Thomas Enders Parachutes into Airbus Leadership

November 23, 2007

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Former Paratrooper Thomas Enders has hit the floor running as leader of Airbus. His new boss at EADS, Louis Gallois, may be happy to leave the German in the limelight

In the wake of recent restructuring at EADS, Thomas Enders, former co-CEO, took on an apparently lesser job as operational chief of the major manufacturing operation of Airbus. The other former co-CEO was Louis Gallois, who assumed sole leadership at EADS.

In a speech to workers at Hamburg [Thursday November 22nd 2007] Enders returned to a familiar theme, the vulnerability of the European company to the continued weakness of the American dollar.

The BBC has been presenting the story as Airbus fearing ‘weak-dollar death’

“The dollar’s rapid decline is life-threatening for Airbus [and]has gone beyond the pain barrier”

Airbus is already shedding about 10,000 jobs and selling plants as part of its Power8 restructuring plan after delays to its A380 superjumbo drove the planemaker into a loss last year. The dollar has hit new record lows against the euro this week.

Enders has taking a higher profile since taking over a new role as head of Airbus. The new structure has less of a feeling of realpolitik about it, even if the whole company had suffered for years through the tensions of Franco-German co-ownership, with minor additional support-roles from the Governments of Spain and the United Kingdom.

Background

Two stories have repeatedly surfaced in press reports. The one story examines possible malpractices within the company. The other is the competitive struggles with arch-rival Boeing for global dominance in civilian and military aircraft markets. We have followed the ebb and flow of events in earlier posts.

The situation has been brilliantly updated by the Speigel team of Dinah Deckstein and Armin Mahler in an extended interview with Enders at Airbus Headquarters in Toulouse, France.

SPIEGEL: Mr. Enders, you are the fifth CEO of Airbus in the space of only two years. As a former paratrooper, how does it feel being in the ejection seat?
Enders: When you’re going into a difficult mission as a paratrooper, you know that success is not guaranteed. The same applies in my job. As the former co-CEO of parent company EADS, I don’t exactly see Airbus as unknown terrain. In other words, I knew what to expect.

Pulling no punches, the journalists probe the potential financial irregularities, the company’s restructuring plans and production difficulties, and the possible difficulties of the relationships between Enders and Gallois. Some of the questioning produced the routine company line. The on-going enquiry was brushed aside. But some answers were more revealing. Enders spoke frankly of the political difficulties that had plagued EADS, and Airbus specifically. This was also indicated in the tardy response of production difficulties of the mighty A380. He also confronted the problems of under-investment for innovation in competitive technology, warning that the decline in the dollar plases the company in an increasingly tough situation.

SPIEGEL: The delivery of the first A380 on Monday of this week marks the preliminary end of an almost two-year cliffhanger. To complete the jet on time, employees had to be transferred to the Toulouse assembly plant from all across Europe. How much longer to you plan to produce the jet using this costly individualized approach?
Enders: The first wave of 25 planes, including the five test aircraft, will in fact be produced in what is essentially manual labor. For the second wave, a modern, harmonized IT system will be used which does, in fact, make industrial series production possible.
SPIEGEL: Your other big problem is the A350, the model that’s competing with the 787. It had to be completely revised, in response to pressure from customers. How could this happen?
Enders: It’s very simple: We had underestimated Boeing. We hope that will never happen to us again.
SPIEGEL: … Boeing seems to be playing with a better hand. Many of your plants lack the know-how to produce the new plastic fuselages in sufficient quantities and at the necessary level of quality.
Enders: Nonsense! Our plants in Stade, Nantes and Illescas in Spain have long been in command of this technology and are not in any way inferior to Boeing in this regard. But we cannot come up with the needed investment money to convert all Airbus operations to carbon fiber production. That’s why we plan to sell some of our plants to new owners.

SPIEGEL: Is there growing political pressure to award the contract to the last remaining domestic contender?
Enders: Of course, when you are dealing with national politicians there are preferences for national solutions. This is no different in Germany than in France or Great Britain. But you won’t be seeing a feel-good or cozy compromise designed to satisfy political interests, which could leave us with some big problems in the medium term.

