Airbus is arguably the world's most successful maker of civil airliners. Eurocopter is the unquestioned world leader in civil rotorcraft - a relentless innovator in control of half the global market. Astrium's Ariane rockets are supremely reliable heavy lift workhorses, and its spacecraft do everything from resupplying the International Space Station to unravelling the mysteries of the solar system and deep space. So why is parent company European Aeronautics Defence and Space (EADS) struggling to find investors?
True, EADS is not especially profitable - and its dividends a bit meagre - but it's cash-rich, has a credible long-term restructuring and growth plan and its shares are comfortably outperforming markets. Its civil products are in great demand in every emerging market and its military aircraft are looking like export winners.
But, alas, EADS suffers from what a pessimist might call an irreparable birth defect. The company was created a decade ago by European politicians and business leaders with the vision to recognise that collaboration between national champion companies was no longer enough to guarantee the survival of a European aerospace industry.
A radical consolidation was needed to thrive in an increasingly global marketplace that demanded speed, as well as technological and financial scale.
The result - EADS - has been a resounding triumph. Except - the politicians failed to see that their job was done 10 years ago.
Berlin and Paris meddle less than they used to - overtly political France-Germany workshare deals at Airbus are mostly a thing of the past - but the two governments remain like unwelcome guests who just can't see that they're spoiling the party.
Directly or through proxies, Berlin and Paris hold nearly half of EADS's shares in carefully agreed balance, both to prevent the other side from dominating workshare and to protect this great European industrial institution from hostile takeover. Those concerns may have some merit, but to confront them by owning a huge percentage of the company has been destructive.
It is no surprise that other investors are staying away for fear of government meddling. The management has been all but begging its government shareholders to get out and leave the company to look after itself - a plea that should be heeded quickly.
EADS is a hugely innovative, ambitious and well-run company. Imagine how much more successful it would be if management weren't forever looking over its shoulders to gauge the reaction of the politicians? Who's in charge here?
Source: Flight International
