Airbus: Crisis in the aerospace sector could result in ‘economic devastation’ locally warns Economy Minister

The crisis the aerospace sector could result in economic devastation in Flintshire, Economy Minister Ken Skates has warned.

Airbus announced on Tuesday that it is looking to cut 15,000 of its global workforce, the largest downsizing in its history.

The company said it wants to reduce the UK workforce by 1,700.

Airbus employs 6000 people at Broughton where the bulk of the cuts are expected to come from.

A further 4500 people are employed at Filton in Bristol.

Unite has broken the numbers down further, the union says 1,116 manufacturing jobs and 611 office-based Airbus jobs in the UK will be lost.

The plane maker has pointed to the dramatic impact of the Covid 19 pandemic on its commercial airline business.

Worldwide domestic flights have dropped by 70 percent and the loss of passenger revenue is reaching £253 billion.

Europe’s largest airports have managed 90 percent fewer flights and the recession combined with a perceived COVID-19 infection risk when travelling, is damaging passenger confidence.

Airbus does not expect air traffic to reach pre-crisis levels for 3 years at best, possibly 5 years assuming there is no second-wave crisis.

In a written statement, Minister for Economy, Transport and North Wales, Ken Skates said the company is fighting for survival and compulsory redundancies cannot be ruled out.

He also said up to 150 Airbus suppliers will be hit by Tuesday’s announcement, one a positive note, the much sought after Airbus UK apprenticeship scheme “will continue as planned.”    

In his statement, Mr Skates said: “Airbus is now fighting for survival and has announced plans to adapt its global workforce and resize its commercial aircraft activity in response to the COVID-19 crisis.

I cannot stress enough the existential crisis the sector is facing – one which could result in economic devastation in those constituencies surrounding the Broughton and Deeside facilities and the neighbouring areas of North West England.

I would also wish you to be aware that we have identified 150 suppliers employing circa 1500 staff who will almost certainly be affected by today’s [Tuesday’s] announcement. 

The Broughton site has already put some 500 Guidant agency staff under notice of redundancy and furloughed some 3,200 core staff.”

“Airbus have made extensive use of the Job Retention Scheme with about 40% of its UK employees in the Commercial Aircraft division also on furlough.

I was informed today [Tuesday] that the information and consultation process with social partners has already begun with a view to reaching agreements for implementation starting in autumn 2020. ”

Mr Skates said that while compulsory redundancies “cannot be ruled out at this stage” Airbus will work with unions on voluntary departures, early retirement, and “long term partial unemployment schemes where appropriate.”

The plane makers much sought after apprenticeship scheme – which is supported by Welsh Government – “will continue as planned” however start dates have been staggered to reduce class sizes.

“Graduates on scheme are secure for the term of the scheme.” Mr Skates statement says. 

Mr Skates said he has spoken to UK Ministers stating that “all governments must work together” on support for Airbus and the wider sector including a supply chain fund, flexible hours  such as a shorter working week, and an aircraft scrappage scheme to retire older, less environmentally friendly aircraft have been discussed. 

The Economy Minister said he fears it may be too late the “prevent irreparable damage” to the aerospace sector, he said

“I am concerned that, whilst other central European governments have moved rapidly to protect the future of strategically important industries such as aerospace, the UK Government may already be too late to prevent irreparable damage as companies announce cuts – the severity of which threaten the future viability of operations in the UK and the certainty of work being lost to other countries.”

Mr Skates said, “it is clear that we need to take immediate action to safeguard the position and wellbeing of the airbus workforce and supply chain. We also need to focus on doing everything in our power to secure a sustainable future for the aerospace and high value manufacturing sectors.”

The Minister has asked senior officials to “convene, as a matter of urgency” a multi -agency north Wales/Mersey Dee area rapid response group.

“This group will work with Airbus, the supply chain, trade unions, and all key agencies to ensure the rapid and effective deployment of all support required to individuals and the supply chain.” Said Mr Skates.

“Work has already started to understand the specific needs of companies within the aerospace supply chain.”

“In the longer term, I will be convening, within the next 3 weeks, a high-level summit to discuss the future of aerospace, automotive and wider high value manufacturing sector in the context of Brexit and net zero carbon.” Said Mr Skates

“The summit must be focused on the future shape of these sectors, must be cognizant of wider developments such as in the low carbon energy and construction spheres and must be a vehicle for defining a clear roadmap of collective actions and interventions to get there.  That is why I will be pressing UK Government to be a part of this summit.” Added the Minister.