The Gallois Enders game

Reading between the lines, Enders appears as a non-nonsense leader, more likely to demonstrate toughness, where Louis Gallois would instinctively display a more conciliatory style. This makes the German’s activities in Toulouse all the more interesting to follow. Gallois will be as comfortable out of the limelight, as Enders is in it.

SPIEGEL: Do you confront the employees with uncomfortable truths, if need be?
Enders: I happen to be someone who doesn’t beat about the bush. I like to get to the point. You will not see me changing my style now and tiptoeing around. The important issue is that people realize that I am a hands-on manager — not someone who’s interested in politics, but someone who has the company’s interests at heart

The tough and tender combination of Enders and Gallois may yet turn out to be a formidable team at EADS.

To go more deeply

As well as the informative text, Spiegel has some superb graphics.

Our earlier posts can be followed through the Airbus categories. These include The financial investigation called by Nicholas Sarcozy, and also

the corporate restructuring.


Leadership dreams, visions, and nightmares

October 23, 2007

mbeki-after-world-cup.jpgThe payoff from a vision dashed is a recurring nightmare. We examine recent sporting visions, dreams and nightmares during the Rugby Union world-cup

A glimpse of dashed dreams was transmitted around the world as the beaten English rugby team trudged up to receive their runners-up medals after defeat by South Africa. As if in a nightmare, the players trudged past the line of dignitaries, which included Presidents Sarcozy of France, the host nation, Brown of England (and Scotland and Wales), and Mbiki of South Africa. Weariness seemed to have damped-down despair and elation alike. The players just about managed perfunctory handshakes.

A few minutes later and joy overcame fatigue for the South Africans as they eventually got their hands on the trophy. The defining image was that of President Mbiki hald aloft not quite as securely as man of the match Victor Mayfield in the lineouts which he dominated throughout the game. Sorry, must make that clear: It was Mayfield who dominated the lineouts, Mbiki the political gestures, during the post-match celebrations.

The vision

The build-up to the final from had been a classical example of the way sport can tap into the deepest of group emotions. A popular upsurge in interest was captured and amplified through the obsessive reporting from Paris, where there seemed to be more former international players than members of the current squad.

The broad news story was that England would be a match for the Springboks. Most of the legion of elders suggested that England could win, if they played to their very best. Most reporters translated this as meaning that the match would be very close. Close? The South Africans had beaten England seriously in the earlier stages of the tournament.

The talisman

Yes, but that was before the team began its revival. Before its talisman Jonny Wilkinson returned to fitness. Before those nail-biting victories against Australia and then France.

The pre-match story began to make sense to me. There was something very important going in England culturally. This was one of those episodes which reveal how culture defines itself, and is itself defined. A vision is articulated.

We are the champions of the world in Rugby Union. We will remain champions for the next four years by beating South Africa.

How will it be achieved? Because we have the talisman. He who will not let us down. Jonny Wilkinson. He whose very presence will strike fear into our enemies. And so on.

Specifically there was a genuinely mimetic story to be heard. [Mimetics: The controversial of cultural transmission through ‘conceptual genes’ or memes.] It is consistent with a memetic approach that the story becomes become more consistent in its re-telling.

The replication process was helped by the intense appetite for ‘news’ from any-one. Celebrity Rugby has-beens were in demand. But so was the voice of the true supporter, the camp follower from the front-line. These were the voices from people close to the action. The real heroes were in silent preparation for the mighty battle ahead.

Someone articulated the achievement of the dream in a special way. It became the orthodoxy. It went something like this.

South Africa beat us, but that was when Jonny was injured.

They know Johnny is our match-winner and fear him.

Their fear will weaken their play and their resolve.

If we are only five or six behind with twenty minutes to go, their fear will play into our hands.

Although they will try to prevent it, the result is inevitable. Our mighty forwards will control the ball, battle forward, the ball will come out to Jonny.

Jonny will kick a drop goal.

That will confirm to the opponents that their fate is sealed.

