A file picture of visitors looking at aircraft models at the EADS booth during the ILA Berlin Air Show in Selchow near Schoenefeld south of Berlin.
PARIS: EADS will take the name of its flagship brand Airbus and target higher profits by combining defence and space units, Europe’s top aerospace group confirmed yesterday, in a move that could involve job cuts.
Nine months after giving in to political opposition to his attempt to merge with UK arms firm BAE Systems, Chief Executive Tom Enders declared civil jets the main “growth engine” for EADS investors, who pushed shares to new highs.
After unveiling a strong batch of commercial earnings that included a rise in Airbus order targets, Enders did not rule out job cuts in the group’s 45,000-strong defence and space operations, which will be based in Germany.
“It (the reorganisation) means some real restructuring, but we are forced to do it: the defence business is ... shrinking in Europe,” he said.
The company also warned the move could lead to restructuring charges later in the year - a standard sign ahead of layoffs. But it also deferred the politically sensitive decisions until after German elections in September by promising to carry out a more detailed review of the proposals in the second half.
The changes will come into effect starting from Jan. 1, allowing time for what could be lengthy talks with unions. “To keep the company economically successful, the restructuring must take place in a socially acceptable way,” Ruediger Luetjen, head of the company’s European works council and a representative of trade union IG Metall, said.
The company is already on a potential collision course with the German government over the allocation of jobs for Airbus A350 jets, in a dispute that shows few signs of easing.
People familiar with the matter say Airbus is unwilling to give guarantees over the share of work on the latest jet as long as Germany holds back a development loan. Berlin, for its part, wants guarantees about work on future projects.
“The German government will work closely (with EADS) during the upcoming restructuring process and will place great importance on Germany’s interests as an industrial location,” Economy Minister Philipp Roesler said.
EADS was formed in 2000 from a merger of French, German and Spanish assets that incorporated passenger jet maker Airbus, founded three decades earlier and now a global rival to Boeing.
The name EADS — originally European Aeronautic, Defence & Space Co — was never widely recognized and the group has long discussed changing its name to Airbus. But politics have until now made it difficult to tinker with Europe’s leading symbols.
Enders hopes the decision to unite under a globally recognized brand will galvanize the rest of the business from space rockets to helicopters and encrypted communications.
Eurocopter, the world’s largest commercial helicopter maker, will also be renamed Airbus Helicopters.
The decision to co-opt the Airbus brand risks unsettling a delicate balance between EADS and the main Airbus division, where CEO Fabrice Bregier is widely seen as Enders’ successor.
Reuters
