Diving in

First there was the ambitious proposed merger of EADS with BAE Systems to have created a defence and aerospace giant to rival Boeing.

When that deal fell apart due to political opposition, particularly from German Chancellor Angela Merkel, Enders has been focusing his not inconsiderable energies on the restructuring of EADS which will see the company and its divisions assume the name of its largest and most famous subsidiary – Airbus.

Clearly Enders is not afraid of taking on a challenge, and indeed, taking on some degree of risk, albeit in a carefully managed environment. Perhaps that is why he still continues to enjoy skydiving, 35 years after he left the German army? “I don’t know if it [skydiving] says anything about me,” Enders says.

“It says very little. It’s fun, and it’s no longer as risky as it was in the olden days. So I just like to do it. ” So much so that shortly after arriving in Australia he and chief of EADS local subsidiary Australian Aerospace (and former offsider) Jens Goennemann skydived out of the back of a HARS Caribou.

Enders describes skydiving as “controlled risk”, and controlled risk seems to underpin his philosophy in managing and reshaping EADS.

“My mandate is not to administer the company but to bring it forwards, to develop it, so why should I be afraid of taking risks? All the more so because they’re not life and death risks. And I get very well paid for it. ” He certainly has the bio and the experience to measure that risk and pursue the strategies he has set for EADS, particularly since it is in fact his second time in the role. Enders came to the EADS top job after his successful stewardship of Airbus, where he righted the ship after a time of relative turmoil including a single-minded pursuit of marketshare, delays and production issues with the A380 and the on-again-off-again troubled birth of the original A350.

Today, Airbus, while now under Fabrice Bregier has successfully launched the A320neo, is booking 1,000 orders a year, has opened or is opening production facilities in China and the US, and has begun to test fly the A350XWB on schedule and with little fanfare.

Before running Airbus, Enders was in the unique position of being co- CEO of EADS, alongside Louis Gallois (“

It’s more fun to be the only CEO of EADS,” he quips. ) After his time in the army, studying (including in the US) and working for the German defence minister, he joined the aerospace industry in 1991 working for MBB, working his way through MBB and subsequently DASA to become CEO of EADS Defence and Security Systems Division on EADS’s formation in 2000.

It’s more fun to be the only CEO of EADS!

So he understands EADS from the inside, and understands all too well the political environment and artificial constraints EADS has had to work under. But, as the attempted BAE merger and current rebranding and restructure shows, EADS can now operate like a conventional company, rather than one trying to placate different European government masters.

Says Enders: “It’s a normal company. It has a board. There’s no government representation whatsoever; 12 independent directors; six different passports. I’m particularly proud of that because you look around at our peers, there’s nobody… there’s no Boeing or Lockheed or Northrop, whatever, BAE, with six different passports. So it’s a really very strong signal of internationalisation. ” That internationalisation couldn’t stretch quite so far as to merge with BAE (which while British-based has significant US – and indeed Australian – operations). But Enders hasn’t stood still since that setback.

“I think that was the right thing to bring the company forward. I mean, you have to reckon that this was… in retrospect we can say that very clearly… the last try to implement the old strategy. That was the strategy to balance Airbus, build a stronger defence business. I think in many aspects it would have made sense. ” Continues Enders: “But it was politically unfeasible. And Ian King, my partner in crime at BAE and I always said that we saw that as an opportunity, not a necessity for either BAE or for EADS. And you know that the aftermath of the merger project demonstrated that. Their (share) price has come up; not as much as ours, but ours has gone up even more.

We were able to pull off a new governance which, to make a long, long story short, would not have been possible without the merger project. ” Subsequently, Enders has focused on restructuring EADS, in part with an eye to a world of low defence spending particularly in its home European market, and in part to more tightly integrate the sometimes disparate segments of the company, following the abandonment in March of a Franco-German power sharing agreement over how the company was run, and the exit of major shareholder Daimler in April which means that nearly 75 per cent of the company’s shares are publicly traded, culminating in the July announcement that the company would be branded as Airbus.

From January 2014 the parent company will be known as Airbus Group.

Today’s Airbus will remain focused on commercial airliners, while Airbus Military (which builds the A400M and A330MRTT) merges with Cassidian and Astrium to become Airbus Defence & Space, and Eurocopter becomes Airbus Helicopters.

So what does the Airbus name mean, and why apply it across the whole company? “Well, it’s the single, best known, most valuable brand we have in the company. We are a collection of brands or company names today. I’ve said elsewhere it’s kind of a Babylonian confusion that we have. We have the group, the EADS, and we have Airbus, we have Eurocopter and we have Cassidian and we have Astrium. And then we have subsidiaries under them with even more different names,” Enders elaborates.

“Now very few groups in the industry, not just the aeronautic industry, would find that a preferable branding model, and in our case, it’s very easy.

We have one dominating brand and that is the Airbus brand. Everybody knows that worldwide. I’d like to give you examples that I experienced myself. When I was chief executive of Airbus you go to faraway places like Harbin in China at the Manchurian border. You go to Bangalore, you go to

We should leverage the strength of Airbus for the rest of the business.

other places. You talk to young engineers. Everybody is fascinated by the Airbus brand.

“So that’s really an international brand nowadays. It stands for aviation.

