Airbus Gets a New Boss, Who Inherits All of the Old Problems
(Bloomberg) -- Airbus SE has selected its next chief executive officer. Cue in Guillaume Faury, former head of the aircraft manufacturer’s helicopter division and of research at carmaker Peugeot SA -- and now a clean-up guy with a lot on his plate.
Here are five critical do-list items that the new CEO will need to address when he takes over from Tom Enders in April:
Bribery and Middlemen
Priority one is navigating a series of investigations by fraud agencies in the U.K., France and Austria into the use of middlemen to secure sales. Faury, 50, will need to draw a line under the probe, picking up from Enders, whose last few years have been defined by efforts to restructure how the group does business. That has already led to a number of top executives exiting the group, and along with older veterans overdue for retirement, the new CEO needs to get his management team on a secure footing.
Amid the bribery probes, Airbus has also had to find a suitable replacement for John Leahy, who spent decades at the helm of commercial aircraft sales before retiring at the start of this year. Airbus’s first appointment, outsider Eric Schulz, failed with the executive stepping down after less than nine months in the role. Now it’s up to Faury and new Chief Commercial Officer Christian Scherer to prop up a sales team whose morale is in flux.
In his last act, Leahy managed to secure a program-saving deal for the A380 doubledecker, a $16 billion order for up to 36 planes. The win was significant, because it could lead to further orders, giving potential customers more confidence that the aircraft would be around for the foreseeable future. Additional sales haven’t materialized and the Emirates deal itself has hit a wall, with talks stalled, as Bloomberg News reported on Monday. Airbus has stretched the order book by reducing planned production to six a year from 15. Faury could be forced to make the final decision on whether to scrap the program.
Airbus hit it out of the park with its re-engined A320neo, taking on Boeing Co.’s 737Max to command more than half the market for single-aisle aircraft. But persistent design problems with the next-generation turbine manufactured by Pratt & Whitney have held back deliveries, while supply chain delays have slowed production of versions powered by CFM International LEAP model. The setbacks have frustrated what should be a clean-cut driver of profit. It’s essential that Faury can put them in order quickly while keeping restless customers at bay.
The U.K. is leaving the European Union, and with it comes the risk of major disruption to Airbus’s operations just as Faury takes over the reigns. Airbus has already warned that it could divert future investment away from its wing factory in Broughton, Wales, and the company is stockpiling parts to avoid major fallout. Enders has been one of the most outspoken executives leading the charge for a softer Brexit that is manufacturing-friendly, and it’s a mantle that he’d pass to Faury just as after the split is scheduled to go through.
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