CHRISTINA MACKENZIE / PARIS

Move aimed at building new division's defence activities and increasing customer focus

EADS Defence & Security Systems chief executive Tom Enders has been tasked with bringing about an increase in the new division's revenues by 10% a year when it becomes operational on 1 July.

Aimed at strengthening the group's defence activities and improving customer focus, the unit will combine EADS's missile, defence electronics and military aircraft businesses. EADS says the integration of military aircraft into the new business unit "will have a major impact on the development of future Eurofighter enhancements" and on new programmes such as unmanned combat air vehicles and net-centric warfare projects.

"We have identified some very promising efficiency improvement areas," says Enders. "We will optimise our market position, eliminate overlaps, bundle specific functions, accelerate our decision-taking and cut costs."

Enders will have overall responsibility for five divisions:

Missiles, composed of MBDA, owned by BAE Systems, EADS and Finmeccanica headed by Marwan Lahoud; and EADS LFK, managed by Werner Kaltenegger. The two missile houses have annual revenues of about €1.6 billion ($1.9 billion) and 6,400 staff; Military Aircraft, managed by Aloysius Rauen, with revenues of €1.6 billion and 7,800 staff; Defence & Communication Systems, headed by Stefan Zoller with revenues of about €1.2 billion and 5,500 staff; Defence Electronics, headed by Johan Heitzmann, with revenues of about €600 million and 3,400 staff; Services, managed by Jacques Vannier, with revenues of about €200 million and 800 staff.

The new Munich-based unit will boast almost 24,000 employees in nine countries and will generate revenues of more than €5 billion in 2003, mainly in the French, German, Spanish and UK markets. EADS expects total defence revenues to "largely exceed" €6 billion in 2003.

European Union regulators last week approved EADS's purchase of BAE Systems' 27.5% stake in space company Astrium. The deal gives EADS complete ownership of Astrium, but the EU says it will not significantly affect competition in the sector. EADS will not pay BAE for the stake, but will invest €84 million in Astrium before the transfer.

Source: Flight International