Noël Forgeard is fighting to restore his credibility as co-chief executive of EADS after a drop in the company’s share price, loss of confidence by key shareholders and anger from Airbus co-owner BAE Systems over the timing of an announcement of a further slip in Airbus A380 deliveries.
EADS shares lost a third of their value in a day’s trading, dipping below 19 on 13 June, after EADS said it expected a shortfall of around 500 million ($632 million) per year in earnings between 2007 and 2010.
Arnaud Lagardère, co-chairman of EADS, has warned that the company faces a “major crisis” and insists that he and his German counterpart Manfred Bischoff were “very surprised” by the delays. He has called for further investigation into whether Airbus chief executive Gustav Humbert was aware of the problem.
Former Airbus chief executive Forgeard has hit back at accusations that he knew about the delays before he sold shares in March, admitting that he had become aware that there could be an issue with the electrical harnessing in mid-April.
Media group Lagardère halved its stake in EADS to 7.5% in April but insists that the sale was part of its long-term strategy.
French stock market regulator AMF says it has been investigating EADS share price movements for several weeks and will examine the most recent developments as part of this investigation.
EADS says that as soon as Airbus had fully investigated the issues, through management consultancy Mckinsey, it informed shareholders.
BAE Systems, which is selling its 20% stake in Airbus to EADS, reacted angrily, saying it learned of the delays only last week, and questioned EADS’s ability to estimate the loss of earnings. BAE says it “does not believe any credible...assessment of the likely financial impact...can be made today”.
BAE has exercised its put option to sell its Airbus stake at a price agreed with EADS, or set by an independent bank. EADS’s share price will be taken into account.
Deutsche Bank analyst Ben Fidler says: “The issue with BAE seems to be...about their questioning of the credibility of EADS’ estimated cost impact. BAE’s statement highlights that no numbers have yet been approved by, or even presented to, the Airbus Shareholder Committee. It would not be wise of EADS in the long-run to deliberately overstate the financial impact of the A380 delay.”
Source: Flight International
