Talk Of Replacing Dual Power-Sharing Arrangement With One CEO,
change may be in the offing for management at European Aeronautic
Defense & Space Co... and some would say a change is long
The Wall Street Journal reports there is talk at EADS of
removing the dual-chief-executive structure that has defined the
aerospace consortium throughout its seven-year history. Critics say
that power breakdown -- in which German and French executives share
the CEO and Chairman titles, to represent shareholders in those
countries -- has stifled efforts to restructure the company.
What remains unclear, however, is whether the plan -- which
would retain Germany's Thomas Enders as the sole CEO -- would ease
political and nationalist in-fighting between French and German
shareholders, or make the situation even worse.
"It's not clear whether French and German shareholders
understand what shifting to a lighter management structure, that of
an ordinary corporation, means," said an unidentified person close
to the talks. "No more direct phone calls to the executives."
Under the plan said to be in the works, EADS shareholders would
name a Frenchman as sole chairman of the consortium, presumably
current co-Chairman Arnard Lagardere, or former EADS co-CEO
Phillipe Camus. The current German co-Chairman, Rudiger Grube,
wouldn't remain in that position, according to the unnamed
Enders currently shares the CEO title at EADS with Louis
Gallois, a Frenchman, who is also chief executive at Airbus.
Gallois (below) would keep that role, but lose the co-CEO title at
EADS, under the plan.
Ideally, the new management structure would be agreed upon
before a planned July 16 meeting between new French president
Nicolas Sarkozy, and German Chancellor Angela Merkel.
Proponents of the one-CEO plan maintain the current management
structure at EADS hindered its response to production problems with
the Airbus A380, and has slowed the planemaker's ability to respond
to the challenge posed by rival Boeing's 787 Dreamliner.
After going through one major redesign, Airbus' A350 XWB isn't due
to fly until 2013 -- five years after the 787 is scheduled to enter
The hope is that a more streamlined management structure would
impart a "buck stops here" mentality at EADs -- with executives
better able to meet challenges, and less concerned with who To
blame for them.
EADS was formed in 2000 following the merger of several private
and state-owned aerospace companies in France and Germany.
Shareholders in both countries own 50 percent of the company
combined, with interests split down the middle at 22.5 percent
apiece. The French government owns the majority of that country's
stake, with the remaining 7.5 percent owned by media group
German automaker DaimlerChrysler AG -- soon to be just Daimler
-- owns that country's full share in EADS.
EADS reported a first-quarter net loss of $13.6 million this
year, according to the WSJ, after posting a $709 million profit for
the same period in 2006. Restructuring costs are to blame for the