Leadership Battle
March 6, 2007
As a French-German joint venture involving both governments and private investors, EADS was once hailed as a model for trans-national business cooperation within the European Union. But that may be coming to an end amidst the political fallout from plans to cut 10,000 jobs in the company's troubled Airbus division.
France stands to lose 4,300 jobs as a result of restructuring plans -- and that in an election year. So the country's presidential candidates are lining up with promises to pump more cash into Airbus and increase French influence on how the company is run.
In a television interview on Tuesday, conservative frontrunner Nicolas Sarkozy said that Paris should intervene to prevent job losses, adding that EADS needed a single hand at the helm. "There needs to be a real shareholder," Sarkozy said, "who would be the industrial boss of the company and who decides on management, and we should stop this Franco-German parity and just take the best people to take the best decisions."
Sarkozy's main rival for the French presidency, the socialist candidate Segolene Royal, said during a visit to Berlin that French regions should buy stock in the company. She has also said she would try to freeze the restructuring program.
The first round of the presidential election is scheduled for April 22. Thousands of French Airbus employees went on strike on Tuesday to protest the planned job cuts.
Shake-up at the very top?
And it's not just the candidates who are proposing a re-think of joint Franco-German management structures. Members of the current French government are also calling the partnership in its current form into question.
"If the state, together with other shareholders should get involved in raising more capital," French Prime Minister Dominique de Villepin has said, "then we should take the opportunity to raise the question of the company's leadership."
And in a radio interview on Tuesday, French Economics Minister Thierry Breton was even more explicit about a possible end to Franco-Germany parity at EADS, calling it a "mistake" and saying French interests should predominate.
Production delays to Airbus' flagship super-jumbo airplane A380, caused in part by poor coordination between French and German plants, are costing EADS billions of euros. In February, the company announced the mandatory redundancies as part of its overall restructuring program.