Future of European aircraft construction (debate)
The next item is the debate on statements by the Council and the Commission on the future of European aircraft construction.
Mr President, Mr Vice-President of the Commission, honourable Members, I am delighted to see that the subject of today's debate is the future of the European aerospace industry, for this industry embodies Europe's forward-looking approach, its high technology and its potential for future growth, and makes a considerable contribution to achieving the goals of the Lisbon Strategy for growth and employment, with Airbus being its most prominent project. Airbus is the name of a great idea - the idea of bringing together the technical capabilities of several European nations in order to build a strong aerospace enterprise that can hold its own on the global market. The story of Airbus is one of breathtaking success. Its aircraft - 4 600 of them have been delivered to date - represent European high technology on every airport in the world, thus playing a vital part in establishing an identity for Europe.
Airbus does, however, also have serious problems. The year 2006 was one of both success and crisis for it. In that year, Airbus could not only take pride in the success of being the number one on the global market, but the company also suffered a massive crash in earnings as a result of serious delays in the rolling out of the new jumbo jet, the A380, and problems resulting from the weakness of the dollar, since Airbus is built for euros and sold in dollars.
It will also be necessary to reduce the development gap between the A350 XWB and its American competitor. Aircraft building is, after all, on the threshold of a technological revolution, as we move from the age of metal into the age of plastics, and that has been recognised more readily on the other side of the Atlantic than it has on our own. It is that sort of aircraft for which market demand exists.
Airbus now wants to build up its strength; it has to become more competitive and to make itself ready to face the future, a future that can be guaranteed only by constantly renewed effort and the willingness and ability to innovate. Airbus is about to undergo a process of restructuring, and, however much that may be of interest to us in the political world, it is a matter for the company itself to deal with, and Airbus' management would be well advised to discuss the necessary measures in in-depth dialogue with its workforce, who, after all, are any business' most important capital asset. While it is, of course, certainly the case that recruiting strong industry partners who can contribute their own capital and know-how, sharing with Airbus both the opportunities and the risks, offers a chance of making jobs more secure, the decision as to whether or not to do that rests with the company itself and with nobody else.
What politicians are for is the creation of framework conditions; it is they who should ensure that there is a fair balance between the European nations involved as regards opportunities and liabilities, as regards jobs and technological capacities, and this fair distribution of opportunities and liabilities among the participating European nations appears to be working well.
Cooperation between several countries has also proven to be a successful way of drawing on the individual partners' technological know-how in developing and producing competitive products for the world market in the case of other European projects, for example Augusta Westland, Eurofighter and Eurocopter. European cooperation exists not only among the manufacturers of systems, but also among suppliers and manufacturers of jet engines, for example Thales, Diehl, Rolls Royce, MTU, Snecma, Alenia and others, to give but a few examples; all these companies, and those who work for them, are helping Europe's aerospace industry to cope well with ever-tougher international competition.
Perhaps, as I bring this speech to a close, I might also say something about climate change and compatibility with the environment, which, as I see it, have to do with our society's capacity for innovation, and Europe's aerospace industry faced up to the technological challenges associated with them as long ago as the year 2000, when, in 'Vision 2020', industry, scientists and policy-makers joined together in defining ambitious targets for a sustainable air transport system, with the intention of reducing, by the year 2020, both specific fuel consumption and carbon dioxide emissions by 50%, specific sulphur dioxide emission by 80%, and aircraft noise on take-off and landing by half.
These are ambitious objectives, and, if they are to be achieved in little more than a decade, all the interested parties will have to make a joint effort.
Mr President, Mr President-in-Office of the Council, honourable Members, Europe's continued industrial and technological performance in transport, communications, earth observation, security and defence is to a crucial degree attributable to its aerospace industry, for it is only that industry's global competitiveness that will enable Europe to achieve its economic and political goals.
The European aerospace industry is a world leader in several important market segments; it has in excess of a one-third share in the global market. In 2005 - the last year for which figures are available - it achieved a turnover of EUR 86 billion and gave work to 457 000 workers. The sector is continuing to grow despite recent difficulties, with a growing market for large civil aircraft in particular.