And then we will score again and win.

The story has the power of all primitive atavistic expressions of fear and motivation. It is the verbal equivalent of the Hakas performed earlier in this and every tournament for over a hundred years by the New Zealand all-blacks. I have tried to report it accurately. Note how Wilkinson, undoubtedly the focal image within the story, changes the course of the game. But he doesn’t win it.

That’s one way in which the story has its power. History doesn’t repeat itself, but it has its powerful echoes. If the story just had the team winning by Jonny dropping a goal at the last minute, the story would lose power. ‘That’s just remembering what happened last time?’ someone might object, in the spirit of the lad shouting that the Emperor has no clothes. That was then. Here’s the new story of our destiny.

One moving, one clapping?

In the vision, fate decried only one outcome. But as someone pointed out, you may not be playing a game with one side moving and the other side clapping. Indeed, we might see all such battles as a contest between two stories, each of which has won over other stories in the run-up to battle. Eventually one vision triumphs, the other loses.

But the cultural loss is softened. There is always a way to find consolation. Victory denied, is also denial of defeat. We must have been robbed.

We was robbed

Yes. In those bitter and dark hours for English fans, there was the coda of being unfairly beaten. (How else?). In this case, it was the case of the disallowed try which would have brought the score into Jonney Wilkinson territory. The effort was disallowed by a fourth official. An Australian. Need I say more?

The other vision

There was another story developing. The South African dream went beyond winning a little golden cup. The symbolism was there for all to see. The nation had also had its earlier dream come true, as Nelson Mandela celebrated their earlier win. Then the President wore the gold and green shirt, which was previously a symbol associated with the earlier apartheid regime. This time the President wore a suit. But it was very convenient that the charismatic Mandela was ‘too ill to travel’.

The story, as was the one that England had dreamed of, was rooted in the past, but was also about the future. In South Africa, there is still a long road to travel, as Mandela would put it, to achieve the goals of one nation at peace with itself. The sporting win was recruited in the service of its cultural and political dream.

One clapping, one moving

I just remembered who used to talk about sport as a creative collaboration not a competition. It was Mark Izrailovich Dvoretsky, one of the greatest chess trainers of all time. I can’t find the reference, (yet) but he warned players against too much focus on one’s own strategy. Chess is not a game with ‘one player moving, and the other clapping’ he liked to say. That’s another quote in search of a definitive reference, as well as another example of chess as a source of strategic insights.


Sarcozy accepts need for EADS probe

October 12, 2007

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The long-running tale of malpractice enveloping EADS continues. Nicholas Sarcozy distances himself from any involvement, and calls for punishment of the guilty

Earlier posts to this blog have followed the various dismissals, resignations, restructurings, and political interventions, at EADS and its Airbus subsidiary.

This week the International Herald Tribune picked up the news agency bulletin:

“If there are people who committed fraud at EADS, judicial officials must get to the bottom of it so that we know the truth and those who behaved dishonestly be punished in proportion to what they did,” Sarkozy said. “I’ll get to the bottom of the investigation to know what the responsibilities of the state were at the time.”

While a major shareholder, the French government does not sit on the EADS board. Its interests are represented by the French defense and media conglomerate Lagardere, which holds a 7.5 percent stake.

EADS shareholders Lagardere SCA of France and Germany’s DaimlerChrysler AG announced in March 2006 that they would reduce their stakes.

There are several inter-related strands to this story. Airbus is a European flagship company with a complex governance structure through its parent EADS which involves particularly French and German Governments. The business theme is centred around the fierce competition between Airbus and Boeing products. The political theme involves unresolved bickering about the ways in which the US and European governments subsidize their commercial interests. There are additional fascinating manufacturing, logistic, and technological issues to do with creating next-generation products across multiple international sites, and meet increasingly drifting deadlines. Oh, yes, and Airbus is struggling to achieve considerable cost-cuttings with industrial relations troubles. Add to all these issues a series of allegations of corruption.

