At the beginning of the week, the European Aeronautic Defense and Space Company, EADS, ended the era of bi-national joint leadership with the reorganization of its management and leadership structure, a deal concluded after fierce German-French power struggles. Louis Gallois, of France, will assume the position of EADS' sole CEO. His former co-CEO, Thomas Enders, of Germany, is now heading the aviation subsidiary Airbus. Another German, Rüdiger Grube will assume the position of sole Chairman of the Board of Directors.[1]
Powerful Figure
The new management and leadership structure is decisively strengthening Germany's position inside EADS. Paris was not able to prevent Germans from assuming the positions of Chairman of the Board of Directors and of CEO of Airbus. Airbus is by far the most lucrative EADS subsidiary. The German press commented on the new constellation that "Gallois is being hemmed in by German managers". Even though the French Gallois is sole CEO, "as supervisor, Rüdiger Grube will keep him under close surveillance."[2] Besides, Enders' top position at Airbus is hardly less influential than that of CEO at EADS, because the subsidiary's transactions make up 70% of the EADS total. The increase of German influence is also seen as such by the German government. According to Peter Hintze, Parliamentary State Secretary in the German Ministry of Economics and the German Government's Co-ordinator of Aerospace Policy, the CEO of Airbus "is quite a powerful figure." "And this gives Germany more influence over the company than ever before in the company's history."[3]
Bit by Bit
While German government is gloating, France is worrying about the growing German hegemony over EADS. The European shop committee at Airbus Aircraft Company notices an imbalance inside the corporation. Jean-François Knepper, vice shop chairman criticizes this development. Through political pressure, exerted over the years, Germany has been able to increase its influence, power and leadership positions "bit by bit." "The Germans are in the process of usurping none other than the aerospace as well as the European defense industry."[4]
Golden Shares
Notwithstanding the helpless criticism emanating from France, the German government has embarked upon its next thrust. With the so called "Golden Shares," Berlin is trying to obtain new means of influence over EADS. Holders of these shares will have significantly more rights, than other share holders. The German and French governments would have veto rights in important strategic questions. Paris realizes that this German proposition is another attempt to deprive the French state holding of its the basis of legitimacy and is giving a negative responce.[5] Christine Lagarde, the French Finance Minister recently declared that the question of the "Golden Shares" is not on the agenda. The German Chairman of the Board of Directors of EADS, Rüdiger Grube, disagrees and announces that in the months to come, a company working group will examine the implementation of the German proposal and will present its findings by Mai 2008, at the latest.[6] The German government's coordinator, Peter Hintze, is "optimistic" that an agreement on the regulation, presented as an alleged protection mechanism against hostile take-over, can soon be reached with the French party.[7]
New Giant
The German government is also trying to strengthen its position with its Airbus austerity program. Berlin was successful in the German-French power struggle over the company's reorganization. Important production and research branches will remain in Germany, whereas France will be confronting a significant loss of employment.[8] Three German Airbus plants - Nordenham and Varel in northern Germany, which are producing parts for civilian and military jets, and the huge military plant in Augsburg - are combining to become one of the world's leading manufacturers of aircraft parts. The new giant focusing on the production of Airbus fuselage sections would reach an annual turn-over of about 1 billion Euros and would have about 6,000 employees in the 3 plants.[9]
German Solution
