may be heading for another round of leadership struggles, if shareholders fail to resolve a disagreement by Jan. 26.
The behind-the-scenes dispute arose after the French government officially asked for more time to evaluate proposals that should have been approved in December at the most recent EADS board meeting. They are now due for decisions at the next meeting, on Jan. 26. After five years, the company is due for management changes in the summer: Frenchman Arnaud Lagardere is to become EADS chairman, replacing the German Bodo Uebber.CEO Tom Enders is to replace EADS CEO Louis Gallois, and Fabrice Bregier will move to the top position at Airbus. He has been COO and will be succeeded by Guenter Butschek.
But according to several industry sources, new demands by the French side are threatening to derail the process. While the government has not officially offered any proposals, people close to the company have conveyed concerns that the next EADS CFO should be French andshould also be under German control. The current Airbus CEO, Tom Enders, plans to name Airbus CFO Harald Wilhelm as EADS CFO, and the contract of Eurocopter’s CEO Lutz Bertling has just been extended by five years. Both are German. Enders has made it clear that his position is not negotiable.
Enders’ proposed structure has been known to all participants for several months, so the new delay comes as a surprise, particularly since Gallois has been trying to reduce political influence, proposing new corporate governance regulations that would allow the core shareholders to reduce their stakes without losing influence over key strategy questions. But as part of Daimler’s exit as a shareholder, the German government has sent in state development bank KfW. It is expected to take over a 7.5% stake in EADS in the summer.
One source says the impasse is not linked to the entry of KfW, which could be seen as a reinforcement of German government influence in the company.
Several officials close to EADS say there is a suspicion inside the company that Gallois himself could be behind the problems. He, they claim, could have a personal agenda and may himself be interested in becoming EADS chairman. But Gallois says it is not “probable” he would be on the future board, noting no decisions have been taken.
Lagardere has said he will take the job in spite of the fact that he plans to sell his EADS stake once Airbusdeliveries have started. In the past, he has shown little enthusiasm for the group, having often been absent at board meetings. One source claims that the French government is unhappy with his lack of efforts and may therefore be seeking another solution. Gallois has publicly said he has no interest in becoming chairman. A move from CEO to chairman would also be regarded as being against the principles of good corporate governance.
Several officials point out that, should the issues not be resolved by Jan. 26, EADS would be facing a crisis that might only be resolved by French President Nicolas Sarkozy and German Chancellor Angela Merkel. But that would put EADS firmly back into the political arena.