At the start of the year I attempted to tease out the killer facts in the Airbus affair. At the time, it seemed that

[In 2006] A380 project executives, including Airbus CEO Gustav Humbert, were dismissed. Humbert was blamed for the failure to deal effectively with the project delays, but also was accused of concealing the seriousness of the problems.

In the same period, it was revealed that the joint CEO of EADS, Noel Forgeard had sold EADS stock weeks before its Airbus subsidiary announced the Airbus A380 would be delayed again. M. Forgeard resigned, and the stock plummeted.

In a short space of time, Humbert’s replacement, at Airbus, Christian Streiff resigned, which was when Louis Gallois stepped in. Streiff was believed to have failed to secure backing for a financial package he believed necessary to turn things around with the A380.

In a few months, the company had begun to unravel some of its knottier problems, and achieved a more convincing organizational structure.

However, the changes left some players with lesser roles.

Arnaud Lagardère (of the media group of the same name) was French Co-chairman of EADS and seems to have been airbrushed out of the wider game. It had been muttered (especially in the French press) that he escaped scrutiny over earlier share scandals, and is ‘protected’ by Sarcozy, who was given a rather soft ride from Lagardère’s media group in his election campaign. M. Largardère, claims that he had no inside knowledge of delays in deliveries of the A380, when his family group sold off 7.5 per cent of the Franco-German planemaker’s shares in April 2006. The possibility remains that he will be in line to return to EADS in the future, when the Chair rotates from German to French hands

According to The Independent, reports from the French press, that

[S]ince taking over the family empire after his father died in March 2003, M. Lagardère has cultivated a chatty and approachable style. He has, however, been plunged into controversies. His group is one of France’s biggest media players, owning a controlling stake in Hachette-Filipacci Media, the company that owns Paris-Match. He also has smaller stakes in Le Monde, Le Parisien and L’Equipe … M. Lagardère has been accused of interfering in editorial decisions to protect his friend M. Sarkozy and especially to prevent discussion of alleged problems in the President’s [private life]. Le Monde quoted a “close adviser” of M. Lagardère [as saying that] “whatever happens” he will be protected by M. Sarkozy.

It now seems, that “whatever happens” M. Sarcozy intends to place himself hors de combat.


VW leadership troubles continue

July 20, 2007

Some stories attract international interest, while others remain almost unnoticed. Serious Volkswagen watchers will be aware of one leadership story that has not gained much international attention.

I picked up the scent of something of interest, because of a little surge of numbers of visitors to this site searching for news about the VW company. That’s when I came across a Reuters report

Volkswagen supervisory board member Guenter Lenz has resigned his seat, becoming the latest casualty of a scandal involving the use of corporate funds to bribe the carmaker’s senior labour leaders. According to a statement from the Hanover works council, Lenz told employees on Tuesday at a plant staff meeting that he would now resign his board seat and his post as the site’s works council boss after previously ceasing to actively execute his duties. The public prosecutor’s office in Brunswick accuses him of aiding and abetting fraud and partaking in parties with prostitutes paid for out of a VW slush fund. Lenz, who has also resigned from the Lower Saxony state parliament, would accept a court sentence for his wrongdoing, the Hanover works council said.

The scandal has already cost the jobs of VW management board member Peter Hartz, group works council chief Klaus Volkert, as well as a member of the German federal parliament.

The Financial Times also commented on the story. As did

Eurotribune a self-declared ‘left-leaning’ publication with communitarian goals. It writes about what it sees as unhealthy industrial arrangements in Germany’s internationals, and is particularly suspicious of the relationships between State, workers councils, and boards of organizations. It sees more trouble ahead for Volkswagen over its leadership and governance.

VW is plagued by a series of corruption scandals involving top union and work council members. Those already netted include the author and name-giver of the infamous Hartz-IV law, VW human resource manager Peter Hartz, as well as an SPD member of parliament. Now the scandal forced the resignation of Günter Lenz, who was at the same time the work council head for VW’s utility vehicle branch, a member of VW’s oversight board, and a member of the regional parliament for SPD. He is under investigation for visits to brothels on company money… Lenz denies the accusation. However, prostitutes have confirmed his story in the case of the top work council man, Klaus Volkert — who now sits in prison. The payments for the prostitutes were approved by Hartz himself.

