Airbus' global restructuring to boost competitiveness

Tom Enders, CEO of Airbus Group, raises the Flag of the new logotype in front of the Headquarters in Toulouse, France, Jan 2, 2014. The European aerospace giant Airbus SAS changed its name to Airbus Group on Jan 1. [Photo / icpress.cn]

Aviation giant hopes move will benefit helicopter, defense units

Laurence Barron is exhilarated to have the Airbus logo back on his business card.

The commercial lawyer-turned-aviation veteran, who served at Airbus SAS for more than 30 years, was appointed chairman of EADS China at the beginning of 2013.

Like his predecessors, Barron had to explain to numerous local government officials the nature of EADS - the parent company of Airbus, Eurocopter and the lesser-known space and defense technology providers Astrium and Cassidian.

But that's not the case anymore.

The European aerospace giant changed its name to Airbus Group on Jan 1. By shedding the former indistinctive corporate name to adopt that of its better-known passenger aircraft division, the group hopes to boost its global profile and competitiveness.

The group will also combine its space and defense entities into one division - Airbus Defense and Space. Its helicopter business will be renamed Airbus Helicopters, while the commercial aircraft unit will keep the Airbus name.

Laurence Barron, chairman of Airbus Group China

"We're making our organization easier to understand for ourselves and for the outside world. And more important, we will improve efficiency and reduce costs by making our organization leaner and creating synergies between divisions," Barron said.

The main catalyst for the restructuring project was the flat or even shrinking defense and space budget in Europe, which is forcing the company to focus increasingly on export markets and creates an urgent need to improve access to international customers.

The restructuring project will result in 5,800 job cuts at the defense and space division and corporate headquarters in Europe by the end of 2016. No jobs will be eliminated in China, Barron said.

In China, the company will move its helicopter and defense/space offices from the downtown area to the Airbus campus near Beijing's airport by the middle of 2014. The three divisions will share centralized services, such as finance, HR and communications.

"We will have a simple structure with one name, under one roof and shared services," said Barron, who personally started the relocation project four years ago when he was Airbus China president.

Globally, Airbus contributed about 70 percent of the group's earnings, which stood at 56.5 billion euros ($77.66 billion) in 2012. In China, Airbus is even more dominant with a 97 percent contribution to earnings.

Despite huge potential, China's civil helicopter market is still fledgling. A major constraint is airspace restrictions and the resulting lack of air and ground services. The defense and space business is even more restricted due to the European Union's arms embargo on China and its controls on technology exports.

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