Airbus Names New U.S. Chief: Allan McArtor Succeeds Sean O'Keefe, Who Will Resign in March

The Wall Street Journal

By Doug Cameron

Updated Jan. 7, 2014 5:51 p.m. ET

Airbus Group NV's newly appointed U.S. chief outlined plans to continue expanding in the country beyond its soon-to-open commercial jet factory, but said the European company is no longer focusing on acquisitions to increase its scale.

The world's second-largest aerospace-and-defense company on Tuesday said Allan McArtor will become chairman and chief executive of its U.S. unit, Airbus Group Inc., in March following the retirement for medical reasons of Sean O'Keefe, who has led the business since 2009.

Mr. McArtor, 72, joined Airbus in 2001 and is currently chairman of its U.S. commercial arm, spearheading the development of a new factory in Mobile, Ala. that's due to start delivering A320 passenger jets in the first half of 2016.

Airbus has succeeded in breaking the monopoly of larger rival Boeing Co. in selling jets to some of the biggest U.S. airlines, but has struggled to make similar gains in the defense market. Airbus, for example, lost out to Boeing in a hotly-disputed contest for a multibillion-dollar contract to build aerial refueling tankers for the U.S. Air Force.

Mr. McArtor in an interview singled out potential for growth in areas of the U.S. defense and space sectors such as unmanned aerial sensors, low-cost space launch systems and satellites and missiles technology. But he said Airbus has decided to steer away from deal-making to bolster its U.S. presence at a time when bulging jet order books have pushed up valuations, particularly in commercial aerospace.

"We had thought mergers and acquisitions would be a quick way to move forward," said Mr. McArtor, adding that it was no longer a "top priority."

Airbus this year shed its former corporate name European Aeronautic Defence and Space Co. NV. Mr. McArtor, a former combat pilot and head of the Federal Aviation Administration, said the rebranding "makes our story easier to tell [in the U.S.]," while the new Mobile factory provides opportunities to leverage its commercial operations into other business lines.

Excluding commercial jet sales, Airbus generated revenue of around $1.4 billion in the U.S. last year, through sales of military and civilian helicopters, space equipment, and service contracts that include running 911 call centers for New York and other major cities.

Mr. McArtor's promotion comes amid a restructuring of Airbus that includes the grouping of its defense and space units into a single organization, alongside the company's commercial jet and helicopter production.

The loss of the aerial tanker deal to Boeing has placed more emphasis on the fortunes of selling more of its U.S.-built Lakota helicopters to the U.S. Army and Air Force, though Pentagon budget cuts have reduced the potential for the military to replace hundreds of Vietnam-era aircraft.

"I'm reasonably optimistic that the Lakota program will continue," Mr. McArtor said, though he admitted the fate of the Army's armed aerial scout replacement plan would be decided by budget priorities.

The new commercial jet assembly line in Mobile will join existing Airbus plants in France, Germany and China. Mr. McArtor said the plant would move as quickly as possible to its initial production rate of four planes a month, with any increase dictated by market conditions.

Mr. McArtor will also become a member of the Airbus group executive committee, the company's new, top decision-making body.

He takes over from Mr. O'Keefe, 57, who is stepping down to focus on continuing treatment for injuries sustained in a plane crash in 2010 that killed five people, including former Alaska Sen. Ted Stevens.

—Marietta Cauchi contributed to this article

Source:  http://online.wsj.com