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Airbus Plans Internal Merger in Latest Corporate Shake-Up

September 30, 2016

Airbus is one company that could be hit.Photograph by Eric Cabanis—AFP/ Getty Images/ File

Airbus Group (AIRBUS-GROUP-N-V) said on Friday it would merge with its plane-making unit, strip out bureaucracy and simplify its brand, marking a break with its complex corporate roots as it prepares for tougher expected competition.

Europe’s largest aerospace group will be renamed “Airbus” after its core plane-making brand under the shake-up, the latest piece of corporate tinkering since it emerged from a cluster of French, German and Spanish aerospace interests in 2000.

Airbus confirmed the promotion of Fabrice Bregier to the new role of chief operating officer for the whole group, with overall responsibility for reshaping digital operations as well as for the global supply chain and quality.

He will continue to carry out his existing job in charge of the plane-making business, renamed Airbus Commercial Aircraft.

“We are bringing Team Airbus closer together, recognizing that our commercial aircraft division is by far the largest contributor to our company’s revenues and financials,” Chief Executive Tom Enders said in a statement.

See also: Airbus Plans Management Changes to Integrate Plane Division

The company curbed the influence of French and German governments in 2013 and adopted its best-known jetmaking brand a year later by renaming itself Airbus Group, but left in place an overlapping structure and confusion over which Airbus was which.

People familiar with the plans said earlier that this distinction would now disappear as the vehicle for the original merger, known as Airbus Group SAS, and the planemaker, Airbus SAS, merge into a single company based in Toulouse under a sole chief executive, German-born Enders.

Both are currently subsidiaries of the listed entity, Airbus Group SE, which is based in the Netherlands.

Enders has promised to bring new digital thinking into production, development and support to speed decision-making and prepare for future competition across the group’s products which range from aircraft to satellites and defense systems.

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He told staff in a letter last week the changes would result in consolidation and cost-reductions at the top of the company.

The heads of the company’s two other divisions, helicopters boss Guillaume Faury and defense and space chief Dirk Hoke, are expected to carry out additional group-wide roles to help drive through Enders’ so-called “digital transformation” project.

The company said these units would benefit from reduced costs due to the internal merger, which will take effect in January. It did not provide any financial details.