A struggle is already looming between German and US enterprises bidding for this future mammoth German Airbus.[10] "Concerning the sales of plants in Germany, (…) I do prefer a national solution," declared Hintze, the government's coordinator.[11] The representatives of the employees are supporting this demand. EADS shop chairman, Rüdiger Lütjen is demanding that a "strong German partner" be favored for the plants' sale: "We would prefer a German solution in a single hand."[12]
Strategic Partners
The German Russia cooperation in the aerospace industry is also weakening the French position within EADS. In spite of criticism from the USA and the resistance of several EU-member states, Berlin is pushing for cooperation with Moscow.[13] At Germany's request, Moscow has already acquired about 5% of EADS' shares and is seeking to be recognised as a "strategic partner".[14] At the recently concluded International Aviation and Space Salon MAKS near Moscow, the new Airbus CEO, Thomas Ender, declared that the German-French company is prepared in principle to buy into the state-owned Russian holding OAK. OAK is a fusion of the largest aircraft manufacturers in Russia and is expected to compete with the US manufacturer, Boeing.[15]
Signs of Strength
The International Aviation and Space Salon MAKS demonstrates that European-Russian cooperation is mainly serving the interests of German industry. The participation of the German aerospace industry was more extensive than ever before. Almost half of the non-Russian exhibitors were from Germany.[16] "This is a very pleasant development and it shows the attractiveness of the Russian market for German industry and the promising prospects of cooperation," declared Dietmar Schrick, secretary general of the presidium of the German Aerospace Industries Association (Bundesverband der Deutschen Luft- und Raumfahrtindustrie - BDLI). "It also shows the strength and expansion potential of the German aerospace industry."[17]
Considerable Potential
The cooperation is avowedly also aiming at military application of space aviation. The European Space Agency ESA, in which Berlin has already secured for itself decisive control over important military projects, has signed a contract in Moscow with the Russian Federal Space Agency Roscosmos on the joint production of a spacecraft for flights around the earth, to the moon and to Mars.[18] At the same time the commander of the Russian space troops, General Vladimir Popovkin declared that in the future Russia would use its manned space flights also for military purposes: "We will think about how the military can profit from manned space flights."[19] The German military, industrial managers and political advisors have also been intensively contemplating how space travel can be used by the Bundeswehr (German military) for interventions around the world. Result: for combat outer space offers "enormous potential."[20]
[2] Daimler-Chrysler stärkt Macht bei EADS; Frankfurter Rundschau 16.07.2007. Deutsche Manager nehmen Gallois in die Zange; Spiegel online 16.07.2007
[3] Hintze sieht deutsche Position bei EADS gestärkt; www.dradio.de 17.07.2007
[4] Franzosen fürchten nun deutsche Übermacht; Die Welt 16.07.2007. "Einfluss, Macht und Führungspositionen ergattert"; Süddeutsche Zeitung 17.07.2007
[5] Deutschland will Veto-Recht bei EADS; Die Welt 18.07.2007
[6] EADS schützt sich mit "Goldener Aktie"; Financial Times Deutschland 27.08.2007
[7] Berlin will EADS rasch schützen; Handelsblatt 27.08.2007
[8] see also Interessen gewahrt
[9] EADS will Werke in Konzern bündeln; Financial Times Deutschland 13.08.2007
[10] Industrie ringt um Airbus-Werke; Handelsblatt 23.08.2007
[11] Hintze sieht deutsche Position bei EADS gestärkt; www.dradio.de 17.07.2007
[12] Airbus-Werke sollen in deutscher Hand bleiben; Tagesspiegel 11.07.2007
[13] see also Unheilvoller Schatten, Krieg and Irritationen
[14] "Wir wollen einen Durchbruch"; Spiegel online 20.08.2007
[15] EADS öffnet sich dem Werben der Russen; Spiegel online 22.08.2007. EADS prüft Einstieg bei neuer russischer Flugzeugbau-Holding; Handelsblatt 22.08.2007
[16] Luftfahrtmesse in Russland: Made in Germany auf Erfolgstour in Russland; Spiegel online 22.08.2007
[17] BDLI: Deutsche Industrie stark wie noch nie auf der MAKS vertreten; www.bdli.de 19.08.2007
[18] Russland will zum Mars fliegen; Tagesspiegel 22.08.2007. See also Krieg aus dem All
[19] Russland stellt die Weichen für seinen Weg ins All; Die Welt 23.08.2007
[20] see also Astronaut in Uniform
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