Airbus to Slim Down Management as Deliveries Come Under Pressure
Enders plans to eliminate duplication in corporate structure
Company must ship more older A320s to reach handover goal
Airbus Group SE Chief Executive Officer Tom Enders said the European aerospace group will restructure its management and organization in an effort to reduce costs by eliminating duplication of roles and functions.
The plan marks an extension of efforts already in place to pare expenses at an operating level, according to Enders, with the emphasis now shifting to achieving savings between the company’s corporate and divisional structures.
“We are not going for competitiveness measures just at the shop-floor level,” Enders said Monday in an interview at Airbus’s base in Toulouse, France. “It’s a permanent task for corporate structures, headquarters, etcetera. We need to be as lean and as efficient as possible.”
Enders didn’t provide a timetable for the restructuring or say what impact the plan would have on jobs.
Airbus has had a particularly unwieldy organization after initially having two headquarters and two CEOs to reflect its Franco-German nationality. Even after the company adopted a unitary structure the main planemaking arm was so large that it dominated the rest of the group and had a parallel management.
Fabrice Bregier, CEO of the aircraft arm, also known as Airbus, said the company still plans to deliver 650 planes this year, even after engine supplier Pratt & Whitney said Friday it’s curbing the handover of turbines used on the new A320neo aircraft, citing production issues.
Airbus, whose other activities range from helicopters, fighter planes and defense electronics through space launchers and drones, will achieve the goal by increasing deliveries of original A320ceo planes, which use older engine models, for which it still has backlog of orders.
The European company is under pressure after announcing charges totaling 1.4 billion euros ($1.6 billion) in July from delays and glitches involving the A400M military transport and A350 jet, leaving it reliant on a second-half production surge to meet its full-year goal of matching 2015’s earnings.
Enders and Bregier commented on the sidelines of the inauguration of Airbus’s Leadership University in Toulouse, which will offer courses to keep employees up to date with changing technologies and developments. The group has spent 36 million euros on developing six campuses, two in France, two in Germany, one in Spain and one in China.
The Financial Times reported earlier that Airbus would begin consulting with unions on the restructuring plan soon. The company is slated to post third-quarter earnings on Oct. 26.