Gallois to head EADS, Enders to lead Airbus
16 July 2007, Toulouse (AP) – EADS, the parent of troubled planemaker Airbus, is abandoning its twin-chief executive structure, co-CEO Tom Enders said Monday, with France's Louis Gallois taking the company's reins.
16 July 2007
Toulouse (AP) – EADS, the parent of troubled planemaker Airbus, is abandoning its twin-chief executive structure, co-CEO Tom Enders said Monday, with France's Louis Gallois taking the company's reins.
"We need to be a normal company," Enders said, speaking to reporters ahead of a meeting between French President Nicolas Sarkozy and German Chancellor Angela Merkel. Enders said he become CEO of Airbus, which is struggling with losses amid production delays for its superjumbo A380.
Sarkozy – who just two months into the job has unveiled ambitious plans to fix Europe, the French economy, its ailing university system and more besides – has Airbus in his sights. He invited Merkel to Airbus headquarters in Toulouse on Monday to seek a solution to EADS' cumbersome dual management structure.
The unusual structure of European Aeronautic Defence & Space Co., run jointly by French and German management, was cited in a report by the French Senate last month as a major reason for Airbus' troubles.
In an interview with the German daily Handelsblatt, released on Sunday, Merkel insisted that politics must not play a role in the decision-making process at EADS.
"It's important that the company be run according to corporate, and not political, principles," Handelsblatt quoted Merkel as saying.
EADS has been tarnished by a series of mishaps over the past two years at Airbus, with delays to the A380 superjumbo and a revamp of the A350 coming amid revelations of management errors, technical woes and huge severance payments for departing executives.
Top executives have been ousted and a massive restructuring plan will result in 10,000 job cuts over four years. The setbacks have cost the company billions of euros in profits and saddled Airbus with its first-ever operating loss last year.
Still, Merkel insisted "Airbus remains a success story."
The German chancellor said, however, that important decisions on how the company would be run had to be made now, in order to ensure its success in the future. Both Sarkozy and Merkel have said maintaining a Franco-German balance at EADS is imperative.
The French government owns 15 percent of EADS, and French conglomerate Lagardere Groupe SCA holds 7.5 percent. The German government holds no direct stake, but Stuttgart, Germany-based DaimlerChrysler and German banks hold 22.5 percent.
Besides the management structure, EADS has other pressing issues to sort out, including the delayed A380 and the financing of the midsize, long-range A350 XWB, subject of a costly redesign. The implementation of the restructuring program also needs attention, and unions have questioned the need for job cuts after a raft of orders were announced at the Paris air show last month.
Subject: German news, French news, EADS