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The Upper Austrian aircraft supplier is cutting its workforce by a fifth. The reason for this is lower demand due to the collapse of the entire aviation industry.
Ried im Innkreis. Major job cuts are now almost the order of the day due to the crown crisis. Now it is also affecting Upper Austrian aircraft supplier FACC.
Indeed, it is not just the airlines themselves that are suffering from the ongoing hiatus in global aviation, but their suppliers as well. The Innviertel-based aircraft manufacturer informed its workforce on Friday that 650 of the current 3,350 employees would be separated. Chief Executive Officer Robert Machtlinger justified the reduction with collapsing demand. “We are aware that this intervention is painful for all affected colleagues, but also for the company,” said Machtlinger.
According to the company, both production employees and employees at all Austrian plants are affected. Efforts in recent months to integrate outsourced products into in-house production have not changed the required downsizing, according to Machtlinger.
Since March 30, the entire workforce in Austria has been working short-time. This will end again for the whole group at the end of September. At a company meeting on Friday morning, the CEO presented a social plan for those affected together with the GPA-djp and GBH unions.
Sales collapsed
The staff cuts at the aircraft supplier are not a surprise given the current aviation crisis. Eighty percent of the world’s aircraft fleets were grounded for months, and there were almost no new orders for aircraft. This also affects Airbus and Boeing, two major FACC customers. As a consequence of the lower demand, sales fell 26 percent compared to the previous year and stood at 292 million euros after the first six months.
FACC AG, which just exited the leading ATX index in March this year, expects total sales of between € 500 million and € 520 million for fiscal 2020. Management assumes EBIT of around € 60 million. This also includes impairments and corrections of Covid-19 worth 37 million euros, as well as the costs of the reduction announced in the second half of 2020. For the following years, management assumes that fiscal year 2021 will be at the level of 2020. Only from 2022 do they expect renewed growth to be established. The group expects four to five years to pass before the pre-Covid-19 level is reached again.
Grants for land promises
In view of the staff cuts, the Upper Austrian provincial government spoke of a “severe blow” for employees and the Innviertel and assured affected FACC employees that they would be helped.
Governor Thomas Stelzer and Minister of Economic Affairs Markus Achleitner (both ÖVP) discussed a possible foundation model. Additional training programs are intended to help laid off FACC employees find new work. The two state politicians also see a great need for workers in Innviertel at the moment: there are currently around 3000 job openings in the region. Motorcycle manufacturer KTM announced Thursday that it was seeking 200 employees for its Mattighofen location.