It stands for progress. And the EADS name has always been a little bit artificial, and particularly starting with the E. We’re becoming a more and more international company reaching far beyond Europe. ” Enders says the rebranding “was not a new idea at all”, explaining: “We discussed that even 12 years ago shortly after the creation of EADS whether we… shouldn’t we change the name into Airbus, but it was never quite the right time. Somebody was always against it; political and other considerations. And now is the time to go for it. ” Enders says reaction to the name change has been “very positive”.

“Most people would say internally and externally it’s a logical thing to do because the preponderance of the Airbus commercial aircraft business is so strong inside the group it’s almost 70 per cent. . . 66 per cent to 70 per cent. . .

it’s not like it’s just a minor activity. And in the past, we kind of treated the various divisions like they were all the same, the conclusion for me to draw after my years as chief executive of Airbus was to say no, they’re not.

There’s one that is really, say, dominating the rest, and we should not be shy to admit it and not always talk about we need to balance Airbus. We should leverage the strength of Airbus for the rest of the business. And that is what we’re doing now and the rebranding and the renaming is obviously just a conclusion of the strategy review we’ve done earlier this year. ” A little less clear is what the rebranding means for EADS’s activities in Australia, particularly for Australian Aerospace.

“In general terms, we’ll rebrand the whole world, but we will take care as much as necessary of local or national specifics. And we are discussingthat these days how important is the presence of Australian Aerospace.

For instance, should we establish a legal body that says Airbus Australia Pacific, or whatever? Obviously . . . Australian Aerospace will be the main industrial footprint of all this.

“This is in flux right now, but there’s no one size fits all. What I want to do in general, for the most important markets at least, and we count Australia among them, is what I call the one-roof principle. It’s that, okay, the group is represented if possible under one legal roof, but more importantly is that people work together as closely as possible. Only then you can realise the synergies. And what we definitely will want to do is to use Australian Aerospace as a basis for growing further the defence business. ” He continues: “We want to see where we can leverage the footprint, the strength, the experience of Australian Aerospace and EADS. . . . So that we will definitely do, but what the name exactly will be we don’t… not right to name me on that one. ” But, says Enders, “it will be Airbus”.

Beyond the restructure and rebranding, Enders names program execution as one of his key objectives for the company.

“The challenge for the company, for the entire group, I think, as boring as it sounds, is execution. We have a huge order backlog, particularly in commercial aviation at Airbus. We have a sizeable order backlog still in the non-Airbus businesses. But … what was a problem for the group in recent years was that we didn’t execute flawlessly on the important projects.

“Now I think performance has much improved, but nevertheless, we had a lot of challenges out there. And if I look at the share price today, part of that reflects already the trust of investors that we will be executing the programs that we have on the table right now much better than in the past. So it’s a huge obligation for us to increase performance. And the internal programs, they’ve been doing a huge program on cross-divisional program management improvement in recent years, and now look at the quality initiative that also goes across all activities and other things, exactly reflects that.

So what is Ender’s biggest headache at the moment? “Biggest headache? Well, it comes with the performance challenges. I mean, as we’ll see, you know, it’s your job to know not only what goes well but also what could potentially go wrong, and there’s a lot of things in the big group on the commercial side, on the military side… On the commercial side it’s pretty obvious. It’s the A350 problem. I wouldn’t want to say it causes me headaches, but it’s certainly still a huge challenge for the company. We’ve taken a lot of lessons from the 380 program; frankly also a lot of lessons from the 787.

“But still, we know these programs are very complex and even for the first phase of a test program, the flight testing is going very well. We had the second aircraft taking to the skies yesterday on time, or even a couple of days before. But we are not over the top here. This is a test program that comes with a ramp-up from production . . . where we stumbled on the A380, so hopefully we’re better this time around, I’m sure. But a lot of challenges come with this program. ” A400M is another priority. “But again, that is just at the start of the delivery process; plenty of things can happen, particularly with customers who are a little bit short of money. ” Says Enders, “We need to find export customers and we need to find them rather soon. ”Enders also nominates running the company on a purely commercial footing as one of his challenges.

“Because the shareholder structure has changed we are no longer protected. That was the other side of the coin of being more or less a joint venture between Daimler and the Lagardere/French government group. We have more than 70 per cent free float now. These investors invest in us because they trust that we make our commitments, that we will deliver profitability increases. . . And that is in a sense a bit of a new environment for many inside the company as well. ” Clearly, then, Enders has rolled up his sleeves and is effecting big change at EADS.

“Now what we have decided recently to get away from is the artificial [commercial-military] balance thing and … to accept the strength of Airbus, leverage Airbus; accept that it is a good thing that we are so strong in commercial.

“So think about it the other way round. If we had 20 per cent commercial and 80 per cent defence business we’d be really challenged. So thank God this is not the case. We know that commercial business, we look at our focus, the focus of our competitors and suppliers for the next 20 years out and more, we’ll still be growing roughly five per cent; different regions more, some regions less; five per cent on average air traffic. And we will certainly benefit from that even if new competitors are coming out.

“So the final thing, there’s renaming. As I said, it’s not a strategy. It’s a result of a strategy. However, renaming will certainly have a positive integration effect for the entire group. You can imagine if you lead a group with five different brands and names, I always [found] this [attitude] over the years, ‘we can’t do this, sorry, because we’re EADS, you’re Airbus, and we are Astrium and you are Cassidian’ and all that crap. In a company where everybody has the same email letters, and everybody is an Airbus employee, you will certainly have a positive effect in many ways for the integration of the company.