CASE STUDY: 4
Bitter it may taste, shrill it may sound, and sleepless nights it may cause, but it is true. In a major shake-up, Airbus, the European aircraft manufacturer, has thrown a big shock to its employees. Before coming to the details of the shock, let's take a look at the company's profile.
Company Profile
- **Name:** Airbus
- **Created:** 1970
- **President/CEO:** Vijay M.
- **Employees:** 57,000
- **Turnover:** €26 Billion
- **Total Aircraft Sold (Feb 2007):** 7,187
- **Delivered:** 4,598
- **Headquarters:** Paris, France
- **Facilities:** 16
- **Rival:** Boeing
Airbus announced on February 27, 2007, that it would shed 10,000 jobs across four European countries and sell six of its units. On the same day, the helpless workers did what was expected of them – they downed tools and staged protests. The protesting workers at Airbus's factory in Meaulte, northern France, were seen picketing outside the factory gate after holding up production a day earlier. To be fair to Airbus, its management entered talks with unions before the job loss and sale were formally announced. However, the talks did not mollify the agitated workers.
Job shedding and the sale of units are part of the Power and restructuring plan unleashed by Airbus to save itself from increasing loss of ground to its arch-rival, Boeing Co.
Airbus Power & Strategy
Airbus Power & Strategy was first mooted in October 2006 but sparked a split between France and Germany over the distribution of job losses and the placement of future ones. Later, the two countries agreed to share both job losses and new technology.
The power and plan, if finalized, would mean a 3 percent reduction in Airbus's 55,000 employee strength.
Discussion Questions
1. Why should Power focus on shedding jobs to save on costs?
2. Are there no alternative strategies?
3. Will the proposed shedding of jobs and sale of six units help Airbus survive the intense competition from Boeing?
4. Comment on the whole issue.
Please help me with this case. It's my MBA first semester question, and it's a 20-mark question.