EADS Defense Unit Adds Cyber-Protection Jobs as Weapon Sales Sag

European Aeronautic, Defence & Space Co.’s defense unit plans to double the number of employees at its cyber security subsidiary, in a buildup that contrasts with its weapons business, where dwindling demand is costing jobs.

Cassidian, as the EADS division is called, plans to have about 700 workers within three years offering data protection from hacking in areas such as corporate information technology, Chief Executive Officer Bernhard Gerwert told journalists.

“We’ll be able to play a very meaningful role in the cyber security business in Europe,” Gerwert said in Munich yesterday. “For a couple of years we have expanded into security services beyond traditional defense areas.”

Gerwert, five months into the job as Cassidian CEO, is pushing through a second cost-cutting program as European governments cut military spending and the company failed to win recent contracts for fighter jets. The company, based near Munich, plans to lift operating profit to 10 percent of sales by 2015, from 5.7 percent in 2011 by reducing the number of employees and doing more business abroad.

The Eurofighter consortium, made up of Cassidian, BAE Systems Plc. (BA/) and Finmeccanica SpA (FNC), sold 12 Eurofighter Typhoon to Oman in December, after the company lost out on bigger competitions in India, Japan and Switzerland. The plane also competes in contests in South Korea, Malaysia, and Saudi Arabia.

Drones

Gerwert said he’ll focus on businesses such as secured communications, where Cassidian holds a leading position with Motorola Solutions, Inc., cryptographic solutions, and border control systems. He plans to offer technology developed to safeguard parent company EADS to outside clients. Cassidian generates about 70 million euros ($96 million) with cyber space technologies today.

Cassidian wants to support efforts by European governments to purchase armed drones, Gerwert said. The company spent 80 million euros to develop the Talarion drone before it failed to get government endorsement, and 600 million euros, together with partners, on its entire range of unmanned air vehicles.

“I assume we’ll see a European-made armed drone in the medium to long-term,” Gerwert sad. “We are in very intensive talks with the defense ministries of Germany, France and other nations.”

Germany’s military is leasing Heron 1 unarmed drones made by Israel Aerospace Industries Ltd., and Defence Minister Thomas De Maiziere said today the military must fill a gap in its arsenal and purchase an armed model jointly developed with France, independently from suppliers in the U.S. or Israel.

To contact the reporter on this story: Richard Weiss in Frankfurt at rweiss5@bloomberg.net

To contact the editor responsible for this story: Benedikt Kammel at bkammel@bloomberg.net

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