EADS: Defense and safety
Since 2000, the company EADS, born from the merger of three European giants of the electronics and aerospace industry, has been dominant on the world stage. Its activities are divided into five sectors. The one we will study is the Defense Department and Security Systems (DS). The DS department generates the second largest share of sales of EADS with 17% of the total turnover, which amounts to 5.4 billion euros. The department itself is divided into sections dealing from combat aircraft to high performance systems and network monitoring, communication, information and defense electronics, and missile systems as well.
Despite a very adverse environment related to the 2001 crisis, soaring oil prices and a reduction of the budget of Research and Development at the European level, EADS has showed moderate growth in all its activities, the 'Airbus' sector still single-handedly generates almost all the revenues recorded, with the success of its A380.
One strategy of the company is the acquisition of companies in the sector, enabling it to broaden its base and of course to acquire new lines of technologies and services; it also develops huge budgets in its departments of Research and Development, which allow it to be diversified and thus better suited to providing differentiated solutions according to each customer. Thanks to this unusual flexibility, EADS manages to satisfy customers and win new ones, thus establishing itself as a European leader, and currently aims to steal the number one spot for U.S. giants worldwide.
Today, the companies having high-tech products register substantial turnovers.
Among these companies, we find EADS, Electronic Aeronautic, Defense and Space company, which will be the subject of this study.
Born of a merger between three European giants of the electronics and aerospace in 2000, EADS is one of the protagonists in the world of high technology with five divisions:
- Airbus civil aviation
- Military Transport Technology
- Aerospace including Eurocopter, largest helicopter producer in the world.
- Department of Defense and Security Systems including MBDA, the world number two in the missile area.
- Spatial Domain with EADS Astrium for satellites
To understand the operation of EADS, we should gain a better understanding of its legal status.
EADS is a corporation under Dutch law (NV) listed on the exchanges of Frankfurt, Madrid and Paris. Over 34% of the shares are held by private investors. DaimlerChrysler and French holding company Sogeade (Lagardere, French state) each own just over 30%. The Spanish state holding company Sepi owns approximately 5.5% of the shares.
The headquarters of EADS integrated with functions of Strategy, Marketing and Legal Affairs are in Paris while that engaged in the functions of Finance, Purchasing and Communications are in Munich. Manfred Bischoff, a member of the Management Board of DaimlerChrysler AG, and Arnaud Lagardere, General Partner of Lagardere, co-chair the Executive Board. Thomas Enders and Noel Forgeard, the co-CEOs overlook the operational management of EADS. They chair the executive committee which is the central management of business activities.
The subject of this issue will be the Department of Defense and Security System. Indeed since the creation of EADS, this department is the second leading provider of the total revenues of EADS, behind Airbus. In addition, systems of defense and security become one of major concerns of many countries and companies given the current turbulent international climate. So we thought it would be interesting to see the defense systems available today and how they would develop within the companies concerned.