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French Airbus Workers on Strike Over Job Cut Plans

By Reuters
Tuesday, 6 Mar 2007 | 6:04 AM ET

Thousands of Airbus workers went on strike at French factories of the European planemaker on Tuesday, protesting against a restructuring plan that has dominated France's presidential election campaign.

More than a hundred buses brought staff from factories in southern Toulouse to a rally in the city centre to denounce plans by Airbus to cut 10,000 jobs across Europe, including 4,300 in France.

In the northern town of Meaulte, some 1,500 workers marched through the rain to protest against the restructuring aimed at cutting costs after delays to its A380 superjumbo project.

"It's not right that one of the jewels of European technology is cutting 10,000 jobs over four years, while its order book is full for several years," Bernard Thibault, the head of the CGT union, told Les Echos daily.

Tuesday's strike was due to last a day but unions threaten wider action if Airbus carries out forced redundancies, something it has promised not to do unless things get worse in 12-18 months.

In Germany, workers who staged walkouts last week resumed normal operations on Monday. They have agreed not to strike under a longstanding pay deal with Airbus management.

With an Airbus plane rolling off assembly lines on average every 9 working hours, production would be badly hit in both countries if French workers held a prolonged strike, since French factories produce many parts needed for the whole group.

Airbus has shot to the top of the political agenda in France, with Socialist presidential candidate Segolene Royal and her centre-right rival Nicolas Sarkozy both demanding action to help Airbus parent EADS, although by different means.

Finance Minister Thierry Breton said on Tuesday the French state was ready to raise its stake in EADS if needed and reaffirmed it would follow any capital increase at the company badly hit by delays to the new Airbus A380 superjumbo airliner.

"The state will follow the capital increases if these are proposed," Breton said in an interview with France Inter radio.

Sarkozy has also proposed pumping state money into Airbus to fund future development while Royal wants a group of French regions to buy shares in EADS, mirroring the involvement of German federal states which have bought symbolic stakes.

She has also said she would try to freeze the restructuring programme if she won power in the April and May election.

Royal was due to meet German Chancellor Angela Merkel in Berlin on Tuesday to talk about the troubled firm, but Breton denounced her ideas as unworkable.

"Her proposal ... is populist and useless," he said in an interview with Metro newspaper, saying French regions did not have the financial clout of their German counterparts.

STATE ROLE

Breton said when EADS private shareholders Lagardere and DaimlerChrysler began discussions on reducing their holdings in 2005, he had told them "in the name of the government that not only would it not sell its shares but that it was ready to raise

its stake and follow any capital increase if that were necessary."

His remarks on a capital increase mirrored comments by Prime Minister Dominique de Villepin who has said "the state will play its role," evoking the same forceful stance on industry which gave birth to his earlier policy of "economic patriotism."

Germany, in particular DaimlerChrysler, is suspicious of French state interference and insisted on reducing public influence in the company's founding shareholder pact in 2000.

The French decry political maneuverings in Germany too and resent Berlin's decision to bring in a state bank and regions to bolster its presence while dismissing French interventionism.

The political fighting over how to help Airbus workers dominated French newspaper headlines on Tuesday.

"(Centrist Francois) Bayrou and Sarkozy have had to change position and ended up praising public authorities, following the example of the Socialists," left-leaning Liberation daily said.

"Today, they are also pleading for the state to bring in capital again, to redefine the shareholder pact and the governance of the company," it said in an editorial.

The French government has expressed irritation that its hands are effectively tied by the shareholder pact designed by its Socialist predecessors when EADS was founded in 2000. But it risks opening EADS up to foreign predators if it weakens the takeover defences enshrined in the same pact.

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