EADS confirms 5,800 job cuts across Europe

An Airbus A380 EADS is changing its name to Airbus, the civil planemaking division

Aerospace and defence giant EADS says it will cut 5,800 jobs as a fall in governments' military spending begins to bite.

The company, which owns Airbus, plans to reorganise its European defence and space businesses.

It says there will be a "substantial consolidation" of sites in Germany, France, Spain and the UK.

In the UK operations will be focused on three sites - Stevenage, Portsmouth and Newport at the cost of around 450 jobs.

It is understood that the programme will be put in place over three years and that the company aims to make most of the cuts through voluntary measures.

Analysis

The basic problem is not a lack of profitability - EADS is not making a loss.

It's simply that the amount of profit it's making in various bits of the defence business doesn't come anywhere near the kind of profit made at US rivals like Lockheed Martin or Boeing.

Also one thing that may be worrying the company is that they don't seem to have any big projects on the horizon - there are no projects for a new fighter planes for example.

Tom Enders, chief executive of EADS, said in a statement: "We need to improve our competitiveness in defence and space - and we need to do it now.

"With our traditional markets down, we urgently need to improve access to international customers, to growth markets."

Closures?

Last year, EADS tried to negotiate a tie-up with UK defence company BAE Systems, but the deal stumbled amid strong political opposition.

EADS warned then that it would have to restructure in the face of defence budget cuts in its main markets.

It is understood that the UK operations, which employ more than 17,000 people, will be affected as part of the consolidation of the Astrium, Cassidian and Airbus Military divisions in a new unit, to be called Airbus Defence and Space.

EADS is the biggest shareholder in the Eurofighter

Cassidian is the biggest shareholder in the Eurofighter and builds the fuselage and important parts of the combat jet's electronics.

EADS' Paris headquarters will also be closed. The company had already announced that it is changing its name to Airbus, the Toulouse-based commercial aircraft arm that contributes the bulk of group revenues.

More on This Story

The BBC is not responsible for the content of external Internet sites

More Business stories

RSS

BBC Business Live

  1.  
    MARKETS UPDATE 08:59:

    Despite the heavy falls for supermarket shares, broadly speaking the market is positive and the FTSE 100 is up 22 at 6827. Frankfurt's Dax is up 50 at 9510 and Paris's Cac 40 is 26 higher at 4392. If you're planning a bit of a trip the pound is looking pretty good. Its at 1 euro 2603 and $1.6603. Bulk money market rates being quoted here of course - your tourist cash is generally lower.

     
  2.  
    MALAYSIA AIRLINES 08:43:
    Malaysia Airlines plane

    The Malaysia Airlines plan in brief: 6,000 job cuts (a third of workforce); new chief executive; firm completely nationalised by state investment fund; long-haul routes slashed; return to profitability forecast by 2018.

     
  3.  
    SUPERMARKET SHARES 08:32:
    Tesco sign

    Tesco's profit warning and slashed dividend has knocked its rivals' shares for six. Sainsbury's is down 5%, Morrisons is down 4% and Marks and Spencer is down 3%. Waitrose is not listed, of course, being owned by the John Lewis Partnership. Asda is owned by US giant Wal-Mart, whose shares trade in US time.

     
  4.  
    TESCO PROFIT WARNING 08:20:

    The market doesn't like what it's seen in the Tesco statement. Shares are down 8%.

     
  5.  
    MALAYSIA AIRLINES 08:18:

    The job cuts - about 30% of the workforce - are part of a restructuring of the airline, which has seen a steep drop in passenger numbers following the two air disasters involving its planes.

     
  6.  
    MALAYSIA AIRLINES 08:15: Breaking News

    Malaysia Airlines says it will cut 6,000 staff. More details to follow.

     
  7.  
    WATER BILLS 08:12:

    Just to make it clear, the OFWAT announcement covers the 18 regulated water and sewerage companies in England and Wales.

     
  8.  
    NATIONWIDE HOUSE PRICES 07:54:

    The Nationwide's chief economist, Robert Gardner, says the fact that the economy is picking up means the property market will probably continue to thrive. "Consumer sentiment remains buoyant thanks to declining inflation and sustained increases in employment. The first increase in interest rates still appears some way off - we expect the first increase in the first quarter of 2015."

     
  9.  
    TESCO PROFIT WARNING 07:42:

    Tesco invents some new business jargon. "The actions announced today regarding capital expenditure and, in particular, dividends have not been taken lightly. They are considered steps which enable us to retain a strong financial position and strategic optionality." Strategic optionality? Who writes that sort of thing?