As Mr Hintze has just stressed, Airbus' ability to deliver 434 new aircraft last year constitutes a record. Orders have been placed with it for over 2 500 of them, giving it work for over five years. With projected growth of 5% per annum in the transport of persons by air, and of 6% per annum in the airfreight sector, the next twenty years will see a demand for over 22 500 new large airliners, amounting to a total value of EUR 2 billion at present-day prices.
It has to be said, though, that, over recent weeks and months, Airbus has been making the sort of headlines it would probably rather not make. We would all rather read about more great successes on its part on the market than about losses and layoffs, but the fact is that the European aerospace industry operates on a global market characterised by sharp competition and has to cope with well-prepared competitors - Boeing, for example - in all its segments, so the industry needs constant investment and innovation if its products are to meet its customers' requirements. Airbus is a major part of the European aerospace industry, a truly European enterprise with, at present 57 000 internal and 30 000 external workers, and drawing on many enterprises, both large and small, for the products and services that it uses.
Like any other enterprise, Airbus must adapt to changed conditions, adopting those procedures and structures that will enable it to produce the goods that the market demands as profitably as possible, and it does indeed make matters more difficult that Airbus has to sell its products in dollars, whilst bearing costs expressed in euros, the euro being the stronger of the two currencies. That makes it all the more important that Airbus should be able to take difficult business decisions rationally in order thereby to recover its position in the market.
It is an unfortunate fact that Airbus' decision to improve its efficiency by means of a programme of cutbacks and restructuring, including the farming-out of some of its activities, will result in a reduction in the number of staff employed, something that is causing insecurity and prompting calls for political intervention.
While politicians cannot and are not meant to interfere in decisions taken by businesses in an attempt to restore their own competitive edge - for companies' management decisions are not political matters - there are ways in which redundant workers can be helped, and, perhaps even a moral duty to help them, to get retrained and to find new work in other companies, possibly in other industries. For this purpose, for example, the Member States can get help from the European Social Fund.
The Commission notes with satisfaction that Airbus had already, some time prior to the restructuring currently in progress, involved workers' representatives in the decisions that had to be taken. It is most especially worthy of note that the European workers' representatives were fully consulted and that the effects of the restructuring on Airbus' subcontractors were also discussed.
Considering the expected growth, which is the envy of many other industries, it is also important that steps should be taken today to secure, to the benefit of us all, the long-term success of the European aerospace industry. That is one reason why the Commission is taking action, wherever possible - by, for example, setting up a European space programme or creating a European armaments market and a single European airspace - in order to create conditions that are favourable to free competition.
The EU is also, in its Seventh Framework Programme for Research, making considerable funds available for research and development in air transport and space research. All companies involved in such research work are being urged to submit proposals for shared-cost projects, which will be selected for funding on the basis of a competition.
I would like to highlight the outstanding significance of the 'Clean Sky' joint technology initiative in this respect, which will make it possible for the European aerospace industry to take up the challenge thrown down to it by the debate on climate change. I would like to take this opportunity to appeal, in forthright terms, to the European aircraft manufacturers and also to the airlines, who should be very concerned not to suffer the same damage to their image as that sustained by the European motor industry over recent weeks as a result of responding too late to the demands of our time. Modernity and innovation, research and development, are a matter of urgent necessity in this area, and, with 'Clean Sky', the European Union is offering an effective and strong platform for them.
on behalf of the PPE-DE Group. - (FR) Mr President, as Deputy Mayor of Toulouse, I can testify, having visited the company's sites on several occasions, that Airbus' restructuring plan is a test, a test for each of the employees concerned, and, in order to overcome it, the causes need to be correctly identified.
True, the euro appreciated and there were delays linked to manufacturing errors with the A380, but, above all, the group was governed in an intergovernmental, rather than industrial, fashion, and we must draw the right conclusions from this for the future.
We all know that what Airbus suffered from was not a shortage of public authority input in the business; rather, what Airbus suffered from was the interference of politicians who meddled in the running of the business, which ended up operating more like an international organisation than an integrated company. As far as its future is concerned, Airbus needs a new shareholder pact, which places greater emphasis on industrial shareholders. That means that the current shareholders must clearly declare their intentions. Do they want to carry on being shareholders, or do new financial and industrial partners need to be found?
