The aerospace industry must embrace competition from technology companies such as Google Inc and SpaceX, which are already having a revolutionary impact on the sector, the head of the Airbus Group told reporters in an interview.
Describing the scale and speed of innovation in Silicon Valley as both “frightening and fascinating,” Airbus CEO Tom Enders said the increasing digitalization of the economy was having a profound impact on his company’s business.
“I think that in the future, our industry will have to work much more closely with these new high-tech companies ... if only because these guys are increasingly intruding on our territory,” said Enders, 55, who is halfway through a four-year mandate at the aerospace giant.
Enders cited SpaceX Corp, the space transport firm founded by former PayPal Inc entrepreneur Elon Musk, whose Falcon launch vehicles are taking on the market-leading Airbus-built Ariane in the commercial satellite launch market.
SpaceX has also mounted a legal challenge to the monopoly held by Boeing Co and Lockheed Martin on US government satellites launches.
Google in April acquired drone start-up Titan Aerospace, which aims to compete with Airbus in high-altitude unmanned planes meant to take on tasks traditionally carried out by more expensive satellites.
“Aerospace is still a rather young industry, but these people are even younger,” he said. “And I think there is no debate as to which of us is the more vibrant industry. They are.”
“The speed of decision and risk-taking and all that is amazing,” Enders said, speaking in Normandy, France, at an event to mark the 70th anniversary of the D-Day landings.
A paratrooper officer in the German army reserves and 25-year veteran of the European defense and aerospace industry, Enders also said that the EU was stifling innovation and warned it must cut red tape.
“It should make us think as we look at the software industry, when you look at the IT industry at the Microsofts, Amazons, Facebooks, SpaceXs, Yahoos — it is all coming from the US,” he said.
Many successful entrepreneurs in the US were “bright young Frenchmen and bright young Germans” who left Europe to seek venture capital and a dynamic entrepreneurial environment, he said.
Enders was named CEO of European Aeronautic Defence and Space Company (EADS) in June 2012 and immediately attempted a merger with Britain’s BAE Systems PLC, a deal that would have seen EADS replace Boeing as the world’s biggest aerospace and defense company.
After the deal was blocked by German authorities, Enders initiated an overhaul of the group’s structure, which reduced political influence.
He rebranded EADS into the Airbus Group, reorganizing the firm into three divisions by merging its defense and space businesses. He has since led a push to expand the group’s business outside of its home base in Europe, notably in Asia, the US and the Middle East.
The Airbus Group would continue to embed itself abroad through new assembly lines, engineering centers and supply partnerships.
Enders said it was inevitable that the proportion of Airbus’ workforce employed in Europe — currently 90 percent of the company’s 144,000 staff — would fall as its international expansion gathers pace.
“If that one day would be 80 percent or 70 percent, we would still be a European company,” he added.
Airbus’ turnover rose by 5 percent last year to 59.3 billion euros (US$80.9 billion). That compared with a rise of 6 percent to 63.5 billion euros for rival Boeing.
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