Airbus Group Starts $150 Million Venture Fund, Silicon Valley Base

Airbus Group announced the creation of a $150 million venture capital fund and said it had hired a Google executive to run a new centre in Silicon Valley as it seeks to wave a digital wand over its heavy-manufacturing culture.

The planemaker said on Friday that Airbus Group Ventures would invest in "disruptive and innovative" technologies worldwide. It will be headed by Tim Dombrowski, 54, formerly a partner at venture capital firm Andreessen Horowitz.

The European group also said it had recruited Google executive and former U.S. aeronautics researcher Paul Eremenko, 35, to run an innovation centre in Silicon Valley.

Airbus Group Chief Executive Tom Enders announced the centre's creation on Wednesday, saying it would provide promising avenues for technology it might otherwise miss.

It is the latest evidence of efforts by planemakers to woo technologists as potential partners and comes weeks after Enders took the company's top management team to California to see what lessons could be learned from the digital revolution.

Enders was quoted as saying after a previous visit to Silicon Valley last year that the aerospace industry must work more closely with high-tech companies - some of which, like Google, are encroaching on its turf through drone projects.

Boeing's Chief Executive Jim McNerney said last year it wanted it to be more like Apple in the way it innovates, rather than doing a "moonshot" development every 25 years.

Both planemakers have talked of the need to introduce improvements more quickly, without waiting for all-new plane developments that take years and cost around $15 billion.

Though the highly safety-regulated and capital-intensive aerospace industry will always be conservative about the major bets that drive plane developments, Enders wants Airbus to learn to act "more quickly and with more courage", an aide said.

Aerospace companies say they are increasingly thinking about software rather than hardware throughout their businesses.

Although next month will still see hundreds of jet orders at the Paris Airshow, the focus of competition between Airbus and Boeing is shifting quickly towards the way they build planes now that each has almost a decade's worth of orders to fulfil.

On Thursday, Airbus presented to journalists its plans for a futuristic factory in which humans, robots and cobots - or collaborative robots - interact to make planes more smoothly and cheaply, but acknowledged it would not happen overnight.

© Thomson Reuters 2015