‘The reorganisation is designed to support the Group’s existing goal of improving its return on sales’- EADS

Months after the collapse of the EADS-BAE proposed merger, EADS has announced its decision to make significant changes in its corporate structure and bring its defence and aerospace operations under the Airbus brand. An EADS spokesperson said to SP’s, “The change will provide optimised market access, cost and market synergies and improved overall competitiveness.” Indeed Airbus is the EADS’ top brand and the company states that pooling the space and defence entities Airbus Military, Astrium and Cassidian is the Group’s response to the changing market environment with flat or even shrinking defence and space budgets in the Western hemisphere. “The Airbus brand and our commercial aviation business are the Group’s key growth driver and our undisputed international flagship. The rebranding is just a natural step towards the target of being a more integrated Group. The “new” Airbus Group will remain a leader in commercial aerospace and strengthen our position through innovation, services and a more global approach. The reorganisation enables us to focus on our core areas of aeronautics and space, which represent more than 95 per cent of our activities. Airbus alone accounts for almost 70 per cent of our revenues. Pooling our space and defence businesses will help us greatly enhance our competitiveness and lead the way to future growth,” said EADS.

The Airbus Group will comprise three divisions: Airbus, which will be responsible for all commercial aircraft activities; Airbus Defense & Space, which will be home to the Group’s defence and space activities including military transport aircraft and Airbus Helicopters, which will comprise all commercial and military helicopter activities.

But with this will the company’s successful ventures like the civil and military helicopter market leader, Eurocopter, lose its brand name? ‘No’ says the company, “Eurocopter has historically been a successful division and will continue to lead the commercial and public helicopter market with its innovative products. We are convinced the new branding will facilitate its international business.”

However, Airbus Helicopters, with its civil and military products, will remain unchanged. “The rotorcraft technology is very particular and it’s necessary to maintain the strong synergies between civil and military products,” stated the company.

Formed in July 2000 by the merger of Aérospatiale-Matra, DaimlerChrysler Aerospace AG (DASA) and Construcciones Aeronáuticas SA (CASA), the structural changes are going to be implemented step by step from January 1, 2014, and completed in the second half of 2014. The new design will support the Group’s Flightpath 2015 for improved shareholder returns. Explaining further to SP’s, the EADS spokesperson stated, “The reorganisation is designed to support the Group’s existing goal of improving its return on sales.”

The Airbus Defense & Space division will have about 45,000 employees and an annual turnover of about €14 billion and will be headquartered in Munich, Germany. The Chief Executive Officer of Airbus Defense & Space will be Bernhard Gerwert and it will have four business segments – Military Aircraft, headed by Domingo Ureña-Raso; Space Systems, headed by François Auque; Communication, Intelligence and Security Systems, headed by Evert Dudok; and Equipment, headed by Thomas Müller. Julian Whitehead will be the division’s Chief Financial Officer.

Revealing the company’s decision while updating on the company’s reported increased revenues and profitability in the first half of 2013, EADS Chief Executive Officer Tom Enders said: “What we are unveiling today is an evolution, not a revolution. It’s the next logical step in the development of our company. We affirm the predominance of commercial aeronautics in our Group and we restructure and focus our defence and space activities to take costs out, increase profitability and improve our market position. The renaming simply gathers the entire company under the best brand we have, one that stands for internationalisation, innovation and integration and also for some two-thirds of our revenues. It reinforces the message that ‘we make things fly’.”

EADS states that with a more efficient, integrated and competitive organisation, it is confident that international activities will be better positioned and facilitates business on a global scale, including India. “It is our mission to strengthen the longterm competitiveness of our business. Our target is to be best positioned to meet the challenges of the future and we believe our new strategy guides the way towards achieving that.”

The company says developing the most innovative products will remain a key priority for the reorganised Group. However, it is to be seen how the restructuring will affect technological innovations in EADS/Airbus in the years to come.