Leadership lessons

It seems strange that this story was not been followed more closely by the international financial press. Maybe Angela Merkel and Nicholas Sarcozy have found time, in their new-found friendship, to muse over the matter as they explore the equally taxing issues of EADS governance.


The positions change on the EADS chess board

July 16, 2007

A major restructuring is announced at EADS, the parent of the high-profile Airbus organization. The complex double helix of German and French bonds has been split apart. The reconsituted entity is a more recognizable structure. Will it provide for more effective corporate governance and strategy, as it faces severe internal and external challenges?

The announcement on the EADS website was calm, hardly signifying any major changes. It all read as if everything was well-planned.

EADS shareholders have decided – together with the EADS management team – to modify the company’s current management and leadership structure. Guiding principles of the modification are efficiency, cohesiveness and simplification of EADS management and leadership structure, towards governance best practices and in the respect of balance between the French and the German shareholders. The German Government has been consulted as well.

Under the simplified management structure, EADS will be led by a single Chairman and a single CEO.

Rüdiger Grube will assume the position of sole Chairman of the Board of Directors of EADS. In this role, he will be responsible for overseeing the Group’s strategic development and dealings with its Shareholders. In particular, he will chair the newly created EADS strategic committee.

Louis Gallois will assume the position of sole CEO of EADS. In this role, he will be responsible for leading the management team in the execution of the Group’s strategy and managing the company’s interaction with public shareholders.

Thomas Enders will assume the position of CEO of Airbus in the Toulouse headquarters of the company, reporting to the CEO of EADS. He will be supported by Fabrice Brégier as COO of Airbus.

According to the BBC,

The French joint chief executive Louis Gallois will take sole charge at EADS while his German co-head Tom Enders gets the top job at Airbus.

EADS’ complex structure has been blamed for many of its recent problems.

“We need to be a normal company,” Mr Enders said.

Previously, EADS had two chairmen and two chief executives: one French and one German. Daimler executive Ruediger Grube will become sole chairman of EADS, a post he previously held jointly with France’s Arnaud Lagardere.

The implied abnormality by Enders was the double-harnesses imposed on EADS by the influences exerted by two co-chairman, and two co-CEOs This was the heritage of the company’s formation, and reflected the ‘least worse’ way of maintaining cooperation between the company’s two main national interests in France and Germany. No alternative better could be found than the structure which permitted one French and one German chairman, one French and one German CEO on the main board.

But let’s see what can be concluded beyond the formal statement:

One or two commentators suggested that the changes were not particularly unexpected. I will be charitable and suggest that those commentators must have been holding back on the outcome for some reason or other. The details are far from expected.

In ealier posts I had chronicled the various problems at EADS and its the troubles that have piled up for its major subsidiary, Airbus. The recent press reports had led me to conclude that attempts to resolve the complicated dual-management structure appear to be centering on co-chief executive Tom Enders.

Mr Enders is a controversial figure in France after he publicly criticized political interference from Paris and suggested the possibility of sensitive asset disposals. However, Daimler, the core German industrial shareholder in EADS, is determined that Mr Enders should not be sacrificed in any final deal.

Let me put a few pieces on the chessboard. Louis Gallois, head of Airbus, is widely admired, and believed to be needed to stick it at Airbus, and see though Power 8, the strategic plan to streamline the business. This is a production and commercial imperative. He is co-CEO of EADS with Tom Enders at present.

Arnaud Lagardère of the media group of the same name is French Co-chairman of EADS. His German co-chair is Rudiger Grube.

Nicholas Sarcozy and Angela Merkel are also in play, with special concerns for their national interests (and for their own political positions). EADS Shareholder DaimlerChrysler has signaled willingness to increase its holding, a positive gesture to Sarcozy who would like to reduce the holding of the French Government. DaimlerChryser’s bid is linked to their interests in keeping Tom Enders in play.

The rumors in the French press

Rumors suggest the game will involve taking Enders off the board. This has been denied emphatically by the company.

So what is ‘behind the headlines?

The company statement seems to have airbrushed out Arnaud Lagardere, the earstwhile Co-chair of EADS. Strange. So the German Rudi Grube takes over as Chair of the EADS main board. But Lagardere remains a powerful figure and shareholder. It has been suggested that he has escaped scrutiny over earlier share scandals, and is ‘protected by Sacozy, who in turn is aware of a rather soft-ride from M Lagardere in his recent election campaign. And there is the possibility that the media figure will be in line to return as sole Chair of EADS in the future, in an agreement in which the Chair will rotate from German to French holders every five years.

Another ‘solution’ left Louis Gallois as CEO of EADS and Tom Enders in charge of the subsidiary Airbus. This grants Gallois his (alleged) wish to avoid being left to sort out Airbus while answering to Tom Enders. On the other hand, the one figure widely regarded as key to implementing the Power8 plan at Airbus is Gallois, now expected to play a more political role.

The changes are sufficiently complex to warrant a working party investigating them.


The Postal Strike and the Horsemen of the Economic Apocalypse

June 29, 2007

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The twenty-four hour postal strike in the UK is the type of ‘little local difficulty’ large enough to require an immediate response from a new political leader. Even with his formidable energy, Gordon Brown could do without confronting an industrial dispute so soon into his leadership. There are echoes of the Airbus conflicts that captured the attention of Nicholas Sarcozy in the first week of his Presidency.

Why strike? Why now?

The strike, which began at 3 am on Friday June 29th 2007, involved some 130,000 members of the Communication Workers Union who have issued the following statement

The CWU’s Negotiating Team met with the Royal Mail’s Chief Executive Adam Crozier, and his Senior Management Team yesterday. The CWU reiterated to Royal Mail that it was prepared to reach an agreement that would move forward both the Union and Royal Mail’s position … The CWU impressed upon the company that there was no possibility of Royal Mail management successfully transforming the business unless both parties could reach an agreement that galvanises the workforce too. During the course of the meeting the Union set out its position and expressed its genuine concern about Royal Mail’s business plan and how it would result in a spiral of decline for the company, and the workforce … The CWU reminded Royal Mail that the Union was not alone in severely criticising Royal Mail’s business plan. A recent all-party Select Committee criticised Royal Mail’s leadership for lacking vision.

Chief Executive Adam Crozier, responded by rehashing all of his previous statements and refused to enter into meaningful negotiations with the Union.

The strike on Friday 29th June 2007, will go ahead.

Technology and jobs

The old debate about technology and jobs continues. Innovation accompanies creative destruction, like Horsemen of the Economic Apocalypse. Maybe ultimately the job losses are compensated elsewhere. Which is no consolation to threatened workers. The perceived grievances of Royal Mail workers are easy to identify. As with Airbus, competitive pressures have triggered plans to reduce costs which threaten jobs.

The Royal Mail leadership team

Royal Mail has a high profile leadership team within the UK business world. Chairman Allan Leighton has been persistently linked with stories of his intention to head a lucrative buy-out initiative. In an earlier post I noted:

Allan Leighton has an appetite for self-publicity, as inspection of the Royal Mail website reveals. He presents himself as a dynamic (and somewhat terrifying) leader. In public he attempts to soften the image by implying he is very much one of a team, operating closely with CEO Adam Crozier.

Their styles remind me of an earlier high-profile double act, Lord King and Colin Marshall at British Airways. The pugnacious King had also been confronted with an ailing BA facing vigorous competition. Like Leighton, King presided over job cuts on a similar scale, and had serious internal morale issues and Union conflicts. Colin Marshall, like Adam Crozier, had a more urbane style.

Since his arrival, the Royal Mail has cut 30,000 jobs, shut thousands of post offices, and moved away from record annual losses that had reached £1bn. The various changes have been forced through against considerable opposition internally and externally.

The changes have not resolved the fundamental problems of the corporation which remains in dire financial circumstances. It recently announced that the gap in its pension funds would be tackled by ending the corporation’s final wage pension scheme, another unwelcome move and one described as unilateral bullying by its Union leaders.