When that was said, was the intention that public authorities should take no further interest in this matter? Of course not, and I am pleased that Europe has taken action. Indeed, Commissioner Barrot and yourself, Commissioner Verheugen, announced that the Union would be supporting Airbus' efforts by strengthening its research programmes.
However, I should like it, Commissioner, if you could clarify for us the possibility of having recourse to the European Globalisation Adjustment Fund and to the European Social Fund, for the benefit of the employees. For their part, the Member States can also come to the aid of Airbus, and especially of its sub-contractors, by granting aid for research and for the training of these employees.
On the other hand, imagine Airbus being rescued by equity investment in a few regions of France - I believe that 0.6% of the capital would be raised - that is downright unrealistic!
To conclude, I should not like anyone to lose sight of the fact that, even though Airbus is experiencing difficulties, this company has achieved many successes. I have confidence in its future, in the success of the A380 and of the A350. In times of crisis and difficulty, we must overcome national self-interests and show that we are solid and united - solid, because we are united.
on behalf of the PSE Group. - (DE) Mr President, ladies and gentlemen, this item was put on the agenda under the very neutral heading of 'future of European aircraft construction', but the main thing we are talking about today is the Airbus crisis.
The 'Power 8' reform programme devised by the management in order to plug the hole in the company's funds, envisages mass redundancies and the sale of plant. Airbus is a jewel in the European industrial landscape, with highly-skilled workers, full order books, plant working at full capacity and good products. The selling off of plant would appear to indicate the opposite; it is the wrong message to send when you are trying to plug a financial hole. As we see from the example of BenQ in Germany, selling off a factory generally indicates the slow but sure death of an industrial location and leads to the destruction of jobs and know-how.
I would ask you, Mr Hintze to speak up, as a representative of the Council and the German Federal Government's coordinator of aerospace policy, for the retention of the Airbus sites in Europe, and against the implementation of the 'Power 8' restructuring concept. It is not Airbus' workforce who should bear the brunt of the company's crisis and the misjudgments of its management and not Europe's position as an industrial location that should lose out as a result of them.
on behalf of the ALDE Group. - (FR) The A380 is expected to be a success, and evidence of that is the fact that the city of Los Angeles, in competition with New York, has just asked Airbus if it might be the first to welcome the European jumbo; yet the company is in crisis due to a lack of proper management, the well-known consequence of which is the 'Power 8' plan for economies and restructuring.
Airbus's managers have lessons to learn from the industrial mismanagement that caused delays in the delivery of aircraft. The Member States, for their part, need to give the European aerospace industry a secure future, while those of them that are shareholders need to do something about the company's management by reviewing the dual organisational model and renegotiating the shareholders' agreement. They must also act in solidarity by maintaining and developing the European aerospace industry, which means, among other things, making additional loans available for research, placing public orders, advancing funds for the investments needed in industrial sites or, indeed, increasing the States' shareholding - this being exactly what the American state did with Boeing.
What the industry now needs as a matter of urgency is the renegotiation of the 'Power 8' plan with the unions, taking on board their arguments about strategy. How, after all, can one accept the unbalanced way in which this plan proposes to share out work between the French and German sites? How is one to accept the idea that Toulouse, on whose two production lines twenty planes a month can be produced, should be limited to fourteen a month, with the construction of the other A320s being moved to Hamburg, necessitating investment in a new production line? How is one supposed to accept the effect on jobs at suppliers and sub-contractors, the effect on regional economies and the loss of know-how and expertise if sites' activities are moved elsewhere? How are people supposed to entrust innovation and development to others?
Airbus has orders for 2 589 aircraft on its books, so it has a full work programme for many years to come, and the quality of the aircraft it builds ought to see it through this crisis, but, in fact, there is only one thing to aim for: the promotion of Airbus as a European project creating jobs, achieving innovation and excellence in the eyes of the whole world and built by the men and women of Europe.
on behalf of the Verts/ALE Group. - (FR) Mr President, Airbus may be in crisis, but it is a crisis of which there has been prior warning. Living as I do cheek by jowl with Airbus in Toulouse, I have for years been sounding the alarm, but have done so in vain. For years, I have been issuing warnings about those holders of elected office who have forsaken their management role for the cult of the A380 and who are now among the choir of mourners bewailing the results of their own actions.
