UPDATE 2-EADS defence shake-up hands A400M to Airbus * To merge military airlifter, tanker projects into Airbus
* Astrium and Defence to coordinate but stay separate
By Matthias Blamont
PARIS, Dec 16 (Reuters) - European aerospace group EADS (EAD.PA: Quote, Profile, Research, Stock Buzz) announced on Tuesday plans to merge its military transport assets into its Airbus civil planemaker unit in a move that will bring its troubled A400M programme under one roof.
The world's second-largest aerospace group, after Boeing (BA.N: Quote, Profile, Research, Stock Buzz), also said it would also bring its satellite and defence divisions, which respectively handle top strategic projects for France and Germany, closer together, but without merging them.
The 20 billion euro ($27.33 billion) A400M military airlifter project is running an estimated 18 to 24 months late, leading to friction between EADS, its consortium of engine makers and European governments, some of which are demanding penalties be applied to EADS.
The delays have caused 1.7 billion euros in EADS provisions so far and have also drawn away engineering resources from Airbus as it embarks on its next plane project, the A350 jetliner.
The building of the A400M has previously been managed by EADS's Spanish-based military transport division, and the head of Toulouse-based Airbus, Tom Enders, has not, until now, had direct control of the delayed project.
EADS said the organisational changes will see its Military Transport Aircraft Division (MTAD) be integrated into Airbus, to become its military wing under the name of Airbus Military.
It will operate the A400M final assembly line in Spain and be in charge of all Airbus military derivatives, including efforts to win a potential deal worth $35 billion to sell air refueling tankers to the United States.
The contract was awarded to EADS and U.S. partner Northrop Grumman (NOC.N: Quote, Profile, Research, Stock Buzz) earlier this year, but was subsequently cancelled following an appeal by rival Boeing (BA.N: Quote, Profile, Research, Stock Buzz).
Current MTAD chief Carlos Suarez will head Airbus Military and report to Enders, but will remain a member of the EADS executive committee, the company said in a statement.
SENSITIVITIES
In carefully balanced moves, EADS said it would establish coordination between its EADS Astrium and EADS Defence & Security divisions, but they would remain separate units of the group.
Source and full story
http://www.reuters.com/article/mergersNews/idUSLG17350320081216
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