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EADS FORMS NEW DEFENCE & SECURITY DIVISION

11 Apr 03. EADS is integrating and strengthening its defence and security business by realigning its defence electronics, military aircraft and telecommunications activities. The company announced on Friday that the new division will be headed by Tom Enders (44) and named EADS Defence & Security Systems. The division will continue to be headquartered in Munich.

Commenting on this important development, EADS CEOs Philippe Camus and Rainer Hertrich said, “EADS Defence & Security will build upon our formidable strengths as a truly global defence systems powerhouse. Growing our capabilities and business revenues in defence is a core strategic priority for the group. A full integration of our operations and offering within one division will move us substantially towards this goal. With Tom Enders at the helm, we have every confidence that the new division will be a driver of change in transformational defence technology and systems.”

Looking to increase its role as a leading prime contractor in defence and security initiatives globally, the new EADS Defence & Security division will enable EADS to offer customers and shareholders alike, greater scope and value.

“Customers are increasingly looking for innovative and integrated systems solutions to pursue their various transformation efforts. We are meeting those requirements with a leading-edge stronger industrial organisation,” Tom Enders said. “In particular, EADS Defence & Security Systems will increase our position and product offering in the areas of manned and unmanned mission systems, air defence systems, information, telecommunications and command and control systems, as well as new, network-enabling capabilities.”

With €5bn in revenue and 24,000 employees in nine different countries, EADS Defence & Security will incorporate the following business lines: Missile Systems; Military Aircraft; Sensors and Electronics; Defence and Information Systems; Services. Through the merger of the current business units Telecom and S&DE, EADS is creating a fully-fledged “system house” comprising the entire C4ISR chain, air defence systems and secure telecommunications systems as well as future large systems integration capabilities. The Division will also include a new concept development, simulation and experimentation entity to develop innovative systems solutions.

The EADS CEOs have tasked Tom Enders to develop in detail the structures and organisation for the Defence & Security Division. His focus will be on integrated, cross-business unit products and market approaches. The new organisation structure will be submitted for EADS Board approval at the end of May.

Comment: The formation of this new division will further focus EADS’s defence activities and enable the group to drive forward looking for new acquisitions. As BATTLESPACE as stated before, the wish by Dr Stefan Zoller to build a $3bn systems segment in three years has been hampered by a decline in European defence spend and lack of takeover opportunities. The company is believed to have expressed a strong interest in Marconi but was pipped at the post by Finmeccanica, which is rapidly establishing itself as a force to be recognised with in world markets. It is not clear whether the Cogent business is included in the new set-up.

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