Sarcozy finds some wriggle-room at Airbus

May 20, 2007

Early into his honeymoon period, President Sarcozy finds himself in action at the fermenting Airbus organization. Contrary to his reputation and inclinations, he finds a waiting move, buys himself some time, and preserves some of his limited options.

Airbus was always likely to be an indicator of M. Sarcozy’s presidential style. Politicians may be accused of not listening, but they do listen to the evidence provided by popularity polls, especially those connected with the votes they may be winning or losing in democratic elections.

During his own leadership campaign, his call was for a strengthening of the leadership of the company through attracting new investors to its board. This came through more clearly than his views on the difficulties facing the company, such as immediate production difficulties and the longer-term strategic and governance issues which have been the preoccupations of its chief, Louis Gallois. The plan to address these problems has led to Union unrest not only in France, but elsewhere in Europe where the plans also threaten jobs.

In an earlier post, I suggested that for all Sarco’s intentions, it is hard to see him being in a position to make a difference to Airbus, in the short-term. A gesture of masterful inaction is likely to be his best outcome at the moment.

Kissing Angela Merkel

Sarco has had to balance his new international role with his inclinations to preserve what he sees as a cherished French asset. So he has already made warm overtures to German Chancellor Angela Merkel. Hamburg’s Airbus manufacturing plant is, like Toulouse in France, facing major job-cuts. The International Herald Tribune acknowledges this as a necessity, commenting from the Toulouse:

As Louis Gallois, the French chief executive of Airbus, noted wryly in a session with reporters here , “He is kissing Angela Merkel every time they meet, but that doesn’t mean anything.”

For Gallois, a seasoned executive with ties to the Socialist Party, the election of Sarkozy injects another volatile element into what is already one of the hardest repair jobs in European industry.

The article further points out that Sarkozy has been sending out mixed messages during his campaign, leaving it unclear whether

… he is, at heart, a free-market reformer or an economic nationalist determined to prop up France’s industrial patrimony. Given his track record and the imperatives of French politics, several experts said, he is likely to be a bit of both. Sarkozy, they predicted, will give Airbus leeway to proceed with cost-cutting, while at the same time moving to strengthen France’s influence over the enterprise.

Sarco finds a waiting move

There are times in politics, when as in chess, the leader has to find a waiting move. In chess, the idea is to move without disturbing the delicate balance in a complex and dynamic situation. You do best by effectively not disturbing the status quo.

So it was in Toulouse. Facing angry Unions, represtatives of the Company’s French leadership, and the wider international press, he signals two somewhat contradictory positions. Yes, he will ‘stand by’ and ‘do his duty’ to the interests of the French employees. But in the longer term, he does not rule out selling the Government’s stake in the company.

I will return

I will return, he promises. In July. When he will be accompanied by his new friend Angela.

If not masterful inactivity, we have seen an example of how to create a little wriggle room in a tricky situation.