Recently Eads, the majority owner of Airbus, put an end to the crisis that has crippled it for more than two weeks by forcing the resignations of Noel Forgeard, its joint chief executive, and Gustav Humbert, the head of the European plane maker.
After days of frantic political manoeuvring between Paris and Berlin, Eads installed Louis Gallois, head of the French state railways SNCF, as co-chief executive with German Tom Enders, and Christian Streiff, deputy CEO of French glassmaker Saint-Gobain, as Humbert’s replacement.
Both are hailed, with Enders, as turnaround specialists in Eads circles and are expected to get to immediate grips with the industrial problems surrounding Airbus’s A380 superjumbo, which have caused a further six-month delay in its delivery timetable and had triggered a 26% collapse in Eads’s share price by June 13.
The outcome of the government negotiations with Eads’s major shareholders — German-United States car group DaimlerChrysler (22,5%) and French media group Lagardere (7,5%) — is a savage personal blow for Forgeard. As the self-promoted head of the Airbus shareholders’ committee, he is being held responsible for the A380 debacle, which could cost Eads â,¬2billion in profit in the next four years and bring costly cancellations among the 159 orders.
Forgeard, who took over as Eads’s co-chief a year ago, after running Airbus for seven years and masterminding its supremacy over its arch-rival Boeing, refused to resign as late as Wednesday, when he was grilled by French deputies over the A380 delays and his share dealings in Eads, which netted him â,¬2,5million in mid-March.
It is understood that Daimler’s chief executive, Dieter Zetsche, and Eads’s co-chairman, Manfred Bischoff, a Daimler executive, forced the hands of the French government, which owns 15%, and Arnaud Lagardere, Eads co-chairperson, when Humbert offered his resignation on Thursday.
Daimler, with Berlin’s backing, demanded a French head to match that of Humbert, sealing Forgeard’s fate. Humbert said: ”I must take responsibility for this setback and feel the right course of action is to offer my resignation.”
But the price of Zetsche’s coup was the retention, against Daimler’s initial wishes, of the dual national structure at the top of Eads. Daimler had pressed for a single chairperson, Gallois, and a single CEO, Enders, en route to making the aerospace and defence group a ”normal” company entirely owned by institutional and retail investors.
Lagardere refused point-blank to step down despite losing the support of the French government — partly out of loyalty to his late father, Jean-Luc, an architect of Airbus and its predecessor, Aerospatiale. He stays on as co-chairman.
French Finance Minister Thierry Breton, who led his government’s negotiating team, said the changes would strengthen the Franco-German axis. Sources close to Eads said the aim was to recreate the successful partnership of Philippe Camus and Rainer Hertrich, the first joint CEOs when the group was founded in 2000. They were forced out by the French after politi-cal infighting — lasting eight months and instigated by the ambitious Forgeard — with the Germans.
Eads executives hope the markets will respond to the changes and the retained dual-national structure with a rise in the group’s share price. It has recovered about 20% since June 13. Gallois, a socialist, took over a loss-making, debt-ridden SNCF a decade ago and turned in net earnings of â,¬1,3billion last year, while modernising the railway and making it a pan-European competitor. ”The new team will not spend all day politicking, but getting on with the job,” an insider said.
Airbus is to be taken under central Eads control and Enders, who takes it under his wing in a new division of responsibilities, and Streiff were due in Toulouse on July 2 to add the finishing touches to an A380 ”recovery” plan. — Â