EADS: Who’s in charge

The boardroom battle at Europe's aerospace giant continues

WHAT on Earth is going on at EADS, Europe's leading aerospace group and parent of Airbus? Two board meetings in as many weeks have failed to resolve a conflict over the top management. The Paris Air Show, which opens on June 13th, will be a wonderful opportunity for EADS to show off its wares on its home turf. The new Airbus superjumbo, the A380, will make its public debut with at least one important new customer lined up; Airbus will also announce 100 orders (from Emirates and Qatar Airlines) for its new A350 long-haul medium-sized widebody, even ahead of its official launch in September.

But these positive developments cannot disguise the Franco-German power struggle at the top. Insiders say the dispute is beginning to hurt the company in the market. It is about to make important moves, such as choosing a manufacturing site in America for its proposed joint venture with Northrop Grumman to build refuelling tankers for the US Air Force - a Boeing monopoly which it hopes to break.

EADS is 30.2% owned by Daimler-Chrysler, 30.2% by the French government and the Lagardere group (about 15% each), and 5.6% by a Spanish state holding company, with the remaining 34% floated. Because of its binational structure, it has always had French and German co-chairmen and co-chief executives. The CEOs are supposed to be Noel Forgeard (hitherto boss of Airbus) and Tom Enders (hitherto in charge of the defence end of EADS). But their official appointments and the confirmation of another German, Gustav Humbert, as successor to Mr Forgeard as chief executive of Airbus, is being held up by a spat that has been rumbling on since last December. It was supposed to have been settled on June 7th at a board meeting, which was also supposed to sign off on the commercial launch of the A350.

Mr Forgeard, having failed to become sole chief executive, is trying to re-assign roles so that the exciting and profitable bits of the company - Airbus and Eurocopter - report to him, while Mr Enders (a tough ex-paratrooper) has only the weaker defence business. Arnaud Lagardere, who represents both French shareholders, has put this to the rest of the board as a non-negotiable demand. The Germans were at one point so unhappy with this that Jurgen Schrempp, chief executive of DaimlerChrysler, wanted Mr Forgeard removed entirely to be replaced by Louis Gallois, a non-executive director who used to run Aerospatiale, the French company that was folded into EADS when it was created six years ago. Mr Gallois, whose day job is running French railways, has downplayed the suggestion. This complicated, ugly quarrel makes the gap at Boeing, without a CEO since the last one quit amid a sex scandal, seem like an old-fashioned French farce.

The boardroom battle at Europe's aerospace giant EADS continues.

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