The top four directors of EADS, the Franco-German aerospace and defence giant, met yesterday to discuss plans for overcoming the crisis facing its Airbus subsidiary as support continued to ebb away for the company's embattled co-chief executive, Noel Forgeard.
The meeting followed last week's warning from EADS that delays to the delivery of the Airbus A380 superjumbo could cost it €2bn (£1.4bn) over the next four years. EADS owns 80 per cent of the European plane maker.
An EADS spokesman refused to say whether M. Forgeard's future within the group was discussed and maintained it was not a full board meeting but a meeting to devise a response to the problems at Airbus.
EADS's profits warning and the subsequent collapse in its share price is certain to affect the valuation put on BAE Systems' 20 per cent stake in Airbus, which it is selling to the majority shareholder.
The investment bank Rothschilds was appointed yesterday to set a price for the share sale after the two sides failed to reach agreement between themselves. Rothschilds has two weeks to come up with a valuation which will be binding on EADS and BAE. EADS values the 20 per cent stake in its books at £2.4bn but BAE began the negotiations looking for a price nearer £4bn.
Yesterday's meeting in Munich brought together M. Forgeard, EADS's other co-chief executive Thomas Enders and the co-chairmen, Manfred Bischoff of DaimlerChrysler and Arnaud Lagardère of the French company Lagardère.
Under the constitution of the company, Lagardère and the French government, which has a 15 per cent shareholding in EADS, have the right to appoint its French co-chief executive. It seems to be only a matter of time before M. Forgeard is ousted or forced to fall on his sword. As the former chief executive of Airbus and now its chairman, he is seen as the executive most responsible for the production bottlenecks on the A380 programme which have caused the current crisis. One EADS insider commented yesterday: "He looks to be mortally wounded."
What remains unclear is whether the French partners in EADS will also demand a German sacrifice if M. Forgeard is forced out. The A380 débâcle has also raised question marks over the future of the new Airbus chief executive Gustav Humbert, who is German. However, there is said to be strong backing at Airbus's Toulouse headquarters for him to remain in post so that he can oversee the company's recovery.
Among those named as possible replacements for M. Forgeard are Louis Gallois, the head of the French railways group SNCF, and Fabrice Brégier, who heads EADS's Eurocopter division and was a candidate for one of the co-chief executive posts last year when it was ultimately given to M. Forgeard after a political wrangle between France and Germany.
Over the weekend M. Forgeard seemed to lose the support of the French President, Jacques Chirac. He infuriated the EADS board by ignoring a request to remain silent, instead going on French radio to defend himself and criticise other parts of the EADS group for the superjumbo problems. "It went down like a bucket of cold sick," one source said. "The management and unions at Airbus are livid and Lagardère and Bischoff are spitting blood."
Elsewhere in France, M. Forgeard faced calls to quit. François Hollande, the socialist opposition leader, urged M. Chirac to intervene and questioned whether M. Forgeard should stay. M. Forgeard has been criticised by shareholder groups over the €2.3m profit he made on the sale of EADS shares in March - a month before he now admits the company was aware of serious problems on the A380 programme.Reuse content