Airbus imposes management cuts to save money

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The competition heats up: In restructuring to cut costs and reduce its bureaucracy Airbus has decided to make significant management cuts and merge different divisions.

More here, including this revealing quote:

The move is the latest in [Airbus Chief Executive Tom] Enders’ four-year campaign to overhaul the company in the wake of the 2012 failed merger attempt with Europe’s largest arms maker BAE Systems PLC. “For me this is the logical conclusion of the journey we started in 2012,” Mr. Enders said.

After the deal faltered on German government opposition, he won shareholder backing for a new structure that reduced French, German and Spanish government involvement in company decision making, a legacy of the founding of the company in 2000 through the combination of European aerospace and defense assets.

The first link above also adds this:

[Airbus] 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.

In other words, this restructuring is intended to remove any further government influence on the management of the company. Rather than provide pork for politicians, Airbus will now focus on maximizing its profits. The thinking here also corresponds with how the company organized its joint partnership with Safran and took over design and construction of Ariane 6 from the bureaucracy of the European Space Agency. Expect similar management cuts and even the possible elimination entirely of ESA’s Arianespace division in the coming years.

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