The Economic Affairs committee of the Senate this morning approved a report by Senators Jean-François Le Grand (UMP-Manche) and Roland Ries (Soc.-Bas-Rhin) on the current situation at EADS and the company’s future perspectives.
The authors’ report was drafted after six months of research, during which they heard testimony from numerous witnesses, and in particular:
- EADS management, including its two co-Chief Executives Louis Gallois and Thomas Enders;
- Fabrice Brégier, executive vice-president of Airbus and Jean-Marc Thomas, president of Airbus France;
- Arnaud Lagardère and Rüdiger Grube, co-chairmen of the board of directors, representing the industrial shareholders Lagardère et DaimlerChrysler;
- representatives of EADS and Airbus employee trade unions;
- Noël Forgeard, former co-chief executive of EADS;
- representatives of the State shareholders (France and Spain) and of the British government.
The authors underlined the considerable assets of EADS and Airbus, and the need to move beyond the dysfunctions revealed by the delays of the A380 program.
In the short term, the seriousness of these delays, as well as the dollar’s devaluation which has eroded the competitiveness of Airbus, make the successful implementation of the Power 8 recovery plan indispensable. In parallel, the authors believe that management should, in light of the company’s success at the Paris Air Show, act in liaison with trade unions to limit layoffs as much as possible.
In the medium term, the company should evolve towards the corporate norm, which implies going beyond national divisions and, more precisely:
- in terms of shareholders, a simplification and a clarification are required. It is necessary for the German State to have a direct stake in the capital of EADS, possibly through a “golden share” or by a modification of the Shareholders’ Pact, so as to guarantee the country’s essential interests, thereby granting the company’s management the autonomy it now lacks.
- in terms of governance, management should be reinforced by reducing the excessive power of the Board of Directors and by doing away with twin French-German management structure. In this case, there would be a single Chairman of the Board and a single Chief Executive Officer.
The authors’ other proposals are intended to reinforce Europe’s support of its aerospace and defense industry, allowing it to compete with Boeing on a level playing field.
At the conclusion of the Committee’s meeting, Messers Le Grand and Ries expressed their satisfaction that the Senate attained a consensus on their conclusions, and their hope that their report might contribute to restore confidence in this European industrial champion.