Anyone seeking to successfully complete a merger or acquisition (M&A) must not only carefully consider the economic and legal aspects, but also—and especially—the socio-psychological aspects. We explain what these might entail using the example of market consolidation in the German aerospace industry from 1989 to the present. As long-standing change and communication experts in this innovative key industry, we are familiar with its recent history. For decades, it has been marked by restructurings, M&As, name changes, and turnarounds (cost-cutting programs). Post-merger integration (PMI) measures – some of which we had the privilege of supporting – struggle to keep pace. Especially when corporate heritage was lost – or was in danger of being lost – as a catalyst for identification and loyalty.
Restructuring 1989: From MBB to DASA
The technical dimension of this restructuring
The German aerospace industry has a very long tradition. In this section, however, we will focus only on the period beginning in the 1960s. At that time, Messerschmitt-Bölkow-Blohm GmbH (MBB) brought many companies under its umbrella through mergers. These included, for example, the plants of Messerschmitt (Augsburg, Munich, Manching), of Bölkow (Ottobrunn, Schrobenhausen), of Heinkel (formerly Warnemünde, Rostock, later Speyer), of Junkers (Munich), of Focke-Wulf (Bremen, Varel, Nordenham), and of Blohm (Hamburg).
On September 6, 1989, MBB ceased to exist; at that time, it employed approximately 40,000 people, who in turn generated revenue of 7.1 billion German marks. On that day, MBB merged with Deutsche Aerospace AG (DASA). DASA, in turn, had emerged on May 19, 1989, from the merger of Dornier GmbH (then part of the Daimler-Benz Group) with MTU Friedrichshafen GmbH (Motoren- und Turbinen-Union München / Friedrichshafen) and parts of AEG AG. The goal was to create an internationally competitive national systems leader.
Social-psychological aspects of this restructuring
With their integration into DASA, the workforces of many plants lost important sources of identification. These included, in particular, the traditional brands “Messerschmitt,” “Bölkow,” and “Blohm”—all renowned German aerospace engineers. For the employees, these names carried positive connotations, linked to pride in technical innovations such as the Bo 105 and BK 117 helicopters or the Transrapid maglev train.
PMI: Identification & loyalty with a new name
Instead, people were now expected to identify with the acronym DASA. There were no longer any legendary engineers behind it. Instead, for many MBB employees, the four letters initially conveyed an anonymous, empty shell. This was further exacerbated by the fact that the shareholders assigned three different meanings to the acronym DASA within a short period of time: first Deutsche Aerospace AG, then Daimler-Benz Aerospace AG, and finally DaimlerChrysler Aerospace AG.
Many must have felt robbed of their professional roots. Such an approach does not automatically make it easier to identify with the new company or foster loyalty to it. Yet in this case, DASA’s vision was certainly well-founded: a national aerospace champion with a 100-year tradition that appeared internationally competitive.
The roots of Dornier GmbH date back to 1922. Starting in 1966, the aircraft manufacturer from Lake Constance operated under this name. At the branch plant in Oberpfaffenhofen, the workforce not only assembled aircraft but also handled technical and logistical support (TLB) and repairs for models such as the Alpha Jet, UH-1D, Breguet Atlantic, AWACS, and CL 601 Challenger.
Dornier Luftfahrt GmbH
Starting in 1981, Dornier Luftfahrt GmbH (the part of the technology group that had since been established, with nearly 10,000 employees, that still belonged to the aviation industry) took over production of the Dornier 228 in Oberpfaffenhofen. In 1996, the Dutch company Fairchild Aviation merged with Dornier Luftfahrt GmbH to form Fairchild Dornier. Two years later, however, the new company ceased production of the Dornier 228 in Germany after building approximately 270 units, in favor of the successor projects Do 328/Do 328JET and Do 728.
From Fairchild to RUAG Aerospace to General Atomics
In the wake of the crisis in general aviation following the attacks of September 11, 2001, Fairchild Dornier was also forced to file for bankruptcy. The Swiss RUAG Group acquired the aircraft maintenance division (RUAG Aerospace Services GmbH) and the Airbus component manufacturing division (RUAG Aerospace Structures GmbH) from the bankruptcy estate. From its base in Oberpfaffenhofen, RUAG also served existing Dornier 228 customers. In 2009, the 19-seater experienced a renaissance as the Do 228 NG (New Generation), featuring over 350 modifications compared to the previous model.
