Forgeard faces axe in EADS shakeup

PARIS, July 2 (Reuters) – Frenchman Noel Forgeard was on the brink of defeat in his struggle to survive as co-chief executive of troubled Airbus parent EADS (EAD.PA: Quote, Profile, Research) on Sunday, as the firm prepared an imminent management shake-up, a source close to the talks said.

French railways chief Louis Gallois has been asked to help resolve a crisis over delays to the A380 superjumbo by replacing Forgeard, who has been trying to cling on since the delays wiped a quarter off EADS’s market value last month, the source said.

The shake-up also spells defeat for the chief executive of Airbus, Gustav Humbert, who is expected to resign as part of the changes to be announced later on Sunday, the source said.

“There will be an announcement this evening. This is the most likely outcome,” the source said, asking not to be identified.

EADS could not immediately be reached for comment, and Airbus declined to comment.

Forgeard has been under fire over delays in the long-awaited A380 aircraft and share dealings, which are being investigated by the AMF French regulator. Forgeard has denied any wrongdoing.

The industrial delays re-ignited a power battle between French and German interests in the six-year-old parent group, as well as within the French clan, in a replay of feuding sparked by Forgeard’s promotion to EADS from running Airbus a year ago.

In a major setback for Forgeard, President Jacques Chirac, a political mentor whom he had served as industrial adviser in the 1980s, signalled a withdrawal of public support a week ago.

Sources close to the talks have said German shareholder DaimlerChrysler, still angry over Chirac’s decision to impose Forgeard’s promotion on the group a year ago, had taken the opportunity offered by the crisis to call for Forgeard’s head.

PRICKLY

Finance Minister Thierry Breton has been pushing the name of Gallois, a former head of Aerospatiale, the former state-owned designer of Concorde which now makes up part of Airbus. But his original plan of bringing in Gallois as sole chairman, replacing the current two, was opposed by French shareholder Lagardere.

EADS has two chairmen and two chief executives — a Frenchman and a German in each post — to preserve a balance of power in Europe’s aerospace giant. Amid calls for a simpler structure, French Prime Minister Dominique de Villepin initially pledged to change the pact “from scratch” but backed down.

Under a 2000 shareholder pact designed to limit the influence exerted on EADS by the French government through its 15 percent stake, only Lagardere and DaimlerChrysler can propose key nominations which the Paris government can accept or reject.

Chirac’s support had been decisive in winning Forgeard promotion to his current job a year ago.

Relations between Forgeard and his quietly spoken former number two at Airbus, Gustav Humbert, have also appeared prickly and Airbus seemed furious when Forgeard diverted blame onto his former teams in Toulouse, southwest France, for the A380 crisis.

The management shake-up is aimed at restoring some stability to Airbus as it prepares to relaunch the slow-selling A350, possibly renaming it the A370, before the Farnborough airshow in mid-July. The potential market for the roughly 300-seat jet is many times bigger than the A380 and is dominated by Boeing.

Among those reported as possible successors to Humbert is Fabrice Bregier, the head of EADS’s Eurocopter division which announced a breakthrough into the U.S. defence market on Friday.

Gallois’ most likely successor at the SNCF railways, a sensitive post in the run-up to French elections next year, is former EDF power utility chief Francois Roussely, according to French industry sources.

(Additional reporting by Benoit Van Overstraeten)

Advertisements
This entry was posted in industry_eco. Bookmark the permalink.

Leave a Reply

Please log in using one of these methods to post your comment:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s