Astrium To Shed 2,000 Jobs as Part of Broader Transformation

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PARIS — Europe’s Astrium space hardware and services company plans to reduce its work force by 1,000 full-time employees and 1,000 subcontractors to realize more than 400 million euros ($560 million) in annual savings as it seeks to boost efficiency, Astrium’s parent company, EADS, said May 13.

In a conference call with investors, EADS Chief Financial Officer Hans Peter Ring said Astrium’s internal transformation program, called Agile, is well under way and designed to prepare the company for “a challenging competitive environment.”

Ring said EADS, which owns 100 percent of Astrium, has not yet taken the expected charges against the costs of restructuring because financial accounting rules require that the extent of the headcount reduction be known precisely.

Including its full-time contractors, Astrium employs some 15,000 people, with major installations in France, Germany, Britain, Spain and the Netherlands.

Its principal divisions are Astrium Space Transportation, which is prime contractor for Europe’s Ariane 5 heavy-lift rocket and the French military’s strategic missiles; Astrium Satellites, which is active in the commercial, military and civil-government satellite sectors; and Astrium Services, whose businesses include telecommunications and Earth observation services sold to commercial and government customers.

Astrium and EADS officials in recent months have referred to Agile as a broad reorganization of a company that was stitched together from competing industrial and national interests only after making numerous compromises, particularly between Germany and France.

Rising government space budgets helped mask some of the overlaps for several years, but the current government budget climate in Europe makes it likely that space spending will be hard-pressed to keep up with inflation in the next few years.

Astrium remains profitable, but its 4.4 percent pretax profit margin for the first three months of 2011, the same margin as a year earlier, continues to fall short of the 5 percent margin requested of it by EADS management.

For the three months ending March 31, Astrium reported revenues of 1.17 billion euros, up 27 percent over the same period a year ago. Ring said the main contributors were Ariane 5 launch successes, as well as revenue from previously booked Earth observation and telecommunications satellites.

The pretax profit margin, he said, was higher in Earth observation and telecommunications satellites, and in launch vehicles, but offset by lower profitability in geo-information systems, which Ring said is “experiencing a slowdown in the current business environment. Astrium’s Geo-Information Services division includes the former Spot Image Earth observation services company, which specializes in optical imagery from the Spot satellites; and Infoterra, which commercializes the German TerraSAR-X and TanDEM-X radar satellites.

Astrium’s backlog on March 31 stood at 15.3 billion euros, up 2 percent from where it was a year ago. Orders booked in 2011 include a satellite integration and test center for the government of Kazakhstan, and the VNREDSat-1 Earth observation satellite for the government of Vietnam.

The first quarter featured the launch of the Astrium-built ATV-2 unmanned cargo vehicle to the international space station.

 

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