While Airbus followers have been well aware of various management tensions together with other important issues and distractions have required major attention over the past two difficult years few will have anticipated such as radical shake up of Airbus management that has been unveiled this morning.
Out in February next year goes the current Chief Operating Officer, Fabrice Bregier and who is currently head of the commercial arm of Airbus. Perhaps the bigger shock though comes in the form of an announcement that Airbus CEO, Tom Enders will not after all be seeking re-election to the board when his term expires in April 2019.
Coming as all this does along with the upcoming retirement of Airbus super-salesman John Leahy after twenty years of huge success in that very important role, there is bound to be real concern amongst the investment community that come April, the Airbus board might well find itself to be somewhat lacking in the kind of gravitas and necessary skills that have been the driving force behind its growth and very many achievements.
We will have to wait and see what happens next but leaving other reasons aside, a reference to the turmoil caused in the wake of corruption allegations made against Airbus and suggestions perhaps that a deferred prosecution agreement might soon follow, when attempting to reason dramatic top management changes announced by Airbus today, allow me to remind that this is far from being first time that significant management spats related to differing styles and approach of a German and a French management have been exposed at Airbus.
Think back twelve and thirteen years ago when Gustav Humbert was appointed as Airbus CEO and President in June 2005 and of how he struggled to bring an end to months if not years of squabbling over management style and approach that might keep his then predominantly French and German Government stakeholders content. No easy task and he lasted little over a year. His successor, Christian Streiff lasted little more than 100 days before he was sacked by the EADS parent company board. Go further back if you like and look to Gustav Humbert’s predecessor, the Frenchman, Noel Forgeard whose love of controlling everyone and everything that moved in Airbus left a trail of havoc in its wake for Humbert and later, Tom Enders to sort out. That Forgeard overplayed his hand not just within Airbus but also with his French backers would lead to his inevitable fall from grace.
Now, as I do not know Fabrice Bregier I can make little comment in relation to his abilities and neither can I comment further in relation to the corruption allegations against Airbus or of how and if any of the management changes announced today may be related in part to settlement of these issues until and if anything further announced.
What I can say though is that Tom Enders, who I have had the great pleasure of knowing personally throughout his long period at Airbus, whether this had been as Head of Defence at EADS/Airbus, Head of Airbus Commercial and today, as CEO of Airbus Group, has achieved great successes at the company and done, in my view, a formidable job not just in ensuring Airbus continued success but also, in laying down the very strong foundations for the future.
Enders may not have had all the different enduring and risk based qualities that say Jean Pierson who I also knew well and who was the founding father, Managing Director and later President of what was then Airbus Industrie had, but in respect of being placed amongst those who not just laid the groundwork for continued commercial success and also made things happen he comes a very close second.
As to the future, all we know is that Guillaume Faury, currently chief executive of Airbus Helicopters, is to succeed Fabrice Bregier as president of the main commercial aircraft division and that the Airbus Board will now start looking for a successor to Enders. M. Bregier had of course long been seen as the probably natural heir to Tom Enders but my guess is that board tensions and the burden of finding solutions have ensured that this was not going to happen.
In finishing and in relation to the above points, be under no illusion that Airbus has some very bright and powerful people on board who could easily make it to the very top. Tom Williams, the current COO of Airbus Commercial is a perfect example of that and he could well be in line for promotion. Alternatively, Airbus could decide to break with tradition and look outside for a new CEO. They would certainly be right to look of course but that said, I am not sure that the investment community is in any mood to see the company take risks.
Top of the priority list will be for Ender’s successor to bring stability and harmony back to the board and restore necessary confidence internally within Airbus and externally across the various stakeholders. Important too is that Airbus customers are able to see consistency and that they are reassured by those with whom they will in future be dealing.
I very much that both Tom Enders and John Leahy will be departing Airbus soon and I am bound to wonder whether, although his successor has been announced in the form of Eric Schulz who will be joining the company from Rolls-Royce, I am bound to wonder whether for consistency purposes persuading John Leahy to remain with the company for another year might serve some useful purpose?
CHW (London – 15th December 2017)
Howard Wheeldon FRAeS
Wheeldon Strategic Advisory Ltd,
M: +44 7710 779785