For years, I have been warning of managers who have lost touch with reality, such as Mr Forgeat, who, you will recall, walked away with suitcases full of millions of euros and who, for one, had no doubts about prices and deadlines. I would remind the Commissioner that I have for years been warning the Commission, suggesting alternative procedures such as transporting Airbus wings by airship, and at no time has any help been forthcoming from the Commission.
The crisis that we are now facing is industrial in character, but also, and above all, a disaster in human terms for Airbus's workers and for its sub-contractors. That Europe has an aeronautical vocation is not a matter of doubt; there is no question of the American military-industrial complex, acting through Boeing, being left in control of the skies.
There are five conditions under which recovery is possible. One is that the product be put back where it belongs and made subject to industrial logic and environmental law. Secondly, Airbus must be recapitalised using public funds. Thirdly, the way it works needs to be reorganised; it needs to extricate itself from the toils of joint Franco-German government, which - both in Airbus and in this House - prevent anything from moving. Fourthly, its industrial base needs to be rationalised by calling a halt to the dispersal of aircraft-building across dozens of sites. Fifthly and finally, the avionics sector being fragile and high-risk, it needs to diversify production, moving into the construction of other means of transport and other energy sources.
Airbus is rich - very rich - but only in the talents of its workers, so please let us not despoil that wealth.
on behalf of the GUE/NGL Group. - (FR) Mr President, Airbus was the cutting-edge industry that was meant to make us swallow the loss of our iron and steel industry and accept the loss of tens of thousands of jobs in textiles, and that same Airbus is now on the rack, preparing to sacrifice its workers and its sub-contractors - quite an achievement for a company whose order books are full for six years and which has EUR 4 billion in the bank.
Airbus would be able to face the future with confidence if it were not ravaged by the financial cancer that is free-market liberalism, and I can tell the House that jobs and development do not sit comfortably with a policy of keeping the euro strong nor, above all, with the greed for dividends characteristic of private shareholders who seek to cut back on investment in the necessary human and material resources and who put their trust in financiers rather than in the expertise of the workers.
The fact is that, by doing away with 10 000 jobs and dividing by six the number of sub-contractors, the 'Power 8' plan is eating away at those things that make Airbus rich: its workers' know-how and the network of sub-contracting businesses on whose cooperation it could rely. It was that cooperation that made Airbus a high-performing business, and that is the reality of what 'Power 8' is going to destroy by making workers, sites and nationalities compete against each other, something that the workers are quite right to repudiate. 'Power 8' fails to respond to the present and future needs of the business and should, for that reason, be withdrawn. If Airbus is to overcome its difficulties, a return to largely public ownership and funding is what is called for, for the fact is that only the Member States are capable of taking on aeronautical projects of this size.
Moreover, the Commission must resolutely defend before the WTO the system of repayable advances by which means alone it will be possible to fund the A350 and the NSR, and it must also make sure that the company gets low-interest loans from the EIB. If our aerospace industry is to have a future, a European fund for research, employment and training needs to be set up as a matter of urgency. Within the space of ten years, 30% of EADS' staff are going to be retiring; if their know-how is not to be lost, a massive plan for recruitment and training is called for. The aerospace industry will have immense challenges to cope with - ranging from the revolution in composite materials to the death of oil - and it is our duty to help it do that.
(The President cut off the speaker)
on behalf of the IND/DEM Group. - (FR) Mr President, this business with EADS is symptomatic of what we regard as the fraudulent nature of the idea of European integration.
It is astounding that some claim that the idea of a Europe founded upon cooperation - as proposed by the advocates of national sovereignty - has been a failure, and this at a time when, ever since Airbus was absorbed by EADS, we have seen the logic of cooperation, which had made the first Airbus models so successful, abandoned in favour of the integrationist approach, which, by way of privatisations, consolidations and eventual mergers, brought forth EADS, and one of the first consequences of that has been the jeopardising of the Airbus programme and, along with it, of the many jobs that it provided, particularly in France.
I might add that France obediently acquiesced in allowing its German partner a share in the expertise it had acquired over many years, indeed since the very dawn of aviation, and also in the many - public - investments it had made in the sector, thus making it possible for Europe to prevent aerospace being monopolised by the two imperial giants of the American Boeing and the Russian Tupolev.
