PARIS --- The French and German governments jointly decided during the summer to replace the entire top management of Airbus, but an official announcement was being held in abeyance first until the German elections, and then until Chancellor Angela Merkel formed a new government, sources here say.
However, the process was fast-forwarded when it became clear that Fabrice Brégier, the CEO of Airbus Commercial Aircraft, might leave the company in early 2018. This prompted Airbus CEO Tom Enders to inform the French President’s office that he would not seek renewal of his contract when it ends in May 2019. Enders’ advance warning was first reported by the Paris daily Le Figaro, and was widely picked up in France.
The subject will no doubt be discussed tomorrow, as the Airbus board of directors meets for the last time this year. But big surprises cannot be ruled out, as the issue now seems to have taken on a life of its own.
Clearly irritated by these reports, Enders told Reuters through a spokesman Dec. 12 that “The decision about my future as CEO of Airbus is not taken by the French press or the French government or any government. It is taken either by the board ... or by me and ideally in consensus between the board of directors and me. My current mandate runs until April 2019 and this is the timeframe I work against.”
This morning, speaking on the sidelines of an aircraft delivery ceremony in Toulouse, Enders told Reuters that “no decision had been taken on whether he would have a third term at the helm of Europe’s largest aerospace company when his mandate expires in 2019.” Enders added “Reports of my demise are premature and exaggerated,” Reuters said.
In fact, sources say that Enders wants to personally fire Brégier, whom he holds responsible for the sales and marketing methods that led to the corruption investigations, including those by Britain’s Serious Fraud Office and its French counterpart, the Parquet National Financier. Both now threaten him as CEO.
The new management will alternate nationalities. The CEO will be French, while both his deputy and the chairman of the board will be German.
Alexandre de Juniac, the former CEO of Air France-KLM, is currently leads the list of candidates to replace Enders as CEO. Brégier is said to have agreed to join Carlos Ghosn as CEO of French-Japanese automaker Renault.
Governments push management renewal
Although the two governments are not controlling shareholders, they are Airbus’ biggest military customers. They also wield other control levers on various programs, not least the future joint European combat aircraft announced in July, which translate into significant influence.
In fact, the French and German governments’ decision was sparked by what they perceive as the continuing mismanagement of the corruption probes. Paris and Berlin have also long been dissatisfied with Enders’ continuing failure to fix recurring problems with the A400M program.
His veiled threats earlier this year to slow the program further if he did not obtain relief from the contractual fines and penalties levied for late deliveries of contractually non-compliant aircraft is the straw that broke the camel’s back, sources say.
In addition, Enders has also virtually frozen all Airbus export and marketing until the audit is completed, which has delayed or cut off many pending sales, leading to a 31% drop in orders booked during the first 9 months of 2017 compared to 2016.
The shake-out will also include Denis Ranque, the chairman of the board, who is faulted for failing to stop the corporate infighting and prevent the involvement of American lawyers.
“To save himself, Enders opened the door to American lawyers, who are legally required to report to their government any irregularity they find, and this can be used against Airbus. Ranque didn’t stop him, so both are on the way out,” one source said.