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September 17, 2012 6:56 pm
“Airbus” has been proposed by EADS as a possible name for the new €38bn company to be formed by combining the Franco-German group with the UK’s BAE Systems, in spite of concerns that this could inflame tensions with both the US and Britain.
The new name would replicate the title of EADS’s flagship civil aerospace division based in France. Sensibilities on the UK side of the planned merger would be addressed by making London the headquarters of the new company’s defence operation. These would be based mainly on the activities of BAE.
“This [the Airbus name] would be anathema to a lot of Americans,” said a senior executive from a big European aerospace business unrelated either to EADS or BAE. “Can you imagine the reaction in the Pentagon at the idea of buying military hardware from Airbus?”
The US and Europe have a long history of trade disputes involving Airbus and Boeing, involving allegations from both sides about government finance being used to support the different companies.
A person involved with the talks confirmed that using the Airbus name was one option being discussed by EADS, though it was “still subject to debate” and there were “quite a few other possibilities” including sticking to EADS.
One of the arguments from the EADS side for choosing Airbus as a potential name is to emphasise that the new company – which would be divided into an aerospace and defence division – would be a strong competitor for Boeing.
Key metrics behind the attempted combination, as well as taking a look at the history of European defence consolidation
The choice of Airbus also would fit in with the desire by Tom Enders, EADS chief executive and the most likely candidate for the same job in the merged business, to opt for a new name that would help to distance EADS from its history as a company strongly influenced by the governments of France and Germany.
Another person familiar with BAE’s thinking said that a number of names for the combined company had been discussed “but none have been good enough to stick in my mind” and that any decision on the matter “was a long way away”.
Professor Steven McGuire, director of the Centre for International Business and Public Policy at Aberystwyth University, said that while Airbus was a “strong brand” with plenty of global recognition, the most likely outcome would be for the name to be dropped because of the number of potential objections.
EADS and BAE declined to comment.
Additional reporting by Anousha Sakoui and Andrew Parker
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