Airbus to spin off three German factories

After failing to find a buyer, Airbus has decided to spin off three Germany facilities into a new company, called Premium Aerotech. Airbus also has announced delay of the first flight of the A400M.

The Bloomberg new service reported on Nov. 28 that Airbus SAS (Toulouse, France) has reached agreement with its unions on the spinoff of three German plants into a new company called Premium Aerotech; Airbus will invest €500 million ($641 million) in the sites, located in Nordenham, Varel and Augsburg.

According to the report, Premium Aerotech will be established on Jan. 1, 2009, and has been given contracts to work on Airbus’s new composites-intensive A350 XWB widebody plane. Under the labor agreement, according to an e-mail statement from the IG Metall union, about 6,000 workers will transfer to the new company, with a guarantee that no jobs will be cut until 2014 at the earliest. No more than a minority stake in the business can be sold until 2012, the union said. Airbus and its parent, European Aeronautic, Defence & Space Co. (EADS), had been looking for a buyer of the facilities after the only prospective Germany buyer, OHB Technology AG, dropped out. The spinoff is part of Airbus' Power8 program, designed to cut production costs and develop risk-sharing partnerships with other firms.

Original Bloomberg report:

In other Airbus news, Bloomberg reported on Nov. 24 that ongoing engine problems are likely to push first flight of the composites-intensive A400M military-transport plane into the second half of 2009. The first flight has been delayed by problems with the Fadec engine-control system, for which Airbus is awaiting a new plan from engine manufacturers, Tom Williams, head of aircraft programs, told Bloomberg.

Williams said that Airbus and EADS are asking the seven countries that placed the original €20 billion ($25.6 billion) order for 192 of the planes to reach a new accord that will have governments shoulder more risk, Williams said today. “We are saying to the governments that we need a new contract, though until we get a new plan from the engine group it’s going to be difficult to get a new plan for the overall program,” he said.

The A400M, delayed four times and originally due to fly early this year, will be powered by engines from Rolls-Royce Group Plc, Safran SA, and MTU Aero Engines Holding AG, which is making the Fadec (fully authorized digital engine control), a mechanism that helps manage performance and fuel use.

Original Bloomberg report: