EADS New Chiefs Leave Airbus Hanging

Noel Forgeard, the French current chief executive of subsidiary Airbus, and Thomas Enders, the German head of the defense division at EADS, were set to replace co-CEOs Philippe Camus and Rainer Hertrich at the company's annual general meeting.

"Give us the time to find good people," EADS German co-chairman Manfred Bischoff told shareholders at the meeting at company headquarters in Amsterdam.

"There must be a boss at Airbus," French co-CEO Camus told radio BFM, voicing confidence that the group would resolve the impasse. Managing the Franco-German corporate structure "is complicated," he acknowledged, but when it happens "it works very well."

While the decision to name Forgeard and Enders as the new co-chairmen of the EADS parent company had been announced in December, French and German shareholders, each with a stake of 30 percent in the group, have yet to iron out differences on Forgeard's successor at Airbus.

Balancing nationalities

Nonetheless, two names have surfaced as the potential Airbus chief. Fabrice Bregier, the current head of Eurocopter, has the backing of German-US carmaker DaimlerChrysler, an EADS shareholder, provided he is replaced by a German at the helicopter subsidiary. In another scenario, France would agree to let Airbus fall to German leadership by giving the reins to Gustav Humbert, now chief operating officer at the Toulouse-based aircraft maker.

In the absence of consensus, one solution would be to allow Forgeard to combine his joint leadership of EADS with the chief executive's job at Airbus. But German shareholders are said to oppose such an arrangement on grounds that it violates terms of their pact. Still, the new leadership at EADS could decide to let Forgeard continue to wear his Airbus hat temporarily until agreement is reached on a permanent Airbus leader, a source close to the matter said here Wednesday.

If a German is eventually chosen to head Airbus, the announcement may not come until after a May 29 referendum on the European constitution in France in order not to aggravate French national feelings. Airbus roused French pride on April 25 in Toulouse with the successful maiden flight of its A380, the world's biggest airliner capable of carrying 800 passengers and a key arm in its battle with US rival Boeing. The French government, which is campaigning for a yes vote on the EU constitution, would prefer an announcement on the future leader of Airbus at a later date, said a government analyst who requested anonymity.

Fierce competition

The incoming Franco-German duo at EADS, Forgeard and Enders, meanwhile face dual challenges: keeping Airbus flying high against US rival Boeing and building defense business. They inherit a group that since its creation in July 2000 has dethroned Boeing on the commercial airliner market and undertaken ambitious industrial challenges, such as the Airbus A380, the world's biggest airliner, the Airbus A400M military transport aircraft, attack helicopters, missiles and satellites.

Airbus scored a watershed victory over Boeing in 2003 by delivering for the first time more commercial planes than its rival. And Airbus, which maintained its lead in 2004, intends to keep it.

The transatlantic duel is being fought against the background of the persistently weak dollar, the currency of reference in the aeronautics sector. The situation leaves the European aircraft maker, which incurs costs in euros, at a disadvantage.

Determined to break Boeing's monopoly on the 747 jumbo jet market, Airbus launched the A380 program at a cost of more than 10 billion euros ($12.87 billion). Boeing took a different tack, focusing on the long-haul, medium-capacity market with the launch of the 787 Dreamliner last year. Production is to begin in 2006, with the first flight in 2007 and first delivery in 2008. Airbus responded on that front with the A350 project.

EADS also intends to develop its defense activities, which now only represent 20 percent of the group's business.