Sarkozy's Early Days Will Be Determined By Handling Of EADS
Woes
Is France's newly-elected president a believer in the free
market system, or a strict nationalist who will use his power to
prop up his country's economy? Those are the types of questions ANN
typically leaves to entities such as The Wall Street Journal... but
how Nicolas Sarkozy handles the current crisis with European
planemaker Airbus could play a role in both his legacy, as well as
the future of the joint partnership agreement that led to the
creation of European Aeronautic Defense and Space Company.
During the presidential campaign, Sarkozy rattled the cage at
EADS, by calling for changes in the consortium's increasingly
volatile split-ownership structure. Following his election as
France's next president last weekend, however, Sarkozy has pledged
to cooperate with his German counterpart, Chancellor Angela Merkel,
to ease tensions between the two dominant partners in the EADS.
But that necessarily mean anything, notes Louis Gallois, the
French CEO of Airbus. "He is kissing Angela Merkel when they meet,
but that doesn't mean anything," he said wryly to reporters.
As Aero-News has reported
extensively, the EADS-mandated Power8 restructuring
program for Airbus calls for the elimination of 10,000 jobs at
Airbus facilities throughout Europe, including 4,300 in France. Not
unexpectedly, the plan has drawn strong criticism from French and
German workers.
Goldman Sachs economist
Nicolas Sobczak tells the New York Times that Airbus will be the
first big test of Sarkozy's plans for the French economy, as well
as his attitudes towards theunions opposing Power8.
"Airbus could soon become a test of his plans for a more
flexible labor market," Sobczak said. "It would be a good showcase
to demonstrate to the unions that it's not useful to oppose a
business plan that makes sense."
On the grander scale, Sarkozy's handling of the Airbus situation
may eventually influence the current Franco-German management
structure at EADS. Both sides maintain an uneasy dual-headed
power-sharing agreement, with Gallois sharing CEO duties at EADS
with Germany's Thomas Enders. The Times terms it a "balky"
management structure, "that neither side particularly likes."
That means analysts and politicians alike will be looking
intently for signs Sarkozy intends to increase the French role in
EADS.
"Sarkozy, despite his pro-American attitude, still feels that
Airbus is French and needs to be protected," said analyst Doug
McVitie, managing director of France's Arran Aerospace. "He has
this French attitude that Airbus is strategic for France."
Gallois -- at least publicly -- takes a more pragmatic approach,
saying little about what role Sarkozy may stake in the reversal of
Airbus' fortunes. Gallois does believe any reform of Airbus,
however, has to start with easing the political and cultural
tensions now present in EADS.
"It's because of national pride that we have the problem of the
A380, and people know that," he said.
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