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Power8 - turnaround programme
At the beginning of 2007, Airbus launched a four-year restructuring programme referred to as 'Power8', with the goal of achieving EBIT* contributions of €2.1 billion from 2010 onwards and an additional €5 billion of cumulative cash flow from 2007 to 2010. As part of the planned measures under Power8 to reduce overhead costs, and specifically headcount, EADS recorded a restructuring expense of €- 624 million in EBIT* in 2007. In 2008, €194 million of this provision has been reversed to reflect the current level of restructuring obligation which is lower than originally anticipated.
Power8 aims to build a 'new Airbus', a fully integrated company that will be leaner, more efficient and more productive. The result should be faster aircraft development and a clearer focus on Airbus' core business – as aircraft architect and integrator, in addition to supporting the operations of its aircraft.
The Power8 turnaround programme will restore Airbus' competitiveness. Its eight modules will reduce costs and streamline the industrial organisation.
The programme achieved its goals for the year 2007, notably reducing annual costs more than the year’s €300 million target. Additionally, integration took a step forward with the eight mostly national Centres of Excellence consolidated to four fully transnational organisations, covering fuselage and cabin, wing and pylon, aft fuselage and empennage, and aerostructures.
Savings realised pursuant to Power8 provided gross cost savings of €1.3 billion in 2008 compared to the initial cost baseline.
The long-term deterioration of the US dollar makes cost-saving programmes vital for Airbus’ future competitiveness. The Power8 programme made significant progress. By the end of 2009, approximately € 2 billion of gross annual savings were made against the projected cost base, due to a new organisational structure, leaner processes and careful cash management.
Power8 Plus
In 2008, EADS launched a Group-wide cost savings programme referred to as 'Power8 Plus', with the goal of achieving further EBIT* contributions of €1 billion beginning in 2011-2012. Airbus is expected to contribute roughly two thirds of the targeted cost savings, with the remaining portion to be contributed by the Eurocopter, Astrium and Cassidian Divisions as well as by EADS Headquarters.
Future EADS
The “Future EADS” programme – launched at the end of 2008 with the goal of achieving gross annual savings of € 350 million against the projected cost base by the end of 2012. It aims at further integration of the organisational structure, improvement of decision-making processes and cost savings through the Headquarters and the Divisions as well as an enhanced interaction between Headquarters and the Divisions.
As part of this initiative, the former Military Transport Aircraft Division has been integrated into Airbus under the name of 'Airbus Military'.
In 2009, Eurocopter launched a new corporate transformation programme called SHAPE in order to adapt context while maintaining sustainable growth and aiming to save €200 million annually compared to the projected cost base by the end of 2011. The programme includes Eurocopter’s contribution to Future EADS.
