Airbus plans to combine all divisions into one company

PARIS: Airbus Group will combine all of its divisions into a single company in a major step toward simplifying a business that spans jetliners to space launchers as Chief Executive Officer Tom Enders seeks to cut costs and speed decision-making.

Fabrice Bregier becomes chief operating officer for the group, making him No. 2 to Enders, while remaining head of the main planemaking unit — renamed Airbus Commercial Aircraft — with the title of president rather than CEO.

As COO Bregier will have oversight of the company’s entire portfolio, which also includes helicopters, missiles, satellites and defense electronics.

The revamp, announced on Friday, seeks to establish Airbus as a regular company, abandoning the last vestiges of the complex structure adopted when it was created in a merger of the biggest aerospace companies from France, Germany and Spain in 2000. It also makes Frenchman Bregier, 55, favorite to succeed Enders, a 57-year-old German, when the CEO stands down.

“The merger of Airbus Group and Airbus paves the way for an overhaul of our corporate set-up, simplifies our company’s governance, eliminates redundancies and supports further efficiencies, while at the same time driving further integration of the entire group,” Enders said. Jobs impact Shares of Airbus traded 1.5 per cent lower at 52.51 euros as 9:10am in Paris.

The stock has declined 15 per cent this year, valuing the company at 40.6 billion euros ($46 billion).

Marwan Lahoud, until now the No. 2 at the corporate level, is to become strategy director, while research and development activities will fall under the direction of Paul Eremenko, who has worked for Google and the Pentagon’s advanced-research arm, according to people briefed on the meeting last night.

Airbus said nothing about the scope of potential job cuts, though Enders told Airbus’s 137,000 employees in a memo obtained by Bloomberg last week that the effects of changes on the workforce “are not negligible.” The group needs to pare expenses as weak sales force it to curb production of the A380 superjumbo and review helicopter output.

Enders has said that the cuts won’t approach the level of the Power8 program last decade, which saved 2.5 billion euros annually at a cost of 8,000 jobs.

Airbus has had a particularly unwieldy organization after initially having two headquarters and two CEOs to reflect its FrancoGerman nationality.

Even after the company adopted a unitary structure the planemaking arm dominated the rest of the group and had a parallel management.