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EADS management reshuffle after Sarkozy and Merkel meetnews
17 July 2007

A radical management reshuffle at EADS, parent company of aircraft manufacturer Airbus Industrie, will see Frenchman Louis Gallois become sole chief executive and German Tom Enders, now co-chief executive, move to head Airbus. This puts an end to the cumbersome two-headed management structure of the Franco-German group. The decision was taken at a meeting between French President Nicholas Sarkozy and German Chancellor Angela Merkel at Airbus headquarters in Toulouse.

The changes will also see German co-chairman Rudiger Grube become sole chairman, to give the company ''a clear structure''. While Enders said he would have "no problem" in reporting to his new boss and former peer, Gallois, the move is a surprise. Till late last week, German officials had expected Enders, a defence specialist with little experience at Airbus, to remain chief executive, though they said this appointment depended on the French.

The French government — which holds 15 per cent — and media group Lagardère, which holds 7.5 per cent of EADS, were at odds over the French candidate for chairman, a position current co-chairman Arnaud Lagardère wanted to keep. The German government as well as carmaker Daimler, which control 22.5 per cent of the aerospace group, feared Sarkozy was trying to oust Lagardère in order to increase state control over EADS, which the Germans have always resisted.

Officials on the German side were keen on Monday to portray Enders'' demotion as a concession — to pre-empt French criticism of Sarkozy, who had called for a root-and-branch reform of EADS during the French presidential election. As Airbus boss, a German will be in charge of EADS'' most important unit and another German will chair the group. Mr Enders enraged French unions when he revised Airbus''s ''Power8'' restructuring programme to reduce job cuts in Germany.

But the shareholders agreed to rotate posts every five years, which means that a Frenchman will take charge of Airbus in 2012 and another will become chairman of EADS. Daimler also said shareholders agreed that "there was no need for an equity injection into the company", a setback for the French government, which has tried to persuade its partners that EADS must be given the option to issue shares.

In a bid to globalise the eleven-member top board, four new independent directors will decide strategy with three French, three Germans and a Spaniard, though France and Germany will still be able to veto key decisions. EADS shares rose 0.5 per cent on Monday to €24.09.

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EADS management reshuffle after Sarkozy and Merkel meet