France and Germany agree on EADS management shakeup

16th July 2007, Comments 0 comments

TOULOUSE, France, July 16, 2007 (AFP) - France on Monday took the top executive job at the European aerospace group EADS but left Germany in charge of troubled subsidiary Airbus in a management shakeup aimed at pulling the aviation giant out of crisis.

TOULOUSE, France, July 16, 2007 (AFP) - France on Monday took the top executive job at the European aerospace group EADS but left Germany in charge of troubled subsidiary Airbus in a management shakeup aimed at pulling the aviation giant out of crisis.

The agreement on the new management structure was announced as President Nicolas Sarkozy joined German Chancellor Angela Merkel at Airbus headquarters in the southwest city of Toulouse for a summit dominated by the problems at EADS.  

The European Aeronautic Defence and Space Company is currently headed by French and German chairmen and chief executives, an arrangement often blamed for slow decision-making and ineffective management.

Under the deal, the current French co-chief executive Louis Gallois will be the sole CEO of EADS while his German counterpart Thomas Enders becomes the chief executive of Airbus. Gallois until now has been serving as Airbus chief executive.

German Rudiger Grube becomes the sole chairman of the board of directors at EADS, removing the French co-chairman, Arnaud Lagardere, from the leadership even though he remains a member of the board, according to an EADS statement.

A French source told AFP that Lagardere, who had fought to stay in the top team, would take over as chairman of the board in four years.

"This is an equitable solution," Enders told reporters in Toulouse. "There is no winner. The only winner is EADS."

Gallois, who was also chief executive of Airbus, said "it is essential that we arrive at a solution that marks progress compared to the current situation."
 
"We all have the same priorities. That it works," said Gallois.

"These modifications will reinforce the efficiency of the group and contribute to strengthen its position as a global leader of the aeronautics and defence industry," said an EADS statement.

While Sarkozy and Merkel had agreed on streamlining the management structure, maintaining the Franco-German balance had turned out to be a major bone of contention that threatened to sour relations.

An aide to Sarkozy stressed that the two-headed management structure had been disastrous for EADS.

"Changing the men is important but it is not the most essential. What is essential is changing the way of governing the company and getting out of this situation where all of the powers are shared equally," said adviser Henri Guaino on French television.

"This has been very, very costly for the company."

The summit is seen as a test for Sarkozy, whose calls for political oversight of the euro's exchange rates and defense of France's industrial interests have irked Berlin and sparked fears of a resurgence of state interventionism.

Sarkozy and Merkel enjoyed lunch with Airbus workers at a cafeteria in an Airbus factory, smiling and shaking hands with the German and French employees at the plant.

They were to meet shareholders later and tour an assembly plant for the Airbus superjumbo A380 plane before holding a joint news conference.

The management changes come as Airbus is pushing through a sweeping restructuring plan to correct problems that saddled it with an operating loss last year despite its delivery of a record number of planes.

The spectacular fall into the red was caused mainly by delays and production problems with A380, which is set to enter service later this year.

EADS generated revenues of 39.4 billion euros (54.3 billion dollars) in 2006 and employs 116,000 people.

The principal shareholders are the French state, with 15 percent, and the French media and defence group Lagardere, which owns an equivalent stake that it is reducing to 7.5 percent.

On the German side, automaker DaimlerChrysler has 15 percent and 7.5 percent is held by a consortium of investors, including regional governments.


Copyright AFP

Subject: French news

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