Musical Chairs
October 9, 2006
After only three months at the troubled European aircraft manufacturer Airbus, its French chief executive Christian Streiff, 52, has decided to throw in the towel. The European aerospace group EADS, is expected to replace Streiff, with another Frenchman, Louis Gallois, 62, who is co-chairman of the parent company, a source close to the matter told AFP.
Leading private shareholders, German automaker DaimlerChrysler, which owns 30 percent of EADS, and French media group Lagardere, have backed Streiff's resignation.
EADS owns 80 percent of Airbus but assumes full ownership later this month, after British arms producer BAE Systems formally sells back its 20 percent stake for 2.8 billion euros ($3.7 billion).
Delays to set Airbus back by two years
Gallois, who would reportedly remain EADS co-chairman in addition to heading its Airbus subsidiary, had only joined the group this past July after 10 years of heading SNCF, the French railways. French press reports say, however, that Gallois would be only an interim CEO of Airbus until Streiff's replacement is found.
According to several German press reports, Streiff had sent in letters of resignation last week to both Gallois and German co-chairman Thomas Enders. Streiff had been seeking greater autonomy in implementing his restructuring and cost-cutting plan for Airbus, after further delays in delivering its A380 super jumbo jet were announced last week.
The EADS board, however, wanted to exert greater oversight control after revelations in June of cost overruns and major delays due to wiring and software design problems, and had apparently rejected Streiff's plans. The additional delay means that delivery of the A380 would fall a full two years behind schedule, prompting several airlines to consider cancelling their orders or sue for compensation.
Airbus denies reports of Streiff's departure
Rumors that Streiff was leaving Airbus for the French automaker Peugeot were reported in the French daily La Tribune, but denied by Airbus. EADS said reports of Streiff's departure are speculation.
According to the daily Frankfurter Allgemeine Zeitung, the EADS board and Streiff had lost "mutual trust." The paper cited unidentified sources as saying that EADS had accepted Streiff's resignation without officially announcing it.
Streiff joined Airbus from the French glassmaker Saint Gobain in July, following the dismissal of his predecessor Gustav Humbert.
Proposals angered Germans
His proposal to shift all production of the A380 from Hamburg to Toulouse, France, did not sit well with the Germans. Even though production of the smaller A320 single-aisle jet would still be concentrated in the Hamburg factory, which employs 12,000 people, his plans alarmed politicians in Germany, where Airbus provides some 40,000 jobs at plants throughout the country.
Shares of EADS fell by 1.6 percent on Monday to 20.11 euros. Its shares had already fallen by 10 percent last week after announcements of further delays.
Later this week, German Chancellor Angela Merkel and French President Jacques Chirac meet ahead of a EU summit in Paris and are expected to discuss the reorganization of Airbus.