BAE Systems, Airbus Group swap out CEOs of U.S. based businesses

January 7

The heads of the U.S. units of two major European defense contractors said Tuesday that they are stepping down, making way for new leadership at a time when defense spending is being cut.

Sean O’Keefe, the chief executive of Airbus Group’s Herndon, Va.-based North American unit, will leave his post in March, the company said Tuesday, while Linda Hudson, chief executive of the U.S. unit of BAE Systems, will cede her role to Gerard J. DeMuro.

O’Keefe became CEO of the Airbus company, which was previously called EADS North America, in late 2009. The former NASA administrator is departing to “fully address ongoing medical issues” related to a 2010 aircraft accident in Alaska, the company said.

O’Keefe and his son survived the crash, which killed former U.S. senator Ted Stevens (R-Alaska).

O’Keefe said in a statement that he recently underwent another operation related to complications from the crash.

“While the outcome of this latest surgery is positive, it’s evident that the new complications will preclude the devotion of my best efforts to the duties of CEO of Airbus Group, Inc.,” he wrote. “Following reliable medical advice, it is increasingly apparent that I need to focus on a more aggressive rehabilitation regime.”

Airbus said Allan McArtor, chairman of Airbus Americas, Airbus Group’s commercial aircraft division in North and South America, will take over the job. He joined Airbus in 2001 after serving as head of the Federal Aviation Administration, founder of Legend Airlines and an executive at Federal Express, now known as FedEx.

BAE’s Arlington-based U.S. business has tapped DeMuro, who previously headed General Dynamics’ information-systems business, to become CEO.

DeMuro also spent close to a decade as a Pentagon acquisition official, according to BAE. The company said he was unavailable for an interview.

Hudson will remain an adviser to the company until the end of May to ensure a smooth transition, BAE officials said. She will also remain on the contractor’s board through April 2015.

Both contractors are making substitutions at the top at a time of significant change for their companies.

Starting this year, European Aeronautic Defence and Space — or EADS — was rebranded as Toulouse, France-based Airbus Group. The company now includes Airbus, which focuses on commercial aircraft; Airbus Defense and Space, which combines the Cassidian, Astrium and Airbus Military brands; and Airbus Helicopters, which includes commercial and military helicopter work.

In recent years, the Airbus Group unit — previously known as EADS North America — has struggled to grow its presence. It suffered a key setback in 2011 when it lost a massive deal, ultimately won by Boeing, to build a next-generation aerial refueling tanker.

In 2012, BAE’s London-based parent company sought to merge with what was then known as EADS, but that deal came to a halt after European officials failed to agree on terms.

Under Hudson’s tenure, BAE has divested some lines of business, reorganized the contractor’s structure and opened a shared services center in North Carolina.

She has also led BAE’s expansion of its commercial work, particularly in avionics and shipbuilding.

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