Job cuts loom as EADS changes name to Airbus
By Tim Hepher and Cyril Altmeyer
PARIS (Reuters) - EADS EAD.PA will take the name of its flagship brand Airbus and target higher profits by combining defense and space units, Europe's top aerospace group confirmed on Wednesday, in a move that could involve job cuts.
Nine months after bowing to political opposition to his attempt to merge with UK arms firm BAE Systems (BAES.L: Quote), Chief Executive Tom Enders declared civil jets the main "growth engine" for EADS investors, who pushed shares to new highs.
After unveiling a strong batch of commercial earnings that included a rise in Airbus order targets, Enders did not rule out job cuts in the group's 45,000-strong defense and space operations, which will be based in Germany.
"It (the reorganization) means some real restructuring, but we are forced to do it: the defense business is ... shrinking in Europe," he said.
The company warned the move could lead to restructuring charges later in the year - a standard sign of layoffs ahead. But it also deferred politically sensitive decisions until after German elections in September by promising a detailed review.
The changes will come into affect starting from January 1, allowing time for what could be lengthy talks with unions.
"To keep the company economically successful, the restructuring must take place in a socially acceptable way," Ruediger Luetjen, head of the company's European works council and a representative of trade union IG Metall, told Reuters.