Friday, December 15, 2017

Airbus Has Trouble in the Cockpit: Management shuffle creates uncertainty around the company’s ability to deliver its mammoth backlog of airplane orders

Airbus Chief Executive Tom Enders speaks at Airbus's delivery center in Colomiers, near Toulouse, on January 13. 

The Wall Street Journal
By Alex Frangos
Dec. 15, 2017 8:43 a.m. ET

The investment case for airplane giant Airbus is simple: It has nine years’ worth of aircraft orders to fulfill; all it has to do is execute.

The trouble is, the people meant to execute it are leaving. And the people replacing them are either not identified or unproven. The turmoil is leaving Airbus shareholders once again in arch-rival Boeing’s slipstream.

Most significantly, Airbus said Friday that Fabrice Brégier, who heads the commercial aircraft division, is leaving the company. Once seen as a possible future chief executive, he is credited with overseeing the mostly snafu-free development of the long-haul A350 and for ensuring Airbus has kept pace on producing the wildly popular A320neo.

His boss, Tom Enders, has also agreed to leave at the end of his current term in 2019. A search has started for his replacement, with no obvious internal candidates. Corruption investigations into past Airbus sales practices are seen as a pretext for the shuffle, though some of these issues had already been acknowledged by the company. Mr. Enders was among several Airbus employees being investigated in Austria over fighter-jet sales. Airbus has said the allegations were unsubstantiated.

It’s also possible the two executives, who together helped shape Airbus into a more commercial, rather than state-driven enterprise, had reached the end of what had at times been a competitive working relationship.

Stepping into Mr. Brégier’s shoes running the all-important commercial aircraft division is helicopters head Guillaume Faury. He may yet prove equally up to the task of churning out airplanes and mercilessly squeezing costs along the way. But his tenure in Airbus’s much-smaller helicopter division—which has faced an industrywide slump and crash issues that predate his tenure—hasn’t proven out those skills.

There’s still a good chance Airbus delivers on its promise to turn its 6,000-plus plane backlog into cash in a way that rewards shareholders. In the past six weeks, however, its stock has been moving sideways while Boeing’s keeps going higher. A protracted crew change may only slow things down.

Original article can be found here ➤

1 comment:

Anonymous said...

The guys at the top have nothing to do with whether Airbus (or Boeing) delivers on its backlog. It’s the worker bees that get the job done. I spent 34 years at Boeing and I know. The only thing the top execs could do to interfere with that is make some really dumb decision like laying off 35% of the workforce in the face of record deliveries. That’s probably not going to happen.