Pedro Sanchez's Government submits to Airbus

Significant economic aid, together with multi-million dollar purchases of airplanes and helicopters, are the main concessions made by the Spanish government to the European multinational
Guillaume Faury has been flying Airbus for a year and a half and has already managed to win over the Spanish government and receive important concessions in terms of aid and multi-million dollar purchases of planes and helicopters

PHOTO/REUTERS  -   Guillaume Faury has been flying Airbus for a year and a half and has already managed to win over the Spanish government and receive important concessions in terms of aid and multi-million dollar purchases of planes and helicopters

Spanish President Pedro Sanchez and his coalition government do not want something similar to, or even worse than, what happened to Nissan and Alcoa a few weeks ago with the powerful Airbus, the European Union's leading aerospace and defence industrial corporation. 

PHOTO/Pool Moncloa - El presidente del Gobierno, Pedro Sánchez, flanqueado por la ministra Reyes Maroto (Industria, Comercio y Turismo), Margarita Robles (Defensa) y Pedro Duque (Ciencia e Innovación) durante su reunión del 30 de julio con Guillaume Faury y su equipo
PHOTO/Pool Moncloa - The President of the Government, Pedro Sánchez, flanked by Minister Reyes Maroto (Industry, Trade and Tourism), Margarita Robles (Defence) and Pedro Duque (Science and Innovation) during their meeting on 30 July with Guillaume Faury and his team 

The executive has reacted to the announcement of the dismissal of more than 1,600 employees in Spain by the European multinational, in an attempt to preserve the strategic capabilities of the national industry, and has had no choice but to bend to the dictates of Airbus in order to reduce the impact of the decline in aerospace production which, in our country, affects a total workforce of more than 13,000 people in the company's nine Spanish locations. 

It is one of the few alternatives left to the ministerial team chaired by Pedro Sanchez to avoid social unrest in the Airbus factories in Madrid, Toledo, Albacete, Cadiz and Seville, as well as those that were triggered a few months ago in Catalonia, following the closure of the three facilities of the Japanese car company Nissan. And those that were unleashed after the closure of the two Galician headquarters of Alcoa, the North American multinational aluminium company, closures that in total have led to the loss of 3,500 direct jobs and have left many thousands more in a critical situation.

PHOTO/Airbus - Airbus ha confirmado el pasado 30 de julio que sus pérdidas durante el primer semestre de 2020 ascienden a 1.900 millones de euros, con 166 de sus aviones en servicios en diferentes aerolíneas pendientes de regresar al vuelo por la crisis de la COVID-19
PHOTO/Airbus - Airbus confirmed on 30 July that its losses for the first half of 2020 amount to 1.9 billion euros, with 166 of its aircraft in service on different airlines pending return to flight due to the COVID-19 crisis

After more than a month of regular meetings and negotiations between a Spanish inter-ministerial team and Airbus' senior management, the chief executive of the European industrial corporation Airbus, Guillaume Faury, has managed to get three ministers and the Spanish Prime Minister himself, Pedro Sánchez, seated at the same table to try and "what about me" and seal a short, medium and long-term agreement.

There is a reason why Airbus leads in Europe the design, development and production of commercial and military airplanes and helicopters, as well as satellites, and competes directly with the big American corporations Boeing, Lockheed Martin and Northrop Grumman. In Spain, its turnover in 2019 amounted to 13,000 million euros, so the government considers Airbus a driving force behind the rest of the national activity. 

Involved but absent ministers

The conclave where the white smoke was produced took place on 30 July at the seat of the Presidency of the Government, in the Moncloa Palace in Madrid, and brought together President Pedro Sánchez and his Ministers of Defence, Margarita Robles; Industry, Trade and Tourism, Reyes Maroto and the Minister of Science and Innovation, Pedro Duque.

They were joined by the Director of the Department of National Security of the Office of the President of the Government, General Miguel Ángel Ballesteros, who is responsible for the President's advisory body on National Security matters, accompanied by executives with knowledge of aerospace matters.

PHOTO/EFE - El presidente de Andalucía, Juanma Moreno (centro), ha hecho todo lo posible para evitar una sangría de despidos en las factorías de Airbus en su comunidad autónoma. Junto a él Guillaume Faury (izquierda) y el presidente de Airbus España, Alberto Gutiérrez (derecha)
PHOTO/EFE - The President of Andalusia, Juanma Moreno (center), has done everything possible to avoid a bloodletting of layoffs at Airbus factories in his autonomous community. Next to him Guillaume Faury (left) and the President of Airbus Spain, Alberto Gutierrez (right)

It is curious that, given the content of the meeting, neither the Minister of Finance, Maria Jesus Montero, nor the Minister of the Interior, Fernando Grande-Marlaska, were present. Perhaps it is that Moncloa considered that President Pedro Sánchez and five of his ministers were already too many to sit in front of Guillaume Faury, the Frenchman who has been in charge of Airbus for 19 months.​​​​​​​

In essence, the Spanish Government's commitment covers five major packages of measures and concessions. These range from direct financial aid to the multinational and its chain of suppliers and to the airlines that fly Airbus aircraft, to advance payments to finance the subsequent delivery to the Ministry of Defence of already contracted weapons systems, such as the A400M military transport aircraft and the NH90 helicopter. 

