Airbus reaches deal with Canada workers, averting lockout threat

Airbus SE reached an agreement with its employees building the single-aisle A220 jet in Canada after they voted in favor of a mediator's recommendations, averting a threatened lockout.

A mediator appointed by the Quebec government submitted his recommendations April 29, including wage increases totaling 23 per cent over the next five years, along with other benefits.

The unionized employees accepted the conditions Wednesday evening with a majority of 77 per cent, according to a statement from the union, a local unit of the International Association of Machinists and Aerospace Workers. About 81 per cent of the workers voted.

A rejection of the deal would have triggered a lockout starting Thursday at the Mirabel manufacturing plant near Montreal. The union represents 1,300 out of 3,000 workers at the Mirabel facility.

The workers rejected a proposed labor agreement in principle between the French aircraft manufacturer and the workers' union last month "- it was the third offer made by Airbus this year.

"Despite the favorable outcome, this negotiation generated a great deal of frustration, which will leave scars," union spokesperson Eric Rancourt said in the statement.

Airbus said in a statement that the deal will "facilitate a better balance between shifts" and "enable increased efficiency in order to produce a higher number of A220s and reach the break-even point for the aircraft program in 2026."

The A220 program, which was developed in Canada, is 75 per cent owned by Airbus and 25 per cent by the Quebec government's financial arm, Investissement Quebec, through a limited partnership. The investments by the province total C$1.3 billion ($947 million), but their market value had dropped to C$300 million as of last year, according to Quebec's economy ministry.

The single-aisle airplane, formerly known as the Bombardier Inc. C-Series, was rescued by Airbus in 2017, but the company is still struggling to control costs.