EADS Corporate Controlling: Fate or failure?
– the overview of the processes that lead to the closure of Corporate Controlling department and launch of POWER8 restructuring program
Abstract
This report is intended to show various aspects of EADS (European Aeronautic Defence and Space Company EADS N.V.) activities throughout the months of performance crisis and the measures that were developed to counter it.
Since the creation of EADS its performance was quite amazing - in a few years it became a serious threat to well established competitors of civil aviation and aerospace & defense industry. However, in the beginning of the year 2006 (and from internal perspective probably end of the year 2005) signs of relaxation could be noticed and inevitable delays in most important projects were about to be announced. When Airbus informed public about the delay of A380 EADS lost 1/3 of its value and Airbus CEO had to resign. Market was not happy with the development of A350 either forcing Airbus to redesign it and re-launch almost as a new airplane. Last but definitely not least, weak performance of dollar against euro reduced EADS competitiveness against US peers by approx. 20%.
Increasing cost of hedging, additional research and development spending, significant cost of fines paid to A380 customers for the delays caused the FY 2006 financial results to be really bad – worst in the entire history of EADS. Something had to be done about it. Somebody had to pay for it.
The document will briefly introduce readers to the one of the most complex and currently troubled company in Europe. It will focus on presenting the impact of the environmental and internal pressure that lead to disassembly of the Corporate Controlling department as well as introdu ...