Spain Agrees to Buy 7 Airbus Aircraft and 40 Helos in Exchange for Fewer Job Losses

Spain Agrees Investment Plan with Airbus In Exchange for Fewer Job Losses (excerpt)

After meeting with Airbus CEO Guillaume Faury (L), Spanish Prime Minister Pedro Sanchez (R) has agreed to buy three MRTT tankers, four C295 aircraft, at least 36 H135 and four H160 helicopters in exchange for fewer job cuts at Airbus Spain. (SP govt photo)

MADRID --- Spain’s government and Airbus said on Thursday they had agreed measures aimed at propping up the aerospace sector and minimising job losses after a meeting between Prime Minister Pedro Sanchez and Airbus Chief Executive Guillaume Faury.

“Both parties consider it essential to promote a series of initiatives to strengthen the whole sector in Spain and its auxiliary industries,” Airbus and the government said in a joint statement.

Battered by the fallout from the COVID-19 pandemic, Airbus, which is 4% owned by the Spanish government, has said it will lay off about 900 workers in Spain as part 15,000 cuts worldwide, prompting large protests outside its factories.

Included in the measures are a 185 million euro ($219 million) investment plan to be financed by the European Union recovery fund and a commitment from Spain to order several military aircraft. (end of excerpt)

Click here for the full story, on the Reuters website.

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MADRID --- The President of the Government, Pedro Sánchez, welcomed the CEO of Airbus, Guillaume Faury, to La Moncloa, with whom he held a working meeting in which they analyzed the unprecedented impact that the COVID-19 pandemic has caused in the industry aerospace and on airlines, as well as related mitigation measures.

The aerospace sector is strategic for Spain, which, as a founding nation of the Airbus consortium, reaffirms its founding objectives, in particular the generation of industrial fabric and quality employment, as well as the preservation of technological capabilities, especially those of designing, certifying, producing and supporting a complete aircraft.

Both parties have agreed to launch a series of initiatives to strengthen the sector and its auxiliary industries, and are firmly convinced that the measures proposed will help to face the current crisis and minimize its impact on employment, while helping to preserve the technological and industrial skills of Spain.

Airbus is committed to finding formulas and solutions for plants with less workload, taking into account their location, in the area of negotiation with the social partners. The meeting concluded with a joint statement.

The meeting was also attended by the Minister of Defense, Margarita Robles; the Minister of Industry, Commerce and Tourism, Reyes Maroto, and the Minister of Science and Innovation, Pedro Duque.

Click here for the joint communiqué (4 PDF pages, in Spanish) on the Spanish Government website.

Selected excerpts are translated below.

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(…/…) The Spanish Government undertakes to promote the following initiatives:

-- An Aeronautical Technology Plan (PTA), linked to the Recovery Funds of the European Union), which will be managed by the Spanish Innovation Agency (CDTI) endowed with the following budget allocation: 2020: 25 M€; 2021: 40M€; 2022: 80M€; 2023: 40M€.

These amounts together with other measures and partially grants Refundable (APRs), whose available volume can exceed € 50 M annual, allow financing the maintenance and reinforcement of current capabilities of the aeronautical and defense sector in Spain and preparing the next generation of sustainable energy technologies and zero emissions. Altogether, it is estimated that these grants will mobilize projects for an amount greater than 150 M € per year.

Launch of new initiatives in defense programs summarized as follows:

-- Transformation of three A330 aircraft into MRTT (Multi Role Tanker Transport).

-- Acquisition of four C295 aircraft for Maritime Patrol.

-- Launch of a joint program between the Ministry of Defense and the Ministry of the Interior for the acquisition of 36 H135 helicopters in a first phase of six years, expandable to 59 in a second phase. And a program from the Ministry of the Interior to acquire four H160 in the next six years.

-- Start of Phase II of development of the NGWS / FCAS program (Future Combat Air System) and continuing its development in the coming years.

-- Facilitate the financing of the current NH90 helicopter contract and anticipate payments associated with Spanish participation in the A400M program. All of it in support of the balance of the company's cash flow.

