Succession to force in Airbus

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on Monday, may 8, the board of directors of Airbus, announced that the French Guillaume Faury, until now president of division of commercial aircraft, will be the replacement of current ceo Tom Enders when this is removed, the next 10 of April. In the official note of the company, the president of the board of directors, Denis Ranque, was trying to give an image of normality. “We have prepared diligently for this succession,” he noted. “We are very grateful to Tom Enders, who has served Airbus with a lot of passion and success for nearly two decades.”

In reality, the output of the Enders dropped the curtain of the internal war between the ceo and his former number two, Fabrice Brégier, who left the company in February of this year. In addition, it offers as a piece of sacrificial after the successive scandals of corruption in the sales department of the company, particularly the old division of military sales, international, that the Enders defined in 2014 as a “castle of crap”. In February, Airbus reached an agreement with the prosecutor’s office of Munich (Germany) to end an investigation into possible bribery in the sale of fighter jets to Austria in exchange for a fine of 81 million euros. The chief financial officer, Harald Wilhelm, is also retiring next year.

“Enders, and Wilhelm are victims by association of the scandals, like Kiran Rao, who had been the designated successor of the former sales chief, John Leahy,” notes by e-mail Scott Hamilton, an analyst with Leeham. “Although revealed themselves to the irregularities, they have to leave. Rao was not involved, but it falls into this category to be a man who carries 25 years in the sales department, so that the perception has weighed more than the reality”.

The output of Enders also speeds up the process of consolidation of Airbus; the transformation of what was a consortium of independent business —where the sensitivities nationals were tremendously important— in a single vertical structure. This operation, called Project Gemini, aims to end the bicefalia between the presidency of the group, and its division of commercial aircraft, the largest company with a difference. “Until now, when there was a frenchman in the front of the group, there was a German at the head of the division of trading and vice versa,” pointed to by phone Antonio Martin, the secretary-general of intercompanies Airbus of Comisiones Obreras. “That bicefalia going away.” However, the policy continues to import on a company that is in a fourth part of public property. According to the economic daily French Les Échos, Faury, who speaks German fluently, has recently interviewed with the German chancellor Angela Merkel to get his blessing.

Another business model

According to Antonio Martín, CC, OO, the previous experience of Faury in the automotive sector can accelerate the transition of the model of the industry into something more like the automotive sector. “It’s all about the elements of lower value-added produced outside the perimeter of Airbus and the company will focus only on the processes of higher added value,” he explains. But, it indicates the globalization of the production of components will be complex: “Although the greater part of the business is in the area dollar, the heart of the company is in Europe. And in this industry you can’t transfer production like in the automotive world; the capital costs are much larger”.

If the intention of the company is to cause a change in perception, the profile of the future ceo help. Aeronautical engineer by the National Higher School of Aeronautics and Space in Toulouse and due to the prestigious Polytechnic School in Paris, Faury has always been more focused on the technical side of the industry. After the race, he joined the Directorate-General of Armaments of the French ministry of Defence, where he oversaw the launch of the helicopter Tiger. In 1998, he passed through the revolving door and joined Eurocopter, manufacturer of the Tiger, first in the departments of Engineering and Testing, and, as vice president, division of Programs and, then, in the Research and Development.

in Addition, between 2009 and 2013 was out of the group and of the industry to the vice president of Research and Development of car manufacturer Peugeot. During his time in the company, the R & D division took the brunt of the drastic cut of template in Europe. But what ended up pushing her out was an interview in the French daily Le Parisien in September 2012, in which he defended tooth and nail the stake of your company for the engines to diesel, saying that “to say that diesel pollutes is contrary to the truth” and “the air that comes out of the tailpipe is cleaner than the air of the city.”

The return to Airbus rejoined the division of helicopters, where it remained until the output of Brégier. There got to consolidate the first global position of the group despite the collapse of the market derived from the collapse of the oil sector. Their journey outside of the company allowed him to stand between the candidates (not among the favorites) to the position of chief executive officer of Air France-KLM in 2016.

to Keep isolated from the worst practices of the sales department is a point in favor of Faury, but also raises concerns about how it is going to lead the transition from a division that bill 6.450 million euros and the main charge of a group of 66,000 million.

“at The margin of the forms, I see that in terms of the strategy, little will change in the company”, said Martin. “The new bosses, with time, end up plotting their own path,” says Hamilton. “I see Faury doing that.” After the frenchman was appointed responsible of the division of commercial airplanes, sales director, Eric Schulz, announced his departure by arguing “personal reasons”. “He lost his struggle for power, like he had lost Brégier front-Enders,” notes the analyst of Leeham.

The Airbus that is Faury presents a scenario mixed. Two days before the announcement of his appointment, a brand new Airbus A220 painted with the colors of the airline american Delta took off from the airport canadian Mirabel. It is the first plane of the model for a u.s. company and, as such, a symbol of the victory of Airbus over its rival Boeing in the first skirmish of the trade wars that, with the strong backing of Donald Trump, you are going to play in the aviation market.

The Airbus A220 is the old ‘ C ‘ Series of the canadian company Bombardier, a model that, despite having been very well received both by the airlines as passengers, had cost too much time and money of development, until the point dand force Governments canada and quebec to rescue you from the manufacturer. Under pressure from Boeing, the u.s. Government proposed an import duty of 300% on the device, which would have made it impossible to sell in the united States and almost would guarantee the end of the program. Airbus came to the rescue by buying the entire production line for a dollar and moving part of manufacturing to its factory in Alabama (USA).

on the other hand, in the profitable market for aircraft of long range radio, the company will as a consequence of its great rival Boeing in the market of the twin-engine long range radio and low power consumption. “The Airbus A350 is a great plane, but the company is only able to deliver 10 a month, when they would have to exit 13,” notes Hamilton. “Boeing, with its 787, has more possibilities of delivery”. Besides, the company loaded with the ballast of the megaavión Airbus A380, a project “dead”, according to the analyst, Leeham.

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