It also includes confirmation of Spain's participation in ongoing international weapons programmes, such as the future Tiger Mk III combat helicopter or the EuroMale, an ambitious project led by Germany with the participation of France, Italy and Spain to develop and manufacture a long-range military drone with large observation capabilities. And, of course, Airbus could not leave aside to assure the Spanish presence in the financing of the following phases of the Future Air Combat System, better known as FCAS.

More than 70 planes and helicopters

But what has a greater specific weight is what has been agreed in the area of defence, where the Spanish government has committed itself to setting up new programmes for the acquisition of military aircraft and helicopters. In this aspect, the joint communiqué uses in some cases a cryptic language, which makes it difficult for ordinary citizens to understand. 

PHOTO/Airbus DS - Concebido, desarrollado y fabricado en distintas factorías de Airbus, el Eurofigher es el principal y más numeroso avión de combate que poseen las Fuerzas Aéreas de Alemania, Gran Bretaña, Italia y España
PHOTO/Airbus DS - Designed, developed and manufactured in different Airbus factories, the Eurofigher is the main and most numerous combat aircraft owned by the Air Forces of Germany, Great Britain, Italy and Spain

For example, it speaks of "the transformation of three A330s into multi-purpose MRTT refuelling aircraft". Firstly, the Air Force does not have any Airbus A330s, so it can hardly transform them. What is not explained is that Moncloa commits the Ministry of Defence to acquire from Airbus three large four-engine commercial A330 aircraft to convert them into the military version MRTT, a refuelling aircraft for in-flight projection of personnel and cargo to distant operation theatres.

The acquisition of four C295 aircraft in their maritime patrol version, for surveillance missions at sea, is also confirmed. These aircraft are manufactured in Getafe (Madrid) and Seville. This is a priority for the Air Force, whose Plans Division has placed it among its most urgent needs, to renew its outdated fleet of 8 CASA Nurtario CN235 VIGMA aircraft, an aircraft of Spanish origin that is no longer in production.

This includes the purchase from Airbus of no less than 36 twin-engine H135 helicopters - a number that can be increased to 59 - under the procedure of a joint programme between the Ministries of Defence and the Interior. The H135 is a model of aircraft that is widely used in the police field and is used by the Army for advanced flight training and by the Military Emergency Unit (MEU) for the transfer of relief and casualty teams. 

PHOTO/Pool Moncloa - El Gabinete de Prospectiva de Airbus es uno de los más eficientes del mundo y conoce a las perfección las necesidades, limitaciones, debilidades y fortalezas de los gobiernos con los que prácticamente todos los días negocian sus altos directivos
PHOTO/Pool Moncloa - The Airbus Foresight Cabinet is one of the most efficient in the world and is perfectly aware of the needs, limitations, weaknesses and strengths of the governments with which its senior executives negotiate practically every day 

The Government is also committed to activating a Ministry of the Interior programme to acquire four Airbus H160 twin-turbine helicopters for the Guardia Civil and the National Police over the next six years, an aircraft that has just been certified by the European Aviation Safety Agency and is expected to be certified by its US equivalent, the Federal Aviation Administration, shortly.

Airbus' commitments

Everything agreed was in different project phases within the General Directorate of Armament and Material of the Ministry of Defence. What Airbus has done is, on the one hand, to accelerate the progress of the programmes. And, on the other hand, much more important, to make sure that the decision of the team of Minister Margarita Robles and the new Secretary of State for Defence, Esperanza Casteleiro, favours a solution that clearly and directly favours the multinational, of which the Spanish State is a founding partner.​​​​​​​

The concessions made by the Spanish Executive are not made in time, with a few exceptions. One of them is the implementation of the so-called Aeronautical Technology Plan, which is linked to the European Union's Recovery Funds and has a budget of 185 million euros. It will be managed by the Centre for the Development of Industrial Technology (CDTI), which is why the Ministers of Science and Industry, Pedro Duque and Reyes Maroto, are present. The commitment is to determine its budget allocation for the period 2020-2023. It is detailed that in the present year it will be endowed with 25 million, in 2021 with 40, in 2022 it will be 80 and in 2023 with 40 million euros.

