Airbus Group To Merge With Its Jetmaking Unit Sources

30 September 2016

Airbus Group SAS is likely to merge with its main planemaking unit, Airbus SAS, as part of a corporate restructuring being finalised on Thursday, people familiar with the matter said.

The restructuring aims to simplify a top-heavy corporate structure inherited from the group's complex origins as a group of separate aerospace firms, and consolidate its position as a European aerospace champion anchored in Toulouse, France.

A spokesman for Airbus Group (AIR.PA) declined to comment.

The merger of the operational parent and jetmaking unit into one company called "Airbus" rekindles an idea debated over a decade ago, but abandoned amid disagreements among former managers and shareholders aligned with competing French and German interests.

The group changed its name from EADS and overhauled its governance in 2013-14, limiting the influence of French and German minority state shareholdings and granting more independence to management under German-born Chief Executive Tom Enders.

But it remained saddled with separate bureaucracies and confusion over the brand, with the planemaking unit keeping the core "Airbus" identity and no fewer than five CEOs spread across the parent company, three units and one geographical division.

Analysts say the reorganisation will reinforce Enders as sole CEO while removing any ambiguity over his successor, as planemaking boss Fabrice Bregier steps up to become chief operating officer of the whole company.

The Frenchman will continue to run jetmaking activities, which will be solely a division rather than separate entity.

The impact on jobs was unclear but Enders has pledged to avoid "massive" redundancies among the 137,000 staff.

Nor was it immediately clear how the new structure would fit under the company's publicly listed legal parent, Airbus Group SE, based in the Netherlands.

Shares in Europe's rival to Boeing (BA.N) rose 1 percent.

Highlighting its growing international focus, the decision to streamline the European firm was being thrashed out at a board meeting at a new Airbus plant in Mobile, Alabama.

Due to be announced as French engineer Alstom remains mired in a political storm over a factory closure, the reorganisation will heavily talk up new digital methods, something Enders hopes will make aerospace stand out from declining industrial sectors.

Sources said on Wednesday the company's defence chief, Siemens veteran Dirk Hoke, would take a lead role in spreading digital processes and services across the group.

(This article has be refiled to corrects the dates for change of name and governance to 2013-2014, instead of 2012, paragraph 5).


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