-- Analyze the possibility of launching a concept and feasibility study for the development of an advanced trainer aircraft, as a strategic program open to other allied countries, France and Germany, to strengthen capacities of the Spanish industry to design, certify, produce and maintain a complete, future-oriented coach for the NGWS.

-- Spain, in order to increase the capabilities of Defense Europe and promote a Technological and Industrial Defense Base in Europe, recognizes the importance of successfully completing the international programs Tigre MK-III and E-MALE (EURODRONE).

Support Airbus in the negotiations that the European Commission maintains with United States, in the framework of the cross disputes in the WTO on trade of large civil aircraft, to allow the removal of US tariffs and agree disciplines for future aid to the sector so as to avoid new conflicts between the EU and the US. Both parties welcome the recent agreement to change the terms of launch aid granted to Airbus for the production of the A350, which means compliance full of WTO rules and panel requirements in the Airbus case.

-- Reinforce export financing mechanisms with official support, by financing through the Fund for the Internationalization of the Company (FIEM) of the export of components and through the coverage of CESCE on behalf of the State. CESCE will continue to support Airbus operations abroad and the consolidation of its international portfolio.

-- Promote aid to development projects of companies in the chain of provision under the Reindus - financial support program Competitiveness, for industrial investment projects in the field of digitization and ecological transition.

-- Give continuity, by the Ministry of Industry, Commerce and Tourism, to support program for process innovation in the aeronautical sector for the 2020-2025 period with a minimum annual allocation of € 15 million.

-- Explore different formulas to strengthen the Spanish TIER 1 of Airbus, including financial support measures with the aim of maintaining its capacities and support their participation in innovation programs.

-- Establish a Supply Chain Support Fund with a minimum € 100 million that allows its development and consolidation, with the cooperation of Airbus and the support of TEDAE.

-- Expand the participation of Airbus Spain in space programs such as consequence of the increase in more than 25% of the investment of the Spanish Administration in ESA programs in accordance with the commitments made at the last Ministerial Conference of said organization.

-- Support of the administration to the Spanish airlines that have suffered the impact of the COVID 19 crisis to keep your orders and facilitate renewal of the fleet with more eco-efficient aircraft.

-- Study and adopt temporary measures in the workplace to mitigate the impact of the crisis on the sector, preserving knowledge and skills.

For its part, Airbus is committed to promoting the following initiatives:

-- Minimize the impact on jobs in Spain and look for formulas and solutions for plants with less workload, taking into account their location. All this in the field of negotiation with the social partners.

-- Creation of a dialogue and information mechanism with the Government of Spain similar to that of other founding countries. Based on this mechanism, at least one once a year, members of the Airbus executive committee will meet with members of the Government of Spain to deal with issues of common interest. The government of Spain will decide the contact point and a monitoring group

-- Adopt a security and defense agreement that safeguards the interests essentials of the Spanish State committing in the custody of the assets Spaniards in an Airbus subsidiary in Spain.

-- Airbus in Spain maintains responsibility for the rear fuselage and the Pledge (RFE) of current and future Airbus commercial products. Likewise, Airbus also recognizes its relevant position in composite technologies, making it responsible for the development, industrialization and production launch of large complex composite structures in pre-impregnated outside the RFE. This affects future Airbus developments in the areas indicated.

-- In the Space area, actions will be taken to obtain a greater participation of Spanish subsidiaries in the group's commercial market (Earth observation or telecommunications), as well as the designation of Spain as a priority channel for the group's commercial actions with Latin America in space.

-- At Airbus Helicopters Spain:
* Implementation of the Industrial Logistics HUB in Albacete vital for development of the Aeronautical and Logistics Estate and with great capacity to generate jobs.

* Direct participation of engineering in the development of the police version of the H160 model for the Civil Guard and the National Police.

* Progressive transfer of the design authority of the rear fuselages of all helicopters (SDR).

Finally, both parties are firmly convinced that the set of Previous measures will contribute to face the COVID-19 crisis and minimize its impact on employment in the sector, while helping to preserve skills technological and industrial of Spain.

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