EADS marked the end of an era in Paris last week when chief executive Louis Gallois presented the company's financial results for the last time before he retires at the end of May.
As announced in January - to no one's surprise - Gallois will be replaced by Tom Enders, currently head of EADS's Airbus unit. Enders, in turn, will be succeeded by Airbus chief financial officer Fabrice Brégier. Gallois will remain on the board.
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© EADS Keep the shades, Tom - it's sunny in Toulouse |
The 2011 results presentation was also the last for retiring chief financial officer Hans Peter Ring, a popular figure with analysts and journalists. His replacement is Airbus CFO Harald Wilhelm, who will hold both positions.
SAFE HANDS
This transition keeps Europe's biggest aerospace company in the familiar hands of managers who have overseen half a decade of stable growth.
It also maintains a sense of fair play; Enders and Gallois had been co-CEOs of EADS before August 2007, when the younger German effectively stepped down to run Airbus so EADS could take a momentous step on the road to normality. The company - formed in 2000 as a merger of European national aerospace champions - had until then been burdened with a two-headed management structure that saw all key roles shared by one German and one French candidate. Despite this arrangement, which could only have been dreamt up by politicians, EADS succeeded in giving Europe the industrial scale it needed to compete with America's big hitters.
The fact that large jetliners are an Airbus-Boeing duopoly is testament to that success, but EADS certainly was not succeeding because of its management structure, so the move to a normal one-boss hierarchy was overdue. But while Enders' deserved elevation can be celebrated as the first normal changing of the management guard, some moves he is thought to be preparing to normalise EADS further look set to come up against continuing Franco-German rivalry.
Enders is widely expected to try for another huge push towards normality by consolidating EADS's headquarters costs, currently spread across Paris, Munich, Madrid and, for purposes of corporate registration, Leiden in the Netherlands. Enders is thought to want to bring all management functions together in Toulouse, an idea that would fit with goals of greater integration outlined in EADS's longstanding Vision 2020 strategy.
Société Générale equities analyst Zafar Khan likes the idea, noting that EADS hardly needs, for example, four human resources offices. "As an analyst, I welcome any move that consolidates the cost base," he says.
The president of France's Toulouse-encompassing Midi-Pyrénées region went as far as to issue a statement last month proclaiming consolidation to be a brilliant idea. Enders is saying nothing publicly, at least until he takes over from Gallois, but one EADS source describes him as "open-minded about the structure of the business".
One fine point of Franco-German balance that may help Enders achieve a move to Toulouse is the fact that he and his number two, Harald Wilhelm, are Germans. Berlin can't object too much if the proposal comes from one of its own.
However, Berlin seems increasingly willing to meddle. While France holds a direct stake in EADS, Germany's balancing 22.5% share has always been held by Daimler - which wants out. Late last year, the German government put aside longstanding resistance to nationalisation by letting state-owned bank KFW buy 7.5%, and more may follow.
Meanwhile, reports have emerged that Berlin has written to Enders demanding that what it sees as an increasing French bias in management be redressed.
And Enders may have more to deal with than just German - and French - government pressure. One observer, echoing the experience of many who have dealt with both men, notes that former civil servant Gallois is modest, charming and a great politician, while former paratrooper Enders is "prickly and combative".
Personality may matter when it comes to dealing with the new chairman, Arnaud Lagardère. As chief executive of the media empire that bears his family's name and shares France's EADS stockholding, Lagardère is one of the most powerful businesspeople in France. He also has a reputation as a young playboy, and there are some who wonder if he and Enders will get along.
Source: Flight International