     
  10.  
    WATER BILLS 07:36:
    Tap

    Average bills for water and sewerage customers may fall by around 5% in real terms between 2015 and 2020, says the water industry regulator OFWAT. It has published its draft proposals for the industry's prices. The regulated water companies put forward their price plans last December and OFWAT will deliver its final ruling this coming December.

     
  11.  
    CAT BAIT 07:30:
    Cat

    Russia's biggest lender, Sberbank, is looking to boost mortgage sales by offering a free cat to anyone willing to buy a property with money loaned from the bank.

     
  12.  
    NATIONWIDE HOUSE PRICES 07:27:

    The lender says the outlook for the housing market remains highly uncertain: "The number of mortgage approvals fell by almost 20% between January and May, suggesting that activity was cooling. However, there was a modest rebound in June and it is unclear how much of the slowdown was due to the introduction of Mortgage Market Review rather than an underlying loss of momentum."

     
  13.  
    TESCO PROFIT WARNING 07:16:

    Tesco is cutting its dividend payout to shareholders. It says it will set the interim dividend at 1.16p per share - a reduction of 75% from last year's interim dividend.

     
  14.  
    HEADLINES
     
  15.  
    TESCO PROFIT WARNING 07:12:

    Tesco's profits were previously expected to be £2.8bn for the year - now it says below £2.5bn.

     
  16.  
    NATIONWIDE HOUSE PRICES 07:11:
    Houses

    House prices are still going up says the Nationwide building society. In August they rose by another 0.8%, pushing the annual rate of inflation to 11%. It's the 16th monthly rise in a row.

     
  17.  
    TESCO PROFIT WARNING 07:10:

    "We now expect trading profit for 2014/15 to be in the range of £2.4bn to £2.5bn. Trading profit for the six months ending 23 August 2014 is expected to be in the region of £1.1bn."

     
  18.  
    TESCO PROFIT WARNING 07:08:

    Tesco has brought forward the start date for Philip Clarke's replacement David Lewis as boss. He now starts the job on Monday.

     
  19.  
    TESCO PROFIT WARNING 07:05: Breaking News

    Tesco says its profits will be lower than expected. Dividends to be cut.

     
  20.  
    VIRGIN AUSTRALIA 06:49:
    Virgin planes

    Virgin Australia overnight announced losses of A$355.6m (£200.5m) for the year - more than three times its loss last time. It blamed "weak consumer sentiment" and too many planes - like its rival Qantas which reported its results yesterday.

     
  21.  
    CO-OP VOTE 06:35: BBC Radio 4

    Big changes to the structure of the deeply troubled Co-op group will be put to a ballot of members tomorrow. Phil Dorrell, of consultants Retail Remedy, tells Today that even if the changes go through, a new leadership will have lot of work to do. "This will be a large step-change. My one concern would be that it probably shouldn't be the final change for the Co-op, they should consolidate, make sure they get their businesses back on track, and then have another look at it in a couple of years time."

     
  22.  
    EUROZONE ECONOMY 06:22: Radio 5 live

    Wake Up to Money ponders whither the eurozone? This week France had to re-appoint its cabinet because of its failing economy. Italy re-entered recession earlier this month and even German GDP was down slightly in the latest quarter. Kathleen Brooks, from Forex.com tells the programme: "Some economies are falling at a faster rate than others but what we've really seen is the core economies Germany and France lagging behind Spain."

     
  23.  
    HOUSE PRICES 06:14:
    For Sale signs

    The gap between house sellers' asking prices and actual selling prices is widening, says the property website Hometrack. It explains that the market is cooling down, at least in terms of prices. It says sellers in England and Wales typically got 96% of their asking price in August, falling back for the third month in a row. But it adds house prices only tend to start falling when the percentage of the asking price that sellers achieve falls below 94%.

     
  24.  
    GOOGLE DRONE 06:03:
    Google drone

    Overnight, Google said it was developing drones to act as flying delivery vehicles. The company calls it Project Wing. But it said it would take many years to create a service with lots of drones making lots of deliveries every day. More here.

     
  25.  
    06:00: Rebecca Marston Business reporter, BBC News

    All of that. Stay with us - we're here 'til 13:00.

     
  26.  
    06:00: Ian Pollock Business reporter, BBC News

    Good morning, we are here again, to keep you informed, educated and possibly entertained.

     

Features

From BBC Capital

Programmes

  • A map of social media interactionsClick Watch

    Twitter's map of the Middle East conflict – how the two sides react to each other on social media

BBC © 2014 The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.