EADS is heading west - and east - in a bid to become less European and less Airbus. Chief executive Louis Galloislast week spelled out his promised 12-year strategy to transform a manufacturer heavily dependent on airliner sales into a diversified global business that gains half its revenues from other activities, including defence, security and services.

A series of "medium-size" acquisitions in the USA and Asia will be a cornerstone of Gallois' Vision 2020 to reduce Airbus from 65% of the European giant's turnover to a figure closer to the 47% of Boeing's revenues made up by commercial aircraft. Speaking at a new year press conference at Eurocopter's plant in Donauwoerth, near Munich, on 10 January, he also vowed to return the group - which has been ravaged financially by the dollar exchange rate and the cost of delays to the A380 and A400M - to 10% profitability before 2015.

At the heart of the strategy is a push to make EADS a more "international" company. Around 97% of the company's employees work in Europe, almost entirely in its four "home" nations of France, Germany, Spain and the UK. Gallois says he wants that figure to be just 80% by 2020.

The Frenchman - who was appointed sole EADS chief executive last year - wants to reduce the company's dependence on Airbus to make it less vulnerable to cyclicality of airliner sales and the huge capital investments necessary to get programmes to market. Although Airbus is enjoying record orders and facing challenges on capacity, he is only too aware that boom can turn to bust, as it has roughly every 10 years for the past few decades. He admitted, however, that Airbus's "momentum" meant reducing its share of EADS revenues was "not easy", adding: "It cannot be done without acquisitions."

The heavily-fortified US defence market has long been EADS's holy grail. Its limited success with the Pentagon when it comes to military hardware - although it is still a contender to supply the air force's next tanker fleet - has been partly offset by strong sales in the police and parapublic market with Eurocopter. But it is in services - providing lifetime product support and integrating software systems - in North America and elsewhere that EADS sees a huge opportunity. Just a tenth of EADS's turnover comes from services. "It is not enough," says Gallois, laying down a target of 20 billion ($30 billion) revenues from services out of a total turnover of 80 billion by 2020. "We need to be better balanced between platforms and services," he says.

EADS faces short-term battles too, in particular cutting costs at Airbus in the face of the ailing dollar (which erodes revenues when most of the airframer's outgoings are in euros), and getting delayed programmes - the Airbus A380 and A350XWB as well as the A400M and the naval version of the NH90 military helicopter - on track. Gallois admits EADS's programme management "has shown a clear need for improvement".

He also says the Power8 cost cutting plan is on schedule with Airbus "overachieving" on its savings target in 2007. The company is in negotiations with preferred bidders to sell six structures plants to suppliers by the middle of this year, a key objective of its cost reduction strategy. However, the weakening of the dollar throughout last year means the company will have to take "additional measures" to cut overheads in 2008, says Gallois.

It may have a new name - Vision 2020 - but EADS's wish to be more than a "platform supplier" and expand its global footprint through acquisitions has been a refrain of each of Gallois' precessors since the group's formation in 2000. However, Gallois says: "This time we are taking serious measures and orientation." The US dollar, he said, "is so low, it is the right time to buy".

At 62, Gallois is unlikely to still be running the company at the target date he has set for achieving his financial targets. But - as he and his senior executives begin explaining the strategy to management this week - Gallois is insistent that an unwieldy Franco-German conglomerate set up in response to the consolidation in the US aerospace sector in the 1990s has, perhaps for the first time, a very clear direction. "Vision 2020 is not a dream," he says.

Source: Flight International