Tom Enders: Europe must fight against the temptations of protectionism

More integration is the best way to meet the EU's economic challenges, the Airbus chief executive tells Sarah Arnott
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The Independent Online

The arrival of Airbus's all-new A400M military transporter in the UK for the first time tomorrow is more than just a technical triumph. The plane to be shown off at the Farnborough International Airshow next week is also testament to European political and technical co-operation.

And it nearly did not happen at all. As recently as January, Airbus chief executive Tom Enders was threatening to pull the plug on the multi-billion euro programme if the seven government customers refused to help cover a €5.2bn (£4.3bn) funding gap. Following a tentative deal in March, the scheme is back on track – although details of each country's contribution are still being thrashed out.

But the wrangling over the A400M is not just about the future of one aircraft. It is emblematic of a company that is much like a commercial incarnation of the EU itself: an impossible mix of soaring vision, competing factions and stultifying political compromise. And Mr Enders – the German national who took over three years ago – is the person who must stitch it all together. "We are dancing on a volcano," he says, in clipped but flawless English. "The volcano may be silent for a long time, and you don't know when it will erupt again."

Airbus began as a French and German government creation, later joined by the British and Spanish. It was put together in the early 1970s to take on Boeing's dominance of the aircraft market, although the listed EADS group – which owns Airbus and in which the French and Spanish governments still own shares – was only created in 2000.

The Airbus subsidiary has struggled with both internal friction between its component nationalities and the political challenge of divvying up high-value engineering work between factories in France, Germany, Britain and Spain.

The company has been highly successful. It continues to fight one of the most savage battles in commercial history, trumping Boeing for the last three years running and weathering the recent recession surprisingly well thanks to a 3,400-strong order book. But it has been a rough ride. For EADS's first seven years it even had two separate chief executives – one of whom was Mr Enders, the other Louis Gallois – to preserve the Franco-German balance. For much of this time Airbus was run "like an impregnable castle", Mr Enders says. "The attitude was very much 'close the doors, EADS is coming'." Then, in 2007, Mr Enders agreed to leave Mr Gallois as the sole boss at EADS, and take a step downwards to reform Airbus.

He is not the flashy chief executive type. Dressed with German precision, he looks more like a soldier than a businessman, with short blond hair, chiselled looks and a rather piercing, blue stare. He has a reputation for sternness, and it will have taken considerable strength of character to drag Airbus into line (not to mention to hold seven governments to ransom over the A400M). But there are flashes of humour, although often so dry that they could easily be missed.

"The immediate priority when I took over Airbus was to bring back peace into the valley," Mr Enders says of the challenge of breaking down the old local fiefdoms. Three years on, there has been enough progress for him to claim that the benefits of cross-border creative rivalry outweigh the difficulties of different language and culture. The company is even running a competition to find its best production site. "It's about sporting competition, about France trying to do better than Germany, Germany competing with Britain," Mr Enders says.

Airbus remains an unusually European entity. The headquarters and around 22,000 staff are in France, but there are another 17,000 in Germany, and 10,000 in Britain's Broughton and Filton facilities, where Airbus wings are made. "In the old days it was taboo to compare Germany with France and so on, but that's what we are trying to nurture these days," Mr Enders says. But these are strong forces to play with. "Sporting competition is only a problem when it becomes destructive, and that is when there are national demons lurking under the surface," he says, acknowledging that things tend to become "quite heated" when politicians and the media get involved.

Some such contretemps are unavoidable, he shrugs. "Cameron, Sarkozy, Merkel and so on are there to optimise their national gains, and that is at odds with a company that is transnationally organised and trying to optimise the company."

But with the eurozone wracked by the sovereign debt crisis, national priorities are a dangerous pull towards protectionism, Mr Enders warns. Ground has already been lost. "I don't think EADS could be created now," he says, staring far away. "What was possible in 2000 is not possible in 2010, because of rising protectionism."

What Europe needs, according to Mr Enders, is the same medicine as that recently administered to Airbus. "I very much hope that the crisis convinces both the leaders and the public to have more integration rather than less," he says, making the case for the politically tricky notion of co-ordinated national budget cuts in key areas such as defence. "We should spend the little money we have left complementarily rather than in competition."

The biggest problem is that there are no leaders of the calibre of Helmut Kohl and Margaret Thatcher, leaving Europe led by politicians who chase public approval. "Our leaders are more like followers now," he says. "I don't want to pick out anyone in particular, but in general our political decision makers are more parochial today than 10 years ago."

Politically there is still hope that the crisis will shock the European establishment into a realisation of what is at stake. But there is also an immutable commercial logic at work. In the aircraft industry, Europe has no option but to stick together – even more so now the traditional duopoly of Airbus and Boeing facing challenges from the likes of Embraer and Bombardier. Add to that the massive growth of non-traditional markets – particularly in the Middle East and Asia – and there is no alternative but to stick together. "Even the most nationalist of thinkers don't propose to undo the integration of EADS and Airbus," he says. "Could we really renationalise and fragment our industry in the face of globalisation and rising competition from Asia? No way."

It is a complex background against which to wrestle with the A400M. And the military transporter has not been Airbus's only technical hitch. The group has no less than three new development programmes: the A400M, the A380 superjumbo which is now ramping up production, and the A350XWB set to go into service in 2013. All three have suffered from delays and spiralling costs and Mr Enders admits the company has been weighed down by an excess of developments of new generation aircraft that he describes as "a perfect storm in terms of the risk premium".

"I'd like to avoid brand new developments in my tenure," he says firmly. "Aviation is a wonderful business, if it wasn't for the development of new programmes." It is definitely a joke, albeit a serious one.

Up, up and away: Tom Enders – CV

2007-present Airbus chief executive

2005-07 Joint chief executive of EADS

1991-2005 After nine years at Dasa, Mr Enders was made chief executive of EADS's defence and security division when the group was created in 2000.

Mr Enders is married, with four sons, and holds a helicopter licence

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