Nov. 26, 2018, © Leeham News: With the naming of CFO and COO officers-in-waiting, Airbus Group has completed the extreme makeover of its executive ranks.
The full transition won’t be complete until April. It’s widely been reported that these changes, including retirements and pushing out people who were not yet near retirement age, was a necessary step to settle fraud and corruption investigations undertaken by England, France, Germany and even the United States.
The latest appointments, announced last week, are for the successors of CFO Harald Wilhelm and Airbus Commercial COO Tom Williams. Dominik Asam, 49, replaces the 52 year old Wilhelm in April. Michael Schöllhorn, 53, replaces the 66 year old Williams Feb. 1.
Airbus Group CEO Tom Enders, 60, retires in April. His successor is Guillaume Faury, who succeeded Group president Fabrice Bregier last year. Bregier lost a power struggled with Enders and had hoped to succeed him. Faury was previously president of Airbus Helicopters.
John Leahy, now 68, retired from his position as COO-Customers in January. Health issues had long been a problem for Leahy and at the IATA AGM in Cancun the year before, he told reporters that his doctor and his wife said it was time for him to retire.
His deputy, Kiran Rao, was named to replace him. But the board of directors, responding to the corruption and fraud investigations, decided the position should go to an outsider—even though the broad internal investigation by Airbus lawyers determined Rao had nothing to do with any improprieties.
Enders’ preferred candidate after Rao’s disqualification was Christian Scherer, then president of ATR and before that a long-time Airbus executive. But because of the demand for an outsider, Eric Schulz of Rolls-Royce was brought in.
He lasted less than a year. He, too, lost a power struggle (this one with Faury and Enders). This time, Enders named Scherer.
Williams, whose focus was production and program development, was overdue for retirement. He was asked to stay on past his planned retirement age to help work through delivery delay issues this year.
Didier Evrard, EVP Programs, also is past his planned retirement. Like Williams, he was asked to stay on due to current delivery challenges. A new retirement date hasn’t been announced but is expected next year.
A host of other executives below the C-level previously left the company, some through retirement, some caught up in the investigations.
Clearing the decks was deemed necessary by the board because of the investigations, but some were unfairly caught up. Rao was one of them. Scherer was unfairly blocked, initially. Wilhelm’s departure is really unfair—he blew the whistle in the first place that started the probes.
Enders, in my view, also is unfairly caught up in this. He’s aggressively sought to clean up the improprieties. But, as CEO, the buck stops with his desk.
Enders has done more to make Airbus a true commercial enterprise than anyone else. He’s reduced the French and German government influence on the board of directors. He openly fought with the German government over his failed attempt to acquire BAE Systems. Enders has been vocal over the years about his criticisms of government influence on Airbus.
I can’t help but wonder if this [forced departure] is payback for all this.
I think next year will continue to be a year of some turmoil for Airbus.
Because the executive ranks transition won’t be complete until April, more retirements are coming and because new execs invariably like to bring in their own teams, I think uncertainty will continue.
Airbus said it will still be another year before the engine delivery issues for the A320neo will be caught up. (Pratt & Whitney and CFM continue to run late.) Rolls-Royce is late on engines for the A330neo.
I don’t look for real stability at Airbus until 2020.