Starting in 2021, General Atomics Europe manufactured the Do 228 NG.
- A Brief History of Dornier GmbH
-
The roots of Dornier GmbH date back to 1922. Starting in 1966, the aircraft manufacturer from Lake Constance operated under this name. At the branch plant in Oberpfaffenhofen, the workforce not only assembled aircraft but also handled technical and logistical support (TLB) and repairs for models such as the Alpha Jet, UH-1D, Breguet Atlantic, AWACS, and CL 601 Challenger.
Dornier Luftfahrt GmbH
Starting in 1981, Dornier Luftfahrt GmbH (the part of the technology group that had since been established, with nearly 10,000 employees, that still belonged to the aviation industry) took over production of the Dornier 228 in Oberpfaffenhofen. In 1996, the Dutch company Fairchild Aviation merged with Dornier Luftfahrt GmbH to form Fairchild Dornier. Two years later, however, the new company ceased production of the Dornier 228 in Germany after building approximately 270 units, in favor of the successor projects Do 328/Do 328JET and Do 728.
From Fairchild to RUAG Aerospace to General Atomics
In the wake of the crisis in general aviation following the attacks of September 11, 2001, Fairchild Dornier was also forced to file for bankruptcy. The Swiss RUAG Group acquired the aircraft maintenance division (RUAG Aerospace Services GmbH) and the Airbus component manufacturing division (RUAG Aerospace Structures GmbH) from the bankruptcy estate. From its base in Oberpfaffenhofen, RUAG also served existing Dornier 228 customers. In 2009, the 19-seater experienced a renaissance as the Do 228 NG (New Generation), featuring over 350 modifications compared to the previous model.
Starting in 2021, General Atomics Europe manufactured the Do 228 NG.
Turnaround 1995: The “Dolores” Cost-Cutting Program
The technical dimension of the turnaround
As is typically the case with any M&A transaction, the merger to form DASA also had the legitimate goal of reducing costs. Yet costs rose. Not least because the new group had to produce at hard Deutschmark rates and sell at increasingly soft dollar rates. In 1995, DASA therefore launched the “Dolores” (Dollar Low Rescue) cost-cutting program to return to profitability by 1997. It aimed to save two billion Deutschmarks through this initiative. The corresponding component formula of the turnaround program was:
- 30% workforce reduction (approx. 8,800 jobs by 1998),
- 30% cost savings,
- 30% increase in efficiency.
Social-psychological aspects of the turnaround
Five years after MBB’s integration into DASA, the new national aerospace group was in crisis. The parent company, Daimler-Benz AG, demanded cost-cutting measures. The plans to restructure DASA triggered fears among employees of job losses. After all, the “Dolores” cost-cutting program and other structural measures threatened the elimination of around 15,000 jobs.
Uncertainty & demotivation among the remaining employees
Works councils and unions responded with protests. “If the workforce flies, the Airbus stays on the ground,” was a slogan at the time. After months of negotiations, employers and employees finally agreed, among other things, to cut 8,800 jobs. Even though early retirement schemes greatly cushioned the financial losses, “Dolores” left the remaining employees with at least a sense of uncertainty and demotivation. A lack of identification with the company was added to this. This was essentially only possible again with newly hired staff.
Restructuring 2000: From DASA to EADS
The technical dimension of this market consolidation phase
A decade after the founding of DASA and shortly after the completion of the “Dolores” cost-cutting program, DASA merged with the French company Aérospatiale-Matra and the Spanish company CASA on July 10, 2000, to form EADS N.V. (European Aeronautic Defence and Space Company). The founding of EADS served to pool the strengths of the European aerospace industry in response to a comparable consolidation in the U.S. during the 1990s.
Social-psychological aspects of this market consolidation phase
As was the case for all approximately 113,000 employees of the new EADS worldwide, the rebranding and restructuring also posed a major challenge for the DASA workforce in Germany. This was because the renaming of MBB to DASA, along with the associated post-merger integration (PMI), was still fresh in their collective memory. Management and corporate communications had supported these processes by developing corresponding mission statements and strategies.
PMI: Identifying a new name & new vision
Now, another new vision: From then on, the employees of the former DASA plants were no longer to see themselves as part of a national aerospace champion with nearly 100 years of tradition, but as part of a completely new global player called EADS. This first major European technology group was attractive to career starters and young workers. It hired many new people.
