Air­bus un­veils leaner struc­ture

Kuwait Times - - BUSINESS -

PARIS: Air­bus rolled out a leaner new struc­ture yes­ter­day, com­plet­ing a re­cent merger be­tween its par­ent com­pany and its dom­i­nant plane mak­ing arm, and in­clud­ing a shift in the re­port­ing line for its key com­mer­cial sales team to group CEO Tom En­ders. That move, which con­firmed a Reuters re­port, raised con­cerns among some in­sid­ers and cus­tomers about a pos­si­ble power strug­gle with long-stand­ing air­planes boss Fabrice Bregier, though Air­bus de­nied any ten­sions.

Ce­ment­ing changes first out­lined last year, the “one Air­bus” re­or­ga­ni­za­tion in­volves a sin­gle head­quar­ters in Toulouse, France, with Bregier con­firmed as group-wide chief op­er­at­ing of­fi­cer and pres­i­dent of com­mer­cial air­craft. “We need to be­come more in­te­grated, more col­lab­o­ra­tive and less bu­reau­cratic for speed­ier de­ci­sion-mak­ing and ex­e­cu­tion,” En­ders said in a letter to em­ploy­ees. The re­vamp, which saves hun­dreds of mil­lions of eu­ros in over­heads, is de­signed to com­plete a decade-long drive to turn the for­mer Euro­pean con­sor­tium - with a his­tory of strong French and Ger­man gov­ern­ment in­flu­ence - into a more nor­mal com­pany, and pre­pare for dig­i­tal in­no­va­tions sweep­ing through in­dus­try.

But in an un­ex­pected ad­just­ment re­ported by Reuters on Fri­day, Air­bus said its com­mer­cial sales team, best known for con­test­ing lead­er­ship of the jet mar­ket with Boe­ing, would now re­port di­rectly to En­ders and by-pass Bregier. That de­ci­sion is seen as sen­si­tive be­cause it re­vis­its a power-shar­ing deal be­tween the Ger­man En­ders and French­man Bregier that ini­tially gave the lat­ter re­spon­si­bil­ity over all plane mak­ing ac­tiv­i­ties. En­ders said in his com­mer­cial air­craft role, Bregier would lead pro­grams, sup­port and ser­vices, en­gi­neer­ing, man­u­fac­tur­ing, pro­cure­ment and qual­ity. “How­ever, due to the heavy op­er­a­tional chal­lenges in our largest rev­enue-driv­ing busi­ness, and to slightly re­bal­ance our in­ter­nal bur­den­shar­ing, I will lead sales and mar­ket­ing,” he said in his letter. The de­ci­sion sent tremors though the com­mer­cial arm and raised ques­tions over the fu­ture of Bregier, an in­dus­trial and mar­ket­ing heavy­weight whose ties to En­ders are seen as key to Air­bus’s abil­ity to smooth out­put and face a resur­gent Boe­ing. “Peo­ple are very sur­prised. There is no doubt that this is an im­por­tant step,” a per­son close to the com­pany said.

A jet fi­nancier ex­pressed “sur­prise” at the move, given well-es­tab­lished re­la­tions be­tween many air­lines and Bregier.

Other crit­ics said the sud­den move re­flected a heavy-handed new man­age­ment style or risked be­ing per­ceived as a weak­en­ing of French in­ter­ests. “It is cre­at­ing a cul­ture in which peo­ple will go back to ‘Ger­mans ver­sus French’ and peo­ple hav­ing to choose which camp they are in. It is not good for morale or the cul­ture of the com­pany,” said a per­son with de­tailed knowl­edge of the group. An Air­bus spokesman called it a rou­tine in­ter­nal mat­ter of re­port­ing lines, as with any nor­mal com­pany.

Po­lit­i­cal test

The new struc­ture comes al­most 10 years to the day af­ter lead­ers of France and Ger­many agreed in Toulouse to abol­ish a sys­tem of dual con­trol over the com­pany, with the CEO role shared be­tween two peo­ple, one French and one Ger­man. En­ders had to wait an­other five years to be­come sole CEO of the group and an­other year be­yond that to re­duce the po­lit­i­cal in­flu­ence of French and Ger­man gov­ern­ment share­hold­ers. Both now own 11 per­cent but their power is lim­ited un­der a 2013 over­haul.

An­a­lysts say Paris and Berlin have gen­er­ally had their at­ten­tion else­where dur­ing the euro zone cri­sis but that their hand­soff ap­proach re­mains to be tested against a re­cently soft­en­ing mar­ket for jets, with thou­sands of jobs at stake. Air­bus also faces a raft of po­lit­i­cally charged de­ci­sions, such as how long to keep build­ing its slowselling A380 or its re­sponse to cor­rup­tion probes in Bri­tain, France and Aus­tria. De­spite re­sist­ing in­ter­fer­ence, En­ders ap­peared to rec­og­nize the sig­nif­i­cance of French pol­i­tics to Air­bus by writ­ing a letter of sup­port in the fa­mil­iar ‘tu’ form to then­pres­i­den­tial can­di­date Em­manuel Macron, which many in Paris saw as a gaffe.

En­ders is, how­ever, con­vinced Air­bus has to find a new agility to cope with the way ‘Big Data’ and si­mul­ta­ne­ous break­throughs in other tech­nolo­gies are cre­at­ing op­por­tu­ni­ties for new­com­ers such as US rocket maker SpaceX. He ac­knowl­edged the new re­or­ga­ni­za­tion, which unions say could af­fect over 1,000 jobs, would be “un­com­fort­able” for some. But he told staff Air­bus was “wav­ing good­bye to an era in which a re­turn to ‘sta­bil­ity’ was a re­al­is­tic as­pi­ra­tion”.—Reuters

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