in France, Germany, Britain and Spain, with final assembly outposts in China and the United States.

The company has traditionally been forced to accommodate political demands from its core European backers to protect manufacturing sites under deals dating back decades.

But the coronavirus crisis has forced it to cut costs while giving it the opportunity to reorganize at a time when output is 40% slower than usual due to the drop in air travel demand.

The shake-up appears to shy away from factory closures but leaves the door open to greater internal competition whenever Airbus launches future projects, industry sources said.

Airbus and U.S. rival Boeing (NYSE:BA) are increasingly locked in a battle over production strategy after a long sales boom.

Airbus shakes up aero parts manufacturing
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email