Forgeard fights back
Published 9:00 pm Tuesday, June 27, 2006
EADS co-CEO Noel Forgeard is resisting calls from Germany for his resignation, according to a number of reports from Europe.
Forgeard was called on the carpet by a French parliamentary committee today, where he defended his record and said quitting is not an option, Bloomberg News reports. http://www.bloomberg.com/apps/news?pid=20601100&sid=aV67r2mbJ620&refer=germany
Key Quote: “Forgeard … said there was ‘no question,’ of him resigning, according to Pierre Mehaignerie, the committee’s co-head. For ‘our German friends, that’s one of the elements,’ said Mehaignerie told reporters after the hearing. ‘Certain of them have asked for the resignation of Forgeard.’”
One of those “German friends” calling for Forgeard’s head seems to be Dieter Zetsche, the CEO of DaimlerChrysler, which owns 22.4 percent of EADS. He told The Wall Street Journal, in commments widely quoted by other news agencies, that “changes have to happen” at EADS. http://www.forbes.com/markets/feeds/afx/2006/06/28/afx2845188.html
Key Quote: “Zetsche … declined to say if the company …is demanding changes to EADS’s management … but ‘if we’re not successful, we might have to go public about where we stand’ on the matter, he said.”
Forgeard is accused of insider trading, exercising stock options and selling about $3 million worth of EADS shares just before news about major Airbus shareholder moves and further A380 delays sent the stock price plummeting. He reportedly gave a vigorous defense of himself, but French lawmakers weren’t all convinced the moves were on the up-and-up, Reuters said. http://today.reuters.com/stocks/QuoteCompanyNewsArticle.aspx?view=CN&storyID=2006-06-28T140317Z_01_L28885441_RTRIDST_0_TRANSPORT-EADS-UPDATE-4-REFILE.XML&rpc=66
Key Quote: “Patrick Ollier, an ally of French President Jacques Chirac … said parliamentarians had failed to make much headway. ‘The question of stock options is a difficult one to which we did not find all the answers. Each deputy (member of parliament) has the same doubts as before. It’s not up to us to point the finger of accusation,’ he told reporters.”
Forgeard has made more than his share of enemies inside EADS, noted The Times in London. http://business.timesonline.co.uk/article/0,,13130-2246570,00.html
Key Quote: “M Forgeard tried to block the appointment of Thomas Enders, his German counterpart, last year. German executives blame him for poisoning the atmosphere within the group, while French managers and directors blame their German colleagues for hiding the A380 delays until this month.”
Reuters, on Tuesday, noted the same thing. http://www.stuff.co.nz/stuff/0,2106,3714954a6026,00.html
Key Quote: “Chirac’s backing helped Forgeard win a power battle with the EADS German camp last year when he was promoted from Airbus. However he lost other strategy battles and industry analysts say Forgeard’s progress has left scores waiting to be settled.”
The infighting has left Forgeard highly dependent on the support of Chirac, whom he once served as an aide, Reuters noted Tuesday. But the French president doesn’t seem inclined to bail out his protege this time.
Key Quote: “Chirac said his former aide could not count on much support if an inquiry concluded he knew about the A380 delays before selling EADS shares earlier this year. ‘If this is established, then I would be shocked,’ Chirac told France 2.”
In the midst of all this, flight testing on the A380 continues, and the International Herald Tribune reports that pilots are finding a lot to like about the big new bird. http://www.iht.com/articles/2006/06/28/business/transcol29.php
Key Quote: “‘People I know who have flown it really like it,’ said John Cox, a longtime airline pilot and now a consultant who does work for both Airbus and Boeing. ‘They say it flies like a more nimble smaller plane. It’s a pleasure to fly.’”