It is also worthy of note that Germany did not share its pre-eminence in the field of machine tools, but this cooperation did nevertheless produce good results until the predominant ideology, which was one not so much of liberalism as of free trade, ended up privatising, in France and elsewhere, the great industrial flagships, particularly in aerospace, and the companies that benefited from this were English-speaking, based in the Netherlands and subject to Dutch law. Things promptly proceeded to go wrong, and I shall conclude by saying that I believe that if anything has been proved to be bankrupt it is the idea of integration as represented by EADS.
Mr Speaker, we are discussing two issues here tonight, and they should not be mixed together. One is the problem of unemployment, which should be dealt with by Member States with the necessary support from the Union and the different social funds - as was pointed out earlier by the Commissioner - but not by more political involvement in the European aircraft industry.
The other is the future of the European aircraft industry. If there is to be a future, that future must be based upon commercial decisions and the preconditions of the market, not on political discussions in parliaments or in governments. It is the involvement of too many governments, too many parliaments and too much politics that is creating problems and hindering the decision-making that would make the best of the opportunities open to the European aircraft industry.
The task of Airbus must be to produce and deliver the best aeroplanes in the world, not to deliver political promises from whatever country or from whatever government it is. I think there is only way to ensure that we can contribute to that. Of course, we shall have the best possible support for research and science, but we shall also ensure that we can have a functioning market - and a functioning transatlantic market because that is crucial. It is important to ensure that the responsibility of the aircraft industry and of Airbus, as we are discussing here, is kept within the company and in the management of the company, because otherwise all the decision-making will be split, complicated and bureaucratic and will lead to new failures. I think we should go for new success and give the company better opportunities by letting it be independent and not involved in political decision-making.
(DE) Mr President, full order books and its position as Boeing's competitor for the number one spot on the global market testify to the high level of skills of Airbus' employees and to their identification with their product. It is not the workers who are responsible for the mistakes that have been made; they have done a very good job, and are continuing to do so.
The European aerospace industry will not, in the future, be able to do without this know-how - derived from France, the United Kingdom, Spain and Germany - any more than it has been able to in the past. Developing and assembling the wings for high-tech aircraft - which is what Airbus does in Bremen, where I live - calls for special skills. You cannot simply speed ahead regardless in an aeroplane.
What we are dealing with here is grave failures of management. The failure of highly-paid managers to look far ahead cannot be a reason for sites to be played off against each other, which is what is happening now. Nor is it acceptable that Airbus should fail to give either its workers or the European Works Council plausible explanations of its decisions. To me, this makes it plain yet again just how urgent is the need for a revision of the directive on European Works Councils; it is overdue, to say the very least.
I will also say once more to Mr Hintze that it is not acceptable that development times for new air technology be cut arbitrarily, and those who rely on market considerations alone will pay a bitter price for it.
(DE) Mr President, ladies and gentlemen, how long are the Commission and the Council going to sit there in silent complicity while those who run major companies compensate for their own failings by getting rid of jobs? Both the French and German Governments were loath to do anything about it, and, even now, their protestations of opposition to the cuts in jobs are no more than half-hearted and, in the final analysis serve more as a means of striking poses than of finding solutions.
We therefore demand that 'Power 8', described as a renovation programme, be withdrawn. The Airbus workers in France and Germany must not be played off against one another. The aerospace industry is so important that not only must its funding be assured, but also the public control of it.
The EU needs to be determined in taking up the cudgels for Airbus. Low-interest loans secured through the EIB could be used to employ more workers, develop their skills and support research and development. In any case, we support the workers' and trade unions' European day of action to be held in various locations on 16 March and affirm our solidarity with them in their struggle.
(FR) Mr President, I would like to start by expressing my support for all those who work for Airbus or its sub-contractors and who have been told that they now face redundancy. They are now paying the price for the errors of management and administration and the errors committed by uninvolved shareholders who allowed financial considerations rather than the interests of the industry to carry the day, but the solidarity of workers across Europe will be their strength in getting the restructuring plan reviewed.