Amazon and The Economist on-line

In preparing this post, I held off from ordering a book from that well-known e-business Amazon. It could wait. Co-incidentally, Amazon could not wait for a better deal from The Royal Mail, and has recently switched a lucrative contract away. If the management’s resolve needed stiffening, that would have done the trick.

Yesterday, those nice people from The Economist sent me an email. It apologized for any inconvenience caused by today’s postal strike, pointing out that I am eligible as a subscriber to access their on-line version, if I can’t wait for the delayed delivery through the Royal Mail.

Globalization as economic apocalypse

Royal Mail employees, like the rest of us, are facing an economic apocalypse. The current wisdom of the tribe is that we are seeing consequences of globalization. My examples illustrate some of the threats and opportunities cropping up, as the horsemen of the apocalypse gallop about, and technological changes sweep the countryside.

Card-carrying optimists hold to the view that the human spirit, creativity and morally-grounded leadership will help us through the crisis.


Sarcozy, EADS. Qu’ est-ce qu’il a les demaneaisons?

June 1, 2007

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Nicholas Sacozy may be finding that EADS and its Airbus operations are giving him a most irritating itch that refuses to go away. One of his first acts as President was to visit the Toulouse sight of Airbus. Now the earlier governance problems at EADS may be returning to chafe him, with suggestions of his own peripheral involvement.

Background

Last year, A380 project executives, including Airbus CEO Gustav Humbert, were dismissed, primarily for failure to deal effectively with the project delays. Humbert was also was accused of concealing the seriousness of the problems. In a short space of time, Humbert’s replacement, Christian Streiff resigned, and the current leader, Louis Gallois was brought in. Streiff was believed to have failed to secure backing for a financial package (The Power8 plan) he believed necessary to turn things around with the A380.

The Airbus Power8 announcement

The Airbus Power8 announcement of 28th of February indicated:

A third A320 Family FAL [Final Assembly Line] will be set up in Hamburg immediately to cope with the steep production ramp-up currently under way. This FAL will be established in already existing facilities and will have full type flexibility when demand for A320s exceeds rate 14 per month. The A320 will continue to be assembled in Toulouse up to 14 [per month]. Hamburg will also perform final assembly of the future New Single Aisle family.. Furthermore, in order to allow parts to be fitted in the most logical place to optimize the overall cycle time, some upstream preparatory A320 and A380 cabin installation work will be transferred from Hamburg to Toulouse.

Which did not prevent vigorous opposition to the plan at Toulouse, and an early problem for Nicholas Sarcozy’s Presidency.

The itch that won’t go away

Within weeks of his election, Sarco was at Toulouse. He bought some time, obtaining some wriggle room by promising to return in July with Angela Merkel, thus indicating the international dimension of the problem. But the earlier itch remains.

The French co-chairman of EADS, and known to be close to M Sarcozy has been questioned by financial investigators still exploring into alleged insider trading in EADS last year. M. Largardère, claims that he had no inside knowledge of delays in deliveries of the A380, when his family group sold off 7.5 per cent of the Franco-German planemaker’s shares in April 2006.

According to The Independent, reports from the French press, that

[S]ince taking over the family empire after his father died in March 2003, M. Lagardère has cultivated a chatty and approachable style. He has, however, been plunged into controversies. His group is one of France’s biggest media players, owning a controlling stake in Hachette-Filipacci Media, the company that owns Paris-Match. He also has smaller stakes in Le Monde, Le Parisien and L’Equipe … M. Lagardère has been accused of interfering in editorial decisions to protect his friend M. Sarkozy and especially to prevent discussion of alleged problems in the President’s [private life]. Le Monde quoted a “close adviser” of M. Lagardère yesterday as saying that “whatever happens” he will be protected by M. Sarkozy.

I took this to mean that his friend would continue to conform to the French distaste for airing the personal problems of politicians. Nevertheless, in England, The Independent’s article may be taken for evidence of a political cover-up.

The EADS itch will not be going away for the new President.


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