EADS changes name to Airbus, raises jet order goal

Wed Jul 31, 2013 6:42am EDT
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By Tim Hepher and Cyril Altmeyer

PARIS (Reuters) - EADS EAD.PA will combine its defense and space units and take the name of its flagship brand Airbus, adopting a similar structure and style to arch-rival Boeing (BA.N: Quote) as it targets higher profits.

Nine months after abandoning attempts to merge with UK arms firm BAE Systems (BAES.L: Quote), Chief Executive Tom Enders confirmed decisions that would see civil jets remain a "growth engine" popular with investors, who pushed EADS shares to new highs.

Speaking after EADS also confirmed an increase in the Airbus order target and unveiled upbeat mid-year earnings, Enders did not rule out job cuts in the group's 45,000-strong defense and space operations, which will be based in Germany.

He said the reorganization would "take costs out, increase profitability and improve our market position".

In a further sign of potential job cuts, EADS warned the move could lead to restructuring charges later in the year.

However, it effectively deferred politically sensitive decisions until after German elections in September by promising to carry out a more detailed review in the second half.

"The German government will work closely (with EADS) during the upcoming restructuring process and will place great importance on Germany's interests as an industrial location," Economy Minister Philipp Roesler said.

EADS was formed in 2000 from a merger of French, German and Spanish assets that incorporated passenger jetmaker Airbus, founded three decades earlier and now a global rival to Boeing.   Continued...

An A380 aircraft is seen through a window with an Airbus logo during the EADS / Airbus 'New Year Press Conference' in Hamburg January 17, 2012. REUTERS/Morris Mac Matzen