When Louis Gallois delivers his last financial results statement as EADS chief executive on Thursday, this life-long servant of the French state will appreciate that for once it is not his fellow countrymen sowing national discord at the Franco-German aircraft maker.
Mr Gallois was handed the controls of EADS in 2006 in part to sort out the squabbling between Paris and Berlin over who held sway at the Airbus parent, in which Germany and France each control a 22.5 per cent stake. When he leaves in June that unhappy task will be handed to Tom Enders, his German successor.
Mr Gallois and Mr Enders, who has managed Airbus, the European rival to Boeing, during the same period, have done much to ease cross-border tensions. But demands last week from a German minister that Mr Enders appoint more compatriots at the top of Airbus, backed by complaints of an “unacceptable” bias towards French management and production, shows it is a case of “plus ça change …”
For institutional investors, this latest attempt to dictate how the company is run is another distraction for senior executives, who would be better left alone to concentrate on making aircraft. “This could be about playing politics to a German domestic audience, so I’m not sure how serious these demands are,” says Sandy Morris, an analyst at Jefferies. “But from a management perspective, EADS needs this kind of thing like a hole in the head.”
Others suspect there is genuine cause for Germany to fear Mr Enders’ decision to shift the EADS headquarters from Paris and Munich to Toulouse, the home of Airbus.
“The problem for Berlin is that Airbus is seen as French – and it’s enjoying great success,” says a senior industry executive. “Germany has 80 per cent of the defence business, Cassidian, which seems to be falling further behind.”
The German intervention is galling for Mr Gallois and Mr Enders because it follows a successful 2011 for Airbus, which saw record passenger jet orders after the launch of the A320neo, a fuel-efficient version of its short-haul aircraft.
France is keeping its counsel on the German protests, but made dire warnings of its own earlier this year about the company becoming “too German” after Mr Enders’ promotion and the appointment of Harald Wilhelm, his compatriot, as finance director.
Such distractions explain why Mr Enders is desperate to cut the state holdings in EADS to make it a “normal company”, in his words.
Analysts expect operating profits for 2011 will beat the €1.3bn forecast by the company, while Mr Enders promises a “significant improvement” in earnings this year.
Investors will want reassurances about delays and cost increases on the next-generation A350 passenger jet and the emergence of wing cracks on the A380.
Since the new year, Airbus has been dogged by news stories about cracks on A380 wing components, although the company insists the jet is safe to fly.
Last month regulators ordered all A380s to be inspected for wing cracks. Fourteen of the 71 A380s in service have been found to have cracks on brackets that attach the wing’s skin to its internal structure.
Nick Cunningham, analyst at Agency Partners, describes the issue as a “good sized glitch”, but stresses that any earnings charges associated with the problem would probably be smaller than those relating to Airbus’s delayed new A350 long-haul aircraft.
“It all emphasises how the A380 is iconic – the Concorde of our time,” he says. “Anything that goes wrong makes the papers.”
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