TOULOUSE, France – Shareholders at Airbus’ parent company jettisoned a cumbersome dual management structure Monday that had French and German executives sharing top jobs, but they failed to break completely free from the national rivalries that have plagued the planemaker.
Under a deal hammered out by French and German factions in tense weekend negotiations, Frenchman Louis Gallois will take sole charge as the chief executive of European Aeronautic Defence &Space Co., backed by a German as chairman, with a second German heading Airbus operations. The three top executive posts, however, will alternate between countries every five years.
It is hoped that Monday’s overhaul – which coincided with a summit between French President Nicolas Sarkozy and German Chancellor Angela Merkel – will eliminate clashes that have been blamed for costly delays to Airbus’ superjumbo A380.
A report by the French Senate cited feuds between executives and teams in Frankfurt and Toulouse as the reason for delays that have wiped more than 5 billion euros ($6.89 billion) off of company profit forecasts for 2006-2010.
Sarkozy and Merkel hailed the deal as a victory.
“France hasn’t won over Germany and it’s not Germany that has won over France – it’s EADS that has won,” Sarkozy said, after he and Merkel met with Airbus workers and shareholders Monday.
Merkel called the changes “a very important step.”
Not everyone was impressed. Jean-Francois Knepper, a representative of Airbus’ main union, said “nothing has changed.”
“The actors have been shifted around but the struggles for power and influence will continue,” he said.
EADS shares rose 0.6 percent to 24.12 euros ($33.25) in Paris on news of the deal.
EADS was formed in 2000 by sewing together French, German and Spanish interests in Airbus. The agreement required that German and French investors hold equal stakes and be represented by joint chairmen and CEOs.
Gallois, the former chief of France’s national railway company, was appointed as head of Airbus and co-CEO of EADS in October. Four months later, he announced plans to slash 10,000 jobs and put into place changes meant to quash the troubles that have dogged the A380.
Gallois and his executive team will now enjoy more day-to-day leeway, according to EADS.
German Ruediger Grube, a former executive with DaimlerChrysler, is to become chairman, overseeing Gallois and leading a new strategic committee.
German Thomas Enders, 48, takes over Gallois’ former role as chief executive of Airbus and steps down as co-CEO of EADS. He will report to Gallois.
Lagardere Group SCA Chief Executive Arnaud Lagardere will relinquish his post as co-chairman of EADS but will have the opportunity to take back his job from Grube in five years time, if he wishes, Sarkozy said.
Shareholders must still approve the new management structure at a general meeting later this year.
Zafar Khan, a London-based aerospace and defense analyst with Societe Generale, welcomed the changes as a first step.
“The way governance was organized previously meant that you ended up with a lot of deadlocks on major decisions and there was no mechanism for resolving those issues,” he said.
The French government owns 15 percent of EADS, and French conglomerate Lagardere holds 7.5 percent. The German government holds no direct stake, but Germany-based DaimlerChrysler and German banks hold 22.5 percent.
Airbus and EADS “should be managed like companies and not like international organizations,” Sarkozy said. At the same time, he said the French government has a legitimate role in intervening as a shareholder.
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