With few defense campaigns on the horizon, McArtor's initial focus for the new Airbus Group in the Americas is inward
Less than a month after announcing a headcount reduction and restructuring in its European operations, the Group is also making leadership changes in its North American arm.
Sean O'Keefe, once the head of(renamed the Airbus Group), is stepping down from his post. Allan McArtor, chairman of Airbus Americas, is assuming the role of CEO of the Airbus Group in North America in March, with oversight of operations in the U.S., Canada and Latin and South America.
McArtor says his focus in the next several months will be consolidating the three previous units—separately focused on commercial, helicopter and security work—into a single brand. A priority is to “transfer the confidence and successful image that has been created in Airbus to the noncommercial business,” he tells Aviation Week. His goals include becoming more competitive for government programs and emphasizing R&D and innovation. On the commercial side, McArtor plans to shore up the supply chain in order to be more competitive.
His primary competitor,, also is focusing on its supply chain through a strategy called “One Boeing.” Officials there are establishing single contracts with suppliers for parts across an array of programs—commercial and defense—rather than parsing out a plethora of deals with each supplier geared for only one specific project.
Among other annual January corporate leadership shifts, Jerry DeMuro will take over on Feb. 1 as president/CEO of' U.S. business following the retirement of Linda Hudson, announced in August. A former executive with , DeMuro left under a cloud following poor performance in his final year at the company's information systems and technology group, although he successfully integrated a number of acquisitions during his 14 years there.
McArtor has roots in both of the Airbus Group's main sectors, having run Legend Airlines, a regional that failed due to competition from. He also served as administrator in 1987-89 and was an F-4 pilot in the U.S. Air Force. He will be the third CEO of the company's U.S.-based operations, which was launched by Ralph Crosby in 2003 and then stewarded by O'Keefe since 2009.
O'Keefe is stepping down to focus on recovering from complications of injuries sustained in a 2010 de Havilland DHC-3T crash that claimed the lives of five people, including former Sen. Ted Stevens (R-Alaska). O'Keefe and his son survived. O'Keefe tells Aviation Week his 6-hr. surgery last month “was a wake-up call for me. . . . Every day is a bonus.” Though recovering well from the procedure, he says he must follow an aggressive rehabilitation regimen.
When O'Keefe took over, what was thenNorth America was in the throes of a bitter loss to Boeing in a battle for the U.S. Air Force's KC-135 replacement program.
Now the commercial sales in the Americas likely will continue to take a front seat to more defense business here, given cutbacks to defense spending globally. The company's new commercial aircraft assembly line in Mobile, Ala., is set to open within the next year, providing stateside capacity for sales. McArtor spearheaded the development of Airbus's newnarrowbody final assembly line at Mobile, from which the first deliveries are expected in 2016, with an annual production rate of 40-50 narrowbodies by 2018.
Like other contractors, the Airbus Group's U.S. arm has struggled to build a portfolio of major defense campaigns as the Pentagon cuts back on spending. McArtor says this side of the business probably will get a “scrub” as he plots a way forward, acknowledging the market challenges posed by reduced spending and an unwillingness to start new programs at the Pentagon. “Programs are a little too short-sighted for what I want to set up initially,” he says, noting that he plans a larger strategy of posturing the defense sector for future business.
The company's efforts to sell an armed version of theto the U.S. Army faltered because the service failed to carve a path for its scout helicopter mission. However, foreign sales of the aircraft could pick up. Thailand, the first foreign Lakota buyer, is purchasing six in a deal worth $77 million.
Despite the loss of the tanker program in 2008, McArtor says the Air Force may experience some “buyers' remorse” with its selection of the Boeing, a 767 derivative. “The Air Force will be quite impressed watching our tankers fly. . . . We may be back in the tanker business,” he says. Australia, the U.K. and the United Arab Emirates are flying -based tankers, he points out. Boeing's plan to deliver 18 KC-46s to the Pentagon in 2017 is aggressive; problems, should they arise, could reopen the door for Airbus. Additionally, the service has said it will consider a competition for another tanker, dubbed the KC-Y, once the first 179 KC-46s are delivered.
Unrealized plans for a move into the U.S. are not unique to the Airbus Group.has also restructured its operations here to acknowledge its quashed hopes of selling a new Marine One helicopter and many to the Pentagon.
Despite the grim immediate outlook for defense work, O'Keefe sees long-term opportunities stateside, including a potential sale of thetactical airlifter to the Pentagon. “We are beginning to deliver actual operational aircraft. I firmly believe that within a year or two years of watching that aircraft perform, . . . that is going to change the interest level and that is going to change the dynamic and debate” in the U.S., he says. “We are going to find ourselves in demand.”
With Tony Osborne in London.