Spain’s gamble on Airbus goes wrong

THE Spanish company and its 300 employees are caught up in the worst crisis the aviation industry has ever known in the course of almost a decade,

Airbus SE supplier UMI Aeronautica SL pivoted from military to commercial aircraft, making parts including door components for the A320 and A330, among the most popular jets in the sky.

Defence orders were languishing, while commercial aviation enjoyed a prolonged boom, so shifting more than two-thirds of output made sense.

Now the worst crisis the aviation industry has ever known, striking hardest where UMI built its expertise: passenger aircraft that are now sitting idle as the coronavirus grounds global fleets.

“About 35 per cent of our staff have been idled, as we had a corresponding drop in our workload,” said Co-Chief Executive Officer Antonio Ramirez in an interview. “But that’s only the beginning, because the situation is expected to get even worse.”

Airbus has furloughed more than 3,000 workers in Spain due to the impact of Covid-19, and the company’s chief Guillaume Faury is expected to make a decision on permanent job cuts by July. About fourth-fifths of the £2.5 billion (€2.8 billion) in revenue generated by the Andalucian suppliers come from the European plane maker, which employs 6,000 workers in the region and has seven factories in the country, including the final assembly line for the A400M military transport.

Ramirez said the A350 and the A330 wide-body models are the hardest-hit programmes, along with the Boeing 737 Max, a model that was already struggling before the pandemic because of two deadly crashes in rapid succession.

For the Andalucian suppliers, that has meant idling almost half of their 16,000 workers. They have so far sought to protect liquidity through state-backed credit lines and made use of the national temporary layoff programme, known as ERTE. Should the crisis persist, the workload of regional suppliers – mostly metallic parts makers and engineering firms – could drop as much as 50 per cent in coming years, Ramirez estimates.

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Written by

Mark T Connor

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