Airbus puts helicopters chief in line for top job in shake-up

London

AIRBUS SE put the head of its helicopters unit in line to replace chief executive officer Tom Enders after a wide-ranging management shake-up, as the European planemaker seeks to move past corruption allegations and inject fresh blood into its leadership ranks.

Mr Enders planned to step down when his term ends in April 2019, the Toulouse, France-based company said on Friday in a statement. His No 2, chief operating officer Fabrice Bregier will leave in February after missing out on the CEO job.

Guillaume Faury will take over Mr Bregier's role as head of the commercial plane building unit, giving him a clear path to take over the top role when Mr Enders, who turns 59 next week, retires. However, the board held back from officially anointing the Frenchman as heir apparent, and gave itself manoeuvring room by launching a search for the next CEO.

Mr Faury, a decade younger than Mr Enders, provides much-needed continuity at Airbus while also bringing the perspective of an executive who has spent time away from the company. He held management positions at the chopper division, previously known as Eurocopter, for a decade before leaving in 2008 to join French carmaker Peugeot SA. He returned to Airbus and began running the unit in 2013.

"Guillaume represents our next generation of leaders and has demonstrated broad business and industry experience, an international mindset and a clear focus on delivering value," Mr Enders said in the statement. "It's been a long and exciting journey but now is the time to initiate a leadership change."

The shake-up is being carried out amid ongoing bribery investigations related to the use of middlemen in military and commercial airplane sales. Mr Enders has warned that the probes may lead to "significant penalties" and has been trying to convince investigators in France and the UK that Airbus is serious about reining in improprieties as it works to get past the controversy.

The changes mark the biggest management overhaul since Airbus, then known as European Aeronautic, Defence & Space Co, moved to a single CEO structure a decade ago, after previously having two chiefs, one French, one German.

Letting the succession drag was not an option for the board. As well as contending with the corruption claims, the company is pondering whether to scrap its flagship A380 superjumbo model amid sluggish demand. Germany and France remain major investors in the planemaker, and the top two jobs normally rotate between nationals of the two countries.

Mr Faury, 49, started his professional career at France's DGA defence procurement agency, overseeing flight tests of the Tiger chopper model. At Peugeot, he served in a top research and development role and as a member of the managing board.

While he will take over the commercial planes group, Mr Faury did not get Mr Bregier's COO title. A decision about the role will be made after Mr Bregier's departure, according to a person familiar with the matter who asked not to be named discussing non-public deliberations.

Internal and external candidates for the CEO role will be considered during the course of next year with the aim of announcing a successor for confirmation at the 2019 annual shareholder meeting, the company said.

Airbus, which employs, 134,000 people, is due to hold its 2018 meeting in April after reporting full-year earnings on Feb 15, when it may provide an update on the bribery claims. Kepler Cheuvreux said on Wednesday that its target price for the stock assumes a penalty provision of 2.5 billion euros (S$4 billion).

Mr Bregier was told earlier this year that he would not get the top job and has been looking for other opportunities since, people familiar with the matter said. The 56-year-old Frenchman had been the favourite to replace Mr Enders, who is German.

However, Mr Bregier oversees one of the businesses that has been caught up in the probes of alleged corruption related to the use of middlemen in aircraft sales. While the company has been successful, there has been friction at the top, especially after Mr Enders diluted Mr Bregier's role by taking control of the sales operation earlier this year.

The board said that it was "confident we have taken the right decisions", and that it fully supports Mr Enders.

Mr Enders acknowledged the friction in a memo to employees, saying that he and Mr Bregier have had "a few differences over the years". In the statement, Mr Enders sought to smooth over any divisions. "I understand Fabrice's decision and his motives and, frankly, I would not have done differently," he said. "Many of the achievements this company can be proud of over the past decade were led by Fabrice and me, together."

Mr Enders rose through the ranks at Airbus and was appointed chief after previously running the commercial planemaking unit - the usual springboard to the top job. His record as CEO has been mixed.

Shares of airbus were little changed at 85.29 euros at 11.16 am in Paris. The stock has advanced 36 per cent this year.

Airbus has already seen a partial overhaul of its senior management ranks. Marwan Lahoud, its head of strategy, departed last year, while John Leahy, the head of sales and a fixture at the company for decades, announced his decision to retire a few weeks ago. Airbus picked an external candidate, Eric Schulz from Rolls-Royce Holdings plc, to succeed Mr Leahy, highlighting how the company is keen to inject new blood. BLOOMBERG

Guillaume Faury, a decade younger than Tom Enders, provides much-needed continuity at Airbus while also bringing the perspective of an executive who has spent time away from the company.