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More than 100 dismissed in Airbus compliance crackdown: sources

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APRIL 9, 2019

FILE PHOTO: Airbus CEO Tom Enders poses during the company’s annual results news conference in Blagnac. – Reuters/Regis Duvignau

PARIS (Reuters) – Airbus dismissed more than 100 people and issued more than 300 warnings for ethics or compliance reasons in 2018, two people familiar with the company data said, as it conducts a wide-ranging internal crackdown and deals with outside fraud probes.

The aerospace group is being investigated by UK and French authorities over suspected corruption dating back over a decade and is in the fifth year of a sweeping internal probe designed to improve its chances of winning favorable settlements.

An Airbus spokesman declined to comment on the figures or give annual comparisons. The dismissals coincided with a sharp increase in the use of an internal whistleblower system, providing a guide to the trend on compliance issues.

Complaints handled by the system almost doubled last year and mostly involved matters covered by ordinary employment law.

The service also handled close to 40 allegations of fraud and half a dozen accusations of bribery. More than 10 of the reported cases involved suspected breaches of export controls, the two people said. Airbus declined to comment.

The company, which employs around 130,000 people worldwide, is under investigation in the United States over suspected violations of export controls and U.S. officials have also kept a close watch on the European bribery probes.

The figures emerged on the eve of a shareholder meeting as some investors worry about Airbus’s exposure to potential fines, which analysts say could run to several billion dollars.

“Airbus shareholders are still waiting for a full disclosure on the allegations of bribery and corruption cases of the past. For the future, Airbus (has) enhanced compliance standards to prevent further incidents and the company seems to be on the right track,” Frankfurt-based fund manager DWS said.

Chief Executive Tom Enders has said Airbus has had to handle management turnover at the same time as a wave of scheduled retirements and acknowledged 2018 had been tough.

“I am today much more optimistic about the company managing these difficult issues than frankly I would have been a year ago,” he told a Feb. 14 news conference.

LAWYER FEES

Airbus is spending more than 100 million euros ($113 million) a year on lawyers to investigate staff to help win a prosecution settlement in Britain and France over the fraud allegations resulting from a system of middlemen it says it abandoned in 2014. It was not clear how many of the dismissals resulted from this drive.

A British judge said in 2017 that companies must present a radically new face and significant co-operation in rooting out their own violations to win a settlement and avoid charges.

The internal probe has led to growing complaints among staff of a witch hunt, people who deal with the company say. Help lines handled around 80 cases of alleged moral harassment, the company data shows.

Industry sources say the internal probe has had a dampening effect on Airbus sales, which slumped last year. Several executives are expected to join a wave of senior departures despite not facing specific accusations, the people said.

Airbus declined to comment.

Staff malaise turned to anger when it was reported last week that Enders retires on Wednesday with a total retirement package of almost 40 million euros over 20 years.

Enders and other individuals are under investigation over the sale of fighters to Austria and has denied wrongdoing.

The Airbus spokesman defended the pension package, which is expected to be raised at an annual meeting on Wednesday.

“There is no golden, silver or bronze parachute. These are contractual obligations that were agreed many years ago.”

Enders is credited with unifying a once fragmented company and improving governance but leaves amid disagreement over his strategy for handling the compliance campaign.


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