Noel Forgeard, the chief executive of the Franco-German aerospace and defence company EADS, resigned yesterday, alongside Gustav Humbert, the head of its Airbus unit. The two executives are stepping down after a torrid month in which EADS announced production delays related to its Airbus A380 super-jumbo.
In a further blow last night, it was revealed that an independent valuation of Airbus by Rothschild has valued BAE Systems' 20 per cent stake in the business at ¤2.75bn (£1.9bn). BAE had hoped to receive between £3bn and £4bn for its stake, which it plans to sell to EADS. It said it would advise shareholders whether to accept a sale at that price.
The double setback will overshadow better news for EADS after it won its first significant contract with the US military in a deal worth $3bn (£1.6bn).
Louis Gallois, the 62-year-old head of the French railway SNCF, will replace M. Forgeard as co-chief executive of EADS. Mr Gallois was previously in charge of the state-owned defence company Aerospatiale before it was merged with Germany's Dasa to create EADS. Before that, he ran the French aero-engine manufacturer SNECMA.
Christian Streiff will take over Mr Gustav's role at the head of Airbus. He will report to Tom Enders, co-chief executive, who has been nominated as chairman of the Airbus shareholder committee to replace M. Forgeard.
M. Forgeard's resignation has been widely anticipated since the A380 delays were announced. The embattled French chief executive's position looked untenable after revelations that he and members of his family had made a ¤2.3m (£1.6m) profit by trading EADS shares just a month before the production delays became apparent.
M. Gallois has been parachuted into the job at the troubled company to steady the ship. He is considered to be a safe pair of hands and acceptable to the German side of the business.
The management shake-up follows EADS' first significant success in the US. EADS North America has been selected as prime contractor for the US military for the first time, a win it described as a "breakthrough". It will supply 352 light utility helicopters to the US military. The UH-145 model, a version of the EC145 used in Europe, will be produced in the US.
The US breakthrough may ease some of the pressure on EADS after a disastrous month. The company said in June that delays to the delivery of the Airbus super-jumbo would cost EADS, which owns 80 per cent of Airbus, about £1.4bn in profit over the next four years.
The bad news was compounded by suggestions that two key customers for the super-jumbo ILFC and Malaysia Airlines had threatened to cancel orders of the A380 as a result of the delays. While the US win did not come soon enough for M. Forgeard, he said: "This success confirms EADS as a respected partner of the US defence market."
In a statement, the company added: "Programmes such as the UH-145 clearly demonstrate that transatlantic defence co-operation is a win-win situation for all parties." The helicopters will be used for operations including US homeland defence and non-combat humanitarian projects.Reuse content