Restructuring European aerospace
Enders justifying means
The effort to run EADS like an ordinary company
ARNAUD MONTEBOURG must look back on September 16th with a certain wry amusement.
That was the day the French industry minister visited Elancourt, west ofParis, where the defence arm of European Aeronautic Defence & Space conducts research on cyber-security.
The government had just publicly identified the sector as one that could propel Franceto a new industrial future, and Mr Montebourg waxed lyrical on site.
Then on December 9th EADS announced that it was cutting 5,800 jobs acrossEuropeas part of a reorganisation of its defence and space activities.
In the past such an announcement would have set off a barrage of accusations, and not only from the firm's workforce.
Relations among the company's main government shareholders—FranceandGermany—have long been strained.
Those between Tom Enders, the chief executive of EADS, and Angela Merkel,Germany's chancellor, are no better.
It was Mrs Merkel who stopped a proposed merger last year between EADS and BAE Systems, a British defence firm.
Mr Enders saw the deal as a way to win EADS a seat at the top table in the defence business.
Mrs Merkel thought it would reduce German influence over EADS and shift jobs out ofGermany.
The merger was abandoned amid bitter recriminations, leaving Mr Enders determined to transform EADS into a normal commercial company focused on the profitability of its businesses rather than the nationality of its workers.
That the mudslinging this time has been relatively restrained is a sign of how far EADS has travelled down that road.
The German economics ministry asked that the cuts do not bear down disproportionately on its country, where most of the defence operations are based.
Mr Montebourg thought it unacceptable that a profitable company with a bulging order book and state support had to cut jobs.
Neither government looks likely to intervene.Francenow owns just 12% of the company,Germanyless than 11% and neither now has a veto over management decisions.
Both can see that, however successful EADS is these days in commercial aviation, it is too small, too cost-heavy and too Eurocentric to compete globally for defence and space business, especially at a time when developed countries are cutting their budgets.
The job losses are part of a bigger reorganisation to reflect this reality.
Next year EADS's four operating units will come down to three, as its existing defence and space outfits—Cassidian, Astrium and Airbus Military—are merged into Airbus DS.
EADS itself will take its name from its best-known brand, becoming Airbus Group.
No longer will the role of chief executive alternate between French and German bosses: Mr Enders will keep the job as long as the board wants him to remain.
What of the research into cyber-security that Mr Montebourg ventured out to see one September morning?
That, the company says, is here to stay.
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