Group restructuring: eads becomes airbus

Group restructuring: eads becomes airbus

For this, the defense and space divisions airbus military, astrium and cassidian will become the new company airbus defence& space merged.

The move is a response to a changed market environment characterized by stagnating or even shrinking defense budgets in the western world, EADS said wednesday. The structural change will strengthen competitiveness and allow optimized market access and savings. It was initially unclear whether there would be massive job cuts. Group management will not announce detailed information until the fourth quarter. The plans still had to be worked out in detail by top management, company CEO thomas enders said on wednesday.

Head of the new airbus defence& business unit space with about 45,000 employees will be the former head of cassidian bernhard gerwert. The headquarters are to be located in the greater munich area. The fact that the aerospace division is to be headquartered in bavaria is the result of a request by germany. Due to the relocation of the EADS headquarters to toulouse in france, the ottobrunn site had recently lost some of its importance.

Before the changes can take full effect, EADS says it must meet several regulatory requirements and successfully complete consultations with the works council and other approval processes. The helicopter subsidiary eurocopter will also be given a new name and will then operate under airbus helicopters. The new structure should be in place in about a year, enders said.

With the reorganization and renaming, enders continued the restructuring of the group that he had begun after the failed merger with the british aerospace giant BAE systems. "We are reorganizing and focusing our defense and space activities to reduce costs, increase profitability and improve our market position," commented enders. "What we are presenting today is an evolution, not a revolution. It is the next logical step in the development of our company."

With the merger with BAE systems, enders originally wanted to put EADS on a new and, above all, larger footing. The combination should make it easier for the aerospace division to gain a foothold in markets that have been closed to the group until now. But the plan failed due to resistance from berlin. EADS was then given a new shareholder structure, with germany joining as a major shareholder, but at the same time the influence of the state was reduced.

EADS will be more closely aligned with its U.S. Rival boeing after the new restructuring. The latter has also combined its aerospace and defense business into a single unit (boeing defense, space and security). In addition, the most important business is commercial airplanes.

EADS increased both revenues and profitability in the first half of 2013. This development was driven primarily by the civil aircraft business. EADS revenues increased six percent to 26.3 billion euros compared to the same period last year. Group profit improved by 31 percent to 759 million euros.

For the current year, group ceo thomas enders sees the group on track to meet its profit and revenue targets. The new A350 long-haul aircraft is still scheduled to be delivered for the first time at the end of 2014 at the latest after the initial flight test phase. The flight tests were successful. Thanks to a flood of orders at the paris air show in june, airbus expects new orders for more than 1,000 aircraft this year – across all types.

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