Future of Franco-German pact at heart of EADS put under question by top French ministers

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The possibility of a heavier French state control over Airbus emerged yesterday after the country's finance minister joined other top politicians in calling for a renegotiation of the Franco-German pact splitting control over EADS equally.

Thierry Breton is meeting co-chairman of EADS Manfred Bischoff today to discuss comments he made to French parliament yesterday during a heated debate over the current crisis facing the Airbus parent company caused by delays to the A380 programme and a series of scandals.

Currently the control of EADS is set by a deal signed between the French and German governments, establishing joint management. This sets out the appointments of senior board members from each country as well as assigning workshare.

Breton suggested that this pact could be revised to allow the French state, which owns two-thirds of French owned stock in the company through its 15% shareholding (compared with 7.5% owned by media group Lagadère which together match the 22.5% owned by German automotive giant DaimlerChrysler) to take a more hands-on approach to management.

French public opinion has been angered by the "Anglo-Saxon" nature of the insider-trading allegations made by small shareholder group Appac against senior EADS executives including co-chief executive Noël Forgeard. Left-leaning daily newspaper Libération today suggests that if the pact were changed, it could allow the French government to run the business more effectively.

Under secret French plans understood to be being discussed today, once the acquisition by EADS of BAE Systems' 20% stake in Airbus is completed, the additional top layer of management would be dissolved.

Breton's German counterpart, Michael Glos has reportedly reacted angrily to the comments, which were reinforced by Guy Teissier, chairman of the French parliament’s defence committee, with the economics ministry in Berlin saying renegotiation of the pact "cannot be put into question".

Thomas Enders, Forgeard's partner as chief executive, is not under suspicion in the share trading scandal and Libération suggests the French government is trying to head off a situation in which the German would win the "moral" leadership of EADS.

Several leading opposition figures in France, along with sections of the media have called for Forgeard's resignation and Breton refused to publicly back Forgeard on French radio yesterday and speculation is mounting that he could be forced to resign as the scandal mounts. EADS board member Louis Gallois, currently chairman of French railways SNCF and previously Aérospatiale chief executive, has been rumoured as a possible replacement.