EADS Merges Defense And Space Units, Goes For Airbus Brand

By Jens Flottau jens.flottau@aviationweek.com
Source: AWIN First
July 31, 2013

EADS has decided to make significant changes to its corporate structure and put the entire company under the Airbus brand.

The board of directors followed a proposal put forward by CEO Tom Enders to change the company’s name to Airbus Group. Defense and space units Cassidian and Astrium will be merged and called Airbus Defense and Space. Eurocopter also will lose its current brand and be re-launched as Airbus Helicopters.

The changes come after a strategy review led by Enders over the past few months and follow the collapse of merger talks with BAE Systems in the fall of 2012. “We no longer strive for a balance between commercial and defense/space,” Enders told analysts July 31. “We are completely comfortable with this mix.”

The Airbus Group will consist of the civil aircraft business, which at €36.9 billion ($49 billion) in annual revenues is almost twice as big as all of the company’s other activities combined; Airbus Defense and Space (€13.7 billion), and Airbus Helicopters (€6.3 billion). The company also is reviewing its minority shareholdings in other companies—such as Dassault—and may decide to sell those, but Enders says it is too soon to speculate about that situation.

Most changes affect the Defense and Space unit, which is going to be split in four sub-units: Military Aircraft; Space Systems; Communication, Intelligence & Security Systems, and Equipment.

With revenues of around €4.5 billion, Military Aircraft will be the biggest unit within Defense and Space. It will combine businesses such as Eurofighter, Tornado and Airbus Military, including the A400M and tankers. The unit will be led by Airbus Military CEO Domingo Urena-Raso. Francois Auque, currently CEO of Astrium, will remain in charge of the space business, while the communications unit will be led by Evert Dudok and equipment will be headed by Thomas Mueller. The equipment unit combines the component manufacturing activities of Astrium and Cassidian.

The combined Defense and Space division will be headquartered in Munich, and Enders says “some meaningful restructuring has to be conducted.” That exercise will require “a lot of detailed work and negotiations,” and he does not expect any concrete proposals before the fourth quarter of 2013. The reorganization of Defense and Space is to start by the beginning of next year, and to be completed in the second half.

While Eurocopter also is losing its well-established brand, Enders believes that “even for Eurocopter, Airbus is the better brand.”

EADS saw revenues in the first half of the year rise by 6% to reach €26.3 billion, €5 billion of which was in the defense sector. The company’s earnings before interest, taxes and one-off transactions improved by 21%, to €1.62 billion.


Comments On Articles