Via Yahoo Finance

Airbus is to furlough more than 3,000 staff working at its site in north Wales, the company has said.

The announcement came after the plane maker’s chief executive, Guillaume Faury, warned the company was “bleeding cash at an unprecedented speed”.

Airbus said about half of the staff at its Broughton site would be placed on the UK government’s job retention scheme, which pays 80% of wages up to £2,500 a month. It is understood the company will top up salaries by a further 5% to 10%.

The coronavirus pandemic has led to airlines grounding the majority of their fleet and, earlier this month, Airbus announced a plan to cut its aircraft production rates by around a third.

An Airbus spokesman said the company had “agreed with its social partners to apply the government’s job retention scheme for approximately 3,200 production and production-support employees at its commercial aircraft site in Broughton”.

Airbus employs 13,500 people in the UK, at Broughton and at Filton in Bristol, and 135,000 people worldwide.

The aerospace manufacturer has already taken advantage of government schemes including a furlough programme in France to help pay nearly 3,000 local workers during the lockdown. It has also convinced banks to increase its line of credit, giving the airline “time to adapt and resize”.

Faury told staff in a letter that the plane maker was “bleeding cash at an unprecedented speed”, and had lost about a third of its business after scaling back production in response to the pandemic.

He wrote: “Yes, one third. And, frankly, that’s not even the worst-case scenario we could face. That may sound tough, but I want to be honest with you: there are still many unknowns.”

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Airbus, which is one of the largest plane suppliers to commercial airlines, is considering other financial assistance including government-backed loans, according to Reuters. However, Faury warned that further measures and deeper cuts may be needed in a bleak message that signalled major job cuts.

He said: “We may now need to plan for more far-reaching measures. That’s because of the sheer magnitude of this crisis and its likely duration. Remember: we’ve lost a third of our business almost overnight and we need to cut costs throughout the company.

“We’re living through one of the largest economic shocks in history, so must consider all options. I am being straight and transparent with you, because I want to prepare you for the reality of our new operating environment. The survival of Airbus is in question if we don’t act now.”

The warning came weeks after the group announced it would slash the number of planes it produces by a third, due to travel restrictions that have wreaked havoc on global airlines and drastically reduced demand for new aircraft.

The company usually produces more than 60 of its most popular Airbus A320 model each month but is cutting that to 40. It will also reduce production of its A330 planes to two and A350s to six.

Airbus could end up revealing fresh job cuts as early as Wednesday, when it is due to release its first-quarter earnings.

A spokesman for Airbus said the company would not comment on internal communications.

Rhys McCarthy, national officer for aerospace at Unite, the union, said the message from the Airbus chief executive should serve as a “wake-up call” to the UK government and governments throughout Europe that they must provide state support to protect highly skilled jobs.

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McCarthy added: “Government support will not just protect the workers directly employed in the aerospace industry but also the 100,000 plus workers in the UK who are employed in the industry’s supply chain.

“A do nothing approach will not only threaten tens of thousands of jobs, but make an economic recovery that more difficult and will result in UK forfeiting its leading role in aerospace.”