Crisis at Airbus as chief quits after only 100 days

Click to follow
The Independent Online

Christian Streiff resigned as chief executive of the embattled aircraft manufacturer Airbus yesterday, only 100 days into the job.

He blamed his departure on too much interference from Eads, Airbus's Franco-German parent, which had not been prepared to devolve the level of autonomy M. Streiff believed necessary were he to successfully implement a radical turnaround plan.

Charged with reviving Airbus's flagging fortunes, M. Streiff's controversial blueprint to breathe life back into the crisis-hit company provoked political furore in Germany and resistance from the board of Eads.

Last week, M. Streiff called on Eads' board to back him or sack him. Yesterday, he told the French newspaper Le Figaro: "I progressively came to the conclusion that the governance of Airbus did not allow my plan to succeed."

Eads confirmed Mr Streiff's resignation as head of Airbus and member of the Franco-German group's executive committee with immediate effect.

Louis Gallois, the co-chief executive of Eads, will also run Airbus in M. Streiff's stead. The French civil servant was brought in this year to help bridge Franco-German divisions at Eads.

Last week, Airbus warned that delays on the troubled A380 superjumbo programme would cost it €4.8bn (£3.2bn), more than twice its initial estimate. Eads said cost overruns on the A380, the world's biggest passenger aircraft, coupled with compensation payments to customers for late delivery, would cost it €2.8bn between 2006 and 2010.

That came on top of the €2bn hit on profits Eads unveiled in June after problems with the wiring system surfaced. At that time about 25 per cent was wiped off Airbus's market value, at the cost to its then chief executive, Gustav Humbert, and Eads co-chief executive, Noel Forgeard, of their jobs. M. Forgeard, who ran Airbus for seven years, is under investigation by German and French authorities for selling shares months before Airbus disclosed problems with the A380.

Installed in July, M. Streiff had planned to turnaround Airbus and recover market share, centred on a new efficiency drive to save €5bn over the four years to 2010 to mitigate A380 losses, and €2bn a year thereafter.

He aimed to cut overheads by 30 per cent and raise productivity among its 90,000 staff by a fifth. Steep job losses looked inevitable at a company that had never previously pared its workforce in its 36-year history. The severity of his blueprint spooked politicians and workers in Germany, which faced the brunt of any factory organisation as 10 of Airbus' 16 plants are sited there.

Germany had already been affronted by suggestions from M. Streiff that Airbus technicians in Hamburg had been responsible for the faulty installation of wiring that set back the A380 two years behind schedule.

Mr Streiff echoed that sentiment yesterday, when he declared the Hamburg factory the "weak link" in A380 production.

It is understood the French government, a 15 per cent shareholder in EADS, nodded to M. Streiff's departure yesterday afternoon after previously lending him support.

A statement from Eads underlined the "unanimous support" of its directors for the Power8 cost-cutting programme and for the immediate implementation of the A380 recovery plan.

Control of Airbus has now been placed in the hands of a single French executive. DaimlerChrysler, its German shareholder, vigorously resisted a similar proposal a year ago.

The turmoil at Airbus has handed the initiative in the commercial aircraft industry back to the rival Boeing. So far this year, the US group has secured 723 orders compared with 226 for Airbus. The European company had taken more orders than Boeing in each of the previous five years.