Airbus boss could get the boot after three months

9th October 2006, Comments 0 comments

PARIS, Oct 9, 2006 (AFP) - EADS seems set on installing a new hand at the controls of its crisis-hit aircraft arm Airbus, with an informed source saying it is ready to replace chief executive Christian Streiff after just three months by EADS co-chief executive Louis Gallois.

PARIS, Oct 9, 2006 (AFP) - EADS seems set on installing a new hand at the controls of its crisis-hit aircraft arm Airbus, with an informed source saying it is ready to replace chief executive Christian Streiff after just three months by EADS co-chief executive Louis Gallois.

A recovery plan dubbed Power8 unveiled by Streiff a week ago nonetheless has "the full backing of EADS board of directors", the source told AFP.

Financial details of the plan were unveiled last week but management later told labor representatives that measures concerning manufacturing and staff levels had not yet been finalised.

The source said Monday that leading private shareholders in EADS including German automaker DaimlerChrysler and the French media group Lagardere were ready to accept Streiff's departure after just three months as head of the troubled plane maker, .

According to press reports, Streiff has insisted on greater independence in implementing a radical restructuring plan for Airbus, while EADS wants more control over the company and its complex manufacturing processes.

That was made clear to Streiff when he was named chief executive in July, and the Airbus boss is said to have displayed a "lack of diplomacy" in pressing his case.

This week, EADS is expected to finalize the purchase of a 20-percent stake in Airbus from BAE Systems of Britain, giving EADS full ownership of the European plane maker.

Meanwhile, German Chancellor Angela Merkel and French President Jacques Chirac were to discuss problems at Airbus when they meet Thursday in Paris, a German government spokesman said last week.

In addition to delays with the A380, Airbus has run into trouble with its future A350 XWB model as well as with its future A400M military transport, which has been ordered by France and Germany, among other countries.

Ten days ago Streiff presented the findings of an internal Airbus audit to the EADS board and outlined his restructuring plan.

The board did not formally approve the plan, but last Monday it announced ambitious cost-cutting targets to pull Airbus out of its crisis.

In a subsequent meeting with staff however, Airbus management said it would need up to three months to present details of the restructuring plan.

In the meantime, Streiff sent letters of resignation to EADS German and French co-chief executives, Thomas Enders and Gallois.

"The EADS board has not formally accepted his resignation yet, because it has not met," the source told AFP, adding that it could do so this week.

EADS declined to comment.

French Prime Minister Dominique de Villepin expressed support for Streiff on Saturday however, and the source said Economy Minister "Thierry Breton wanted to keep Streiff at least until the French presidential election in (May) 2007."

The question was a matter for the EADS board, the source stressed.

France holds a 15-percent stake in EADS, while DaimlerChrysler owns 22.5 percent and Lagardère holds 7.5 percent, giving French and German interests equal shares.

The company has French and German co-chairmen in addition to co-chief executives from each country.

Airbus manufacturing has been shared mainly by Britain, France, Germany and Spain, with final assembly in Hamburg and Toulouse, a system analysts say adds to costs and complexity.

But in Frankfurt, an analyst who declined to be named commented on the latest development by saying: "It's anything but good for the share. EADS is tumbling from one catastrophe to the next.

"Streiff was the first person to make it clear that it shouldn't be about national egos and industrial political decisions, but about getting the company ship-shape, making production more efficient."

At Bayerishce Landesbank, Ulrich Horstmann added: "It's bad when someone (such as Streiff) who has a certain reputation leaves the company after such a short time. The reasons can only be speculated about."

EADS shares lost 1.27 percent to EUR 20.17 in midday trading on the Paris stock exchange, while the CAC 40 index of leading shares was down by 0.11 percent at 5,276.19 points.

Copyright AFP

Subject: French news

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