This business also shows just what is lacking in European social dialogue, with workers' representatives completely absent from the decision-making structures. While this state of affairs is not Europe's responsibility, Airbus' status as a flagship and a symbol of European and world industry does mean that a response is expected from Europe, which should say 'yes' to the injection of public capital into these businesses, 'yes' to repayable advances; 'yes' to loans for research and development; 'yes' to taking into account the difficulties presented by the EUR/USD exchange rate and 'yes' to reforms of business governance and of shareholders' agreements. For our tools of intervention, we must use the EIB and the Globalisation Adjustment Fund. At present, it is the skills of its workers that assure the company of a future, so let us do likewise through our support for them.
(Applause)
(ES) Mr President, I would like to express our profound concern about the current Airbus crisis and our solidarity with the workers affected, who deserve our full support.
I would also like to say that we are hopeful that the Power 8 restructuring programme can relaunch the company and restore the competitiveness of a European project that has represented the future of industrial innovation in the European Union.
We also recommend that we learn from the management mistakes, the unfair competition and the intergovernmental squabbles. We need the criteria of business and industrial efficiency and the most up-to-date innovations to take precedence over outdated political squabbles.
We also want to be able to tell the Airbus workers in all parts of Europe - also those in Puerto Real, Getafe and Illescas - that the European Parliament is committed to working together with the unions and with the management in order to provide all the assistance they need and encourage them to make it through each day.
We call upon the Commission and the Council to join forces to find a clear and sustainable solution for them.
Mr President, Mr Vice-President of the Commission, honourable Members, I have followed this debate with interest. Its subject is a serious one. The question is that of how we are to maintain, in Europe, a strong aerospace industry, and here the principle must apply that businesses do business and politicians make policy, and this distinction is an important one if we are to do justice to the matter in hand.
Various speakers have pointed out that, while Airbus is currently doing well, it does nonetheless have problems to cope with. That is indeed the case, but we must also look to the future. For a long time now, the United States have underestimated Europe's ability to build aircraft, and now, having thrown away their competitive advantage over a considerable period of time, they must regret having done so, while we, in Europe, must watch out in case the same thing happens to us as a consequence of our underestimating Asia. What that means is that, in times when the European aerospace industry still possesses some strengths - in innovation and finance - it must also develop in such a way that it remains competitive and can cope with future challenges as well as the current problems with the delays in delivering the A380, the delays in developing the A350, and the problems arising out of the weakness of the dollar.
It is for the company itself to decide what is right and what is not. I have to tell the honourable lady Member who spoke earlier that it would never enter my head to say that it was for politicians to prescribe the time required for the development of an aircraft. For them to do so would be absurd. That is a decision for the company to take; it is a technological issue and a business decision, but certainly not a political matter. Nor, indeed, would I ever tell a company what it should or should not put on the market, but it is clear that, if a company does not judge the market properly, if it does not review it constantly, it is going to end up in trouble.
Since many of you have had something to say about the workers, I would like to point out that the company told us that the slimming-down it intends to carry out will be carried out in a socially responsible manner, that there will be no immediate redundancies, and that the process will be ongoing over many years. Let me add that it is in Airbus' interest to conduct in-depth discussions of the necessary restructuring with its workers, who are highly skilled.
The company can win only if it understands the project as a joint one shared between management and workers, if it seeks this dialogue and continues with it.
Mr President, honourable Members, the Commission shares the concern expressed today that it cannot be good for the future of the European air and space industry if skills and experience are being lost as a result of the biggest company in this sector cutting back jobs. As we have already said, of course, the Commission will deploy the instruments available to it at European level in order to help the persons affected to cope with the consequences of restructuring.
Members of your House have been quite right to say, as they have done today, that this company's problems do not in fact have anything to do with the workers' skills; that much is not in any way a matter of doubt.
Over and above the steps we are able to take - and will take should it prove necessary to do so - we are currently engaged in taking very decisive action to create equal and fair competitive condition for the European air industry.
On 22 March, the Commission will be making, in writing, a complaint against the USA to the World Trade Organisation, which will serve as a protest against the American state's open-ended subsidy of Boeing, which amounts to numberless billions. That, too, is a major indication of our desire to secure the future of the European air and space industry.
The debate is closed.


Documents received: see Minutes


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