06.07.20

Expert opinion: Airbus to restructure its UK operations

Categories: Salford Business School

Logistics expert Dr Jonathan Owens, of the University of Salford Business School, comments as Airbus announces job cuts.

Dr Owens said: “It is no surprise Airbus has made an announcement to make changes to its European operations because of the pandemic, with Rolls Royce having recently announced similar cuts in the UK.  This is on the back of losses in the airline industry itself.  Due to the global pandemic the airline travel business has had the emergency braked applied and profits have dropped by almost 45% in three months.

“Airbus currently employs just over 8,200 in the UK and it will expect to lose 1,700 of those by summer 2021.  The Broughton factory will bear the main losses with just over 1,400 expected to go across back office and production. 

“The aviation industry has an established supply chain, and the repercussions will mean smaller industries struggling to cope where Airbus is their main customer.  For the supply chain this is going to be a long haul to recovery as we will not see the airline industry getting back to where they were until at the middle of this decade. 

Covid-19 has been cited as the beginning of the end for global supply chains, however this is not the case for every business.  Having local, regional, and national supply chains are always sustainable on a standalone basis, and that could be the case for this industry.  Having one finished product such as manufactured wings, needs items sourced from several different regions and countries.  Therefore, unless there is capacity within the domestic supply chain, and this is often a long-term strategy, countries will remain connected find it difficult to go it alone, certainly in the short term.”

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