PHOTO/Airbus - Ingeniero aeronáutico de formación e ingeniero de vuelo y pruebas,  Guillaume Faury y su equipo saben muy bien cómo negociar con los políticos españoles
PHOTO/Airbus - Aeronautical engineer by training and flight and test engineer, Guillaume Faury and his team know very well how to negotiate with Spanish politicians

The agreements do not end there. The Executive assumes that "other measures" will be added to the previous amounts, which are not specified, as well as "partially reimbursable aid" valued at more than 50 million euros per year, to finance projects aimed at maintaining and strengthening the current capabilities of the aeronautical and defense sector in Spain and prepare the next generation of sustainable energy technologies and zero emissions.

And just in case something was missing, Madrid includes a whole range of initiatives that go from increasing export subsidies, its support for Airbus to get the United States to remove the tariffs it has imposed on large non-US civil aircraft, and contributions in the order of 15 million euros per year during 2020-2025 for innovation processes. Not satisfied with the above, the Government adds the creation of a Supply Chain Support Fund endowed with a minimum of 100 million, to help mitigate the impact of the COVID-19 crisis on the sector and to increase the participation of the Spanish branch of Airbus in national space programmes and the European Space Agency (ESA).  

But what is the counterpart on the part of Airbus? While on the government side the commitment in many cases is very defined in terms of dates and economic amounts, what the European multinational offers in return is more ambiguous and, at the same time, easier to implement.

PHOTO/El Digital de Albacete - Guillaume Faury fue durante más de 7 años el máximo responsable de Airbus Helicopters (antes Eurocopter), por lo que conoce muy bien los motivos por los que la filial española de helicópteros se estableció en Albacete, cuyo acceso principal se muestra en la imagen
PHOTO/El Digital de Albacete - Guillaume Faury was the head of Airbus Helicopters (formerly Eurocopter) for more than 7 years, so he knows very well the reasons why the Spanish helicopter subsidiary was established in Albacete, whose main access is shown in the image 
Include Spanish senior managers

For example, one of the Spanish demands that has been included in the bilateral agreement is to create a mechanism for dialogue and information between the two parties, to meet at least once a year, a request that the Madrid government has been calling for for many years with the executives in Berlin and Paris. Another is that Airbus' subsidiaries in Spain should maintain - not increase, but maintain - their responsibilities in the development and manufacture of structures for current and future Airbus commercial aircraft, especially in composite materials technologies, which are led by the factory in Illescas (Toledo). 

Another aspect that, 50 years after the creation of Airbus, it seems incredible that it has not yet been established in Spain is the adoption of a security and defence agreement that, like those that Airbus already has with France and Germany, will make it possible to safeguard the interests of the Spanish State.

And of course, minimising the impact on the loss of jobs in Spain and seeking solutions for plants with a lower workload, the most important thing for the government and the social peace it hopes to obtain at all costs ... and cost. According to official Airbus data released on 30 July, its losses in the first half of 2020 amounted to 1.9 billion euros, and 166 of its aircraft in service with different airlines - and 462 from Boeing - are pending a return to flight due to the COVID-19 crisis.

PHOTO/Airbus - El cuatrimotor de transporte A400M se integra en su totalidad y en Sevilla tras recibir las distintas partes de su estructura y los motores de los distintos centros de fabricación de Airbus repartidos por Europa
PHOTO/Airbus - The four-engine A400M transport is fully integrated in Seville after receiving the different parts of its structure and the engines from the different Airbus manufacturing centres spread throughout Europe 

In the field of helicopters, whose Spanish factory is located in Albacete - of which Guillaume Faury was its supreme head, having been between 2013 and 2018, the CEO of Airbus Helicopters - the multinational is considering implementing a logistics interconnection centre to promote the creation of an Aeronautical and Logistics Park in that city. This includes the transfer of design authority for the rear fuselages of all Airbus helicopters, a measure of great importance.

As a curiosity. Absolutely nothing has been agreed upon regarding the interest repeatedly expressed by successive Spanish governments to increase their stake in Airbus, which through SEPI is 4.1%, while those of the Paris and Berlin governments are around 11%. In contrast, it is envisaged that Spain has an expectation of achieving a balanced and proportional participation in senior management positions, but this is not the result of any commitment on the part of Airbus. At present, its Executive Committee is made up of a dozen senior managers, mostly French and German, some British and Italian, but no Spaniards. It is to be hoped, however, that, as a sign of goodwill, Guillaume Faury will make this wish come true in the near future, a measure that will cost the corporation nothing.