EADS Streamlined
July 16, 2007
German Chancellor Angela Merkel and French President Nicolas Sarkozy presented the new leadership structure during their meeting in the southwestern French city of Toulouse.
The European Aeronautic Defence and Space Company (EADs) and Airbus had an awkward managament structure with two co-chairmen and two co-chief executives from France and Germany.
The twin-headed management structure had been widely blamed for slow decision-making and inefficiency.
Under the deal, France's Louis Gallois will be the sole head of EADS, while Germany's Tom Enders will become chief executive of Airbus, which is struggling with losses amid lengthy production delays for its superjumbo A380.
Positive step
"I am convinced we have come up with a good solution for the future of EADs and of Airbus," said Merkel during a tour of the Airbus factory in Toulouse in southwest France.
"This is a great day for this company, a great decision has been taken. It is a great day for the Franco-German axis," said Sarkozy.
"EADs, Airbus, these are companies that have to be managed like companies and not like international organizations," he added.
Under the new structure, Rüdiger Grube of Daimler is also set to become sole chairman. DaimlerChrysler is the biggest private German shareholder of EADS.
Tension over?
This means the French co-chairman Arnaud Lagardere will be removed. But Sarkozy's comments that he could take over as chairman of the board under a rotating system every five years indicates that the sensitive question of the Franco-German balance could remain a problem.
EADs is controlled by a group of French and German shareholders which are either public or politically-linked private investors. Squabbles over control and influence have blighted its seven-year history.
Airbus posted a massive loss last year despite delivering a record number of planes, and the company is being left far behind its main rival US plane maker Boeing. The success of Boeing's recently unveiled Dreamliner has put the European venture under further pressure.
Radical restructuring plans that foresee the loss of 10,000 jobs have also been the source of considerable Franco-German tension with each side trying to keep job cuts in the respective country to a minimum.