"Every day we have a disagreement is a good day for Boeing," says EADS chairman

As Rudiger Grube prepares to take over as EADS’s first sole chairman, we publish an English translation of an in-depth interview he gave to French newspaper La Tribune.

Grube reveals that the company has set up two working groups to address the question of the Franco-German shareholder balance, as well as the issue of “undesirable” potential investors. Grube also discusses how his new role will fit into the new organisation of the company.

The full text of the La Tribune interview in French can be found here

La Tribune: You have agreed on a new management structure. Is EADS now on its way to becoming a company like any other?

Rudiger Grube: EADS is a normal company with a normal governance. We are equipping ourselves with a management structure that will allow it to be more efficient, less unwieldy, and more transparent.

Today we have a team of managers who have known each other for a long time and who know how to work together. I have known Louis Gallois for more than 15 years, since he was chief executive of Aerospatiale and I was assistant to the chief executive of Airbus Deutschland.

I’ve known Tom Enders for almost the same length of time. He followed me into several roles at DASA, the aerospace branch of Daimler which was merged into EADS.


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I am going to be the sole chairman of the board of directors, so my role from now on will be to defend the interests of all shareholders, and no longer just the interests of the German shareholders.

We therefore now have within our grasp the conditions to turn EADS into a company that performs. And don’t forget that every day we have a disagreement is a good day for Boeing. On the other hand, every day that we’re pulling together is a good day for EADS.

LT: But the people in charge haven’t changed. The unions are asking themselves what is really going to change within EADS, and whether the quarrels will continue?

RG: Each person has his own unique responsibilities and this is a very important element even as we maintain continuity within the organisation. And we have been able to choose managers on the basis of their own qualities, even if we have also maintained a balance of nationalities at the top management level.

LT: Certain analysts have criticised this Franco-German balance for not simply taking into account ability.

RG: The evolution of EADS is taking place in three phases. During the first phase, after its creation in 2000, a dual management structure was vital to allow for the integration of the businesses.

Seven years later the group is mature enough to take on a single management structure. But it also needs the confidence of its teams, and it is important that the four key roles in the group are balanced between French and German nationals.

In a future phase we will be in a position to choose the best person for each job, as by then it will be the chairman and the chief executive who will propose their successors to the board.

The phase in which the French shareholders choose the French executives and the German shareholders choose the German ones is over.

LT: Haven’t you decided on the idea an exchange of responsibilities based on nationalities in five years’ time?

RG: We have discussed it. Having said that a balance between nationalities is important, that is only because of the very nature of our activities. Customers of one part of EADS’s portfolio, namely the defence, security and satellite activities, are governments.

LT: Why did you not take advantage of the change over of chief executives two years ago to modify the governance and decide on a single management structure, as some French managers wished at the time?

RG: We did discuss it two years ago. But from a political point of view, we were not ready. I must praise the French president, Nicolas Sarkozy, for his will to reform.

Along with German chancellor, Angela Merkel, and the private shareholders, he has helped the outcome of the situation. The negative experiences about management as well as the argument between shareholders about dividends over the last two years were necessary to make everyone understand the urgent need for a change in management structure.

It is an immense victory for Franco-German friendship and for European aerospace, which has always been supported by the French-German axis.

LT: You were co-chairman. You will become sole chairman in the autumn. What will change in your role?

RG: My role will be to supervise and back up the chief executive’s work in the name of all the major shareholders. The chief executive will be in charge of contact with the smaller shareholders and institutions.

I will travel to France regularly, and will regularly visit different on-site activities to discuss strategy because I will be the president of this new strategy committee that we will put in place within the board of directors.

EADS’s executive president will also take part, as will a Sogeade representative, a Daimler representative and an independent representative of the board.

In the future the board will include eleven members. In addition to the chairman and the chief executive, there will therefore be two Daimler representatives, the same for Sogeade, a Sepi representative and four independents.

Another change is the structure of the audit and income committee, which already exists, but will be presided over in the future by an independent representative.

LT: How will you recruit these independent members?

RG: The chairman and the chief executive will suggest candidates to the board according to their skills and their diverse characteristics.

During the shareholders’ meeting which will take place in the autumn, the shareholders will approve our choices. We have agreed on a certain number of precise criteria to which they must agree: international experience and experience in the aerospace sector, integrity, credibility, ethics, experience as head of a company or former member of government.

And we do not wish to recruit solely French and German nationals. All the details of this week’s agreement have been set out in an appendix that will be added to the shareholders agreement signed in 2000.

LT: How long is your contract?

RG: Five years, like that of the chief executive. But after three years the continuation of our contracts will be subject to a vote of confidence by the board of directors.

LT: When does the new organisation come into force?

RG: We are in the process of checking if we need to wait for the shareholders’ meeting which takes place in the autumn or if we can go ahead with a transition phase.

LT: Will EADS be able to allow itself the luxury of having three bases in Amsterdam, Paris and Munich?

RG: That is a question of detail. There are more urgent things.

LT: There is a question of going still further in reforming the shareholders’ agreement. What have you decided?

RG: We have agreed to create two working groups. One is tasked with thinking about the structure and balance of the shareholding in the medium term, the other with how we can protect ourselves in the face of undesired shareholders.

LT: By when do you want to decide?

RG: It is too soon to say but be sure that we want to come to a conclusion quickly.

LT: And will the German government have a right to look into it?

RG: No. The German government was only consulted during the negotiations over the last few weeks. But it is not a shareholder.

It only has the right of pre-emption from June 2010 on Daimler’s shareholding, in the event that the company wants to dispose of its holding.

LT: And the French state?

RG: The French and German shareholders have reciprocal rights of pre-emption on each other’s participation.

LT: Will the proposals which these two working groups are formulating lead to the definition of a new shareholder agreement or will they only lead to a further amendment, should modifications be necessary?

RG: The agreement is not time-limited. If changes arise, such as those that we have just decided, we can add an addendum.

LT: Over recent years, Daimler has given the impression that it wants to dispose of its interest in EADS as quickly as possible. Jurgen Schrempp snubbed the presentation of the A380 in Toulouse, which brought together the heads of all of Airbus’ other partners. On Monday Dieter Zetsche was in Toulouse alongside Nicolas Sarkozy and Angela Merkel. Now that Chrysler is going to regain its independence, is EADS regaining its prestige or is it still a financial participation?

RG: I am EADS chairman. This clearly proves that Daimler is completely involved in EADS.

LT: Lately there have been numerous criticisms of Lagardere and Daimler over their wanting to play God without really engaging, because the two groups sold some of their shareholding at the top end of the market, just before the A380 setbacks became known. Is it not harmful for this decision making power to be held by parties with only 15% of the capital?

RG: That is an inaccurate argument. French and German companies and the French and Spanish States hold 50.5% of the capital in total. That is not a minority.

LT: But you weren’t even able to reach a dividend agreement during the last general assembly.

RG: I hope that this will not be repeated in the story of EADS.

LT: Is Frecnh prime minister Nicolas Sarkozy hoping for the entrance of new shareholders into EADS?

RG: We are obviously open to new shareholders. Dubai has just come in, like the Russian bank…but this in no way calls into question the shareholders’ agreement.

LT: And how did you settle the question of a capital increase?

RG: EADS is a healthy company, which today has absolutely no need for capital. Obviously we discussed this aspect over the last few days. But we unanimously concluded that currently the company has no need for fresh capital.

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