PMI: Jokes about the company name instead of loyalty
The major challenge for the new group, however, was the former MBB and DASA employees. Tens of thousands of them had to be convinced of the new strategy, the reorganization, the rebranding, and the internationalization. A mammoth task for post-merger integration and thus for the new group’s internal (change) communication.
“What are we actually called today?” This ironic everyday question was circulating in the hallways and production halls at the time. It was asked by those among the roughly 46,000 German EADS employees who had still experienced the MBB era. And in their respective social circles, they had to listen to similar remarks for a long time. This did not make it any easier for them to identify with their new company.
Turnaround 2007: The “Power 8” cost-cutting program
The technical dimension of the turnaround
A few years after its founding, EADS ran into financial difficulties. Among the reasons were the ongoing influence of national governments. To return to profitability, the European conglomerate launched the “Power 8” cost-cutting program (as the successor to “Route 06,” which in turn had followed the 2003 restructuring). With this, EADS aimed to save 2.1 billion euros annually in its Airbus division between 2007 and 2010. The measures included:
- the elimination of approximately 10,000 of the roughly 55,000 Airbus jobs across Europe,
- negotiating more favorable terms with suppliers, and
- the sale of individual plants, such as those in Augsburg, Varel, and Nordenham.
By spinning them off, these plants were intended to achieve Tier-1 supplier status. However, for various reasons, no suitable buyers could be found. To enable the spin-off anyway, they were merged in 2009 into a new, wholly-owned subsidiary (“Premium Aerotec,” see below). From then on, the company had to base its pricing on the international market.
Social-psychological aspects of the turnaround
The “Power 8” cost-cutting program thus called for divestment. A direct consequence of earlier M&As that had not paid off strategically because the hoped-for synergies failed to materialize.
How must this divestiture or spin-off have been received by the approximately 6,000 employees of these plants, who had already endured two identity crises in previous years? Especially since one can safely assume that they had not even fully navigated the change curve following the restructuring from DASA to EADS. As a result, their performance at that time remained below pre-crisis levels, which had led to the “Power 8” cost-cutting program.
PMI: New loyalty & identification despite divestiture
This complex situation now presented the management of the spun-off company with major challenges. They had to boost performance again by creating new opportunities for employee identification, loyalty, and motivation. The idea: employees should actively participate in naming their spun-off company. Their result: “Premium Aerotec.” A name full of pride, as well as a deep understanding of quality and a commitment to it.
2021: Restructuring, Turnaround, and PMI continue
Like MBB, DASA, and other company names in the German aerospace industry, the acronym EADS has now also ended up in the graveyard of company names. Starting in 2014, the European group was called Airbus Group and has operated under the name Airbus SE since 2017 (following the merger of Airbus Group SE and Airbus S.A.S.).
Names are just smoke and mirrors, but the reasons for cost-cutting programs remain: In 2020, the first year of the COVID-19 crisis, Airbus’s business plummeted by 40 percent. Further restructuring is necessary. Among its key points is the elimination of 10,000 jobs. On the other hand, the once-outsourced plants I-III in Augsburg, those in Nordenham and Bremen (all Premium-Aerotec), as well as the Airbus site in Stade and the structural assembly facility in Hamburg, are being reintegrated into the group.
A glance at the industry’s recent history makes it easy to imagine what social and emotional consequences this will have for employees and, consequently, for their performance: They are going through an emotional roller coaster and must first find their footing in the new structures. It will be crucial to mitigate these consequences through stakeholder participation, the involvement of sponsors, necessary training, and agile change communication tailored to specific target groups.
Last Updated on 05/11/2026
Author(s)
Dr. Dominik Faust verfügt über langjährige operative Führungserfahrung (>70 MA) mit P&L-Verantwortung (>6 Mio. €). Er ist Kommunikationsprofi mit der Dreifach-Perspektive eines Journalisten & Autors, eines Leiters Corporate Communications & Pressesprechers sowie eines Medienmanagers. Zudem ist er zertifizierter Change Manager und Großgruppenmoderator. Als Top-Management-Berater unterstützt er seit vielen Jahren KMUs und DAX-Konzerne bei der Planung und erfolgreichen Steuerung komplexer Projekte bzw. Transformationsvorhaben. Seine Erfahrungen teilt er hier im Blog.
