Sarcozy, EADS. Qu’ est-ce qu’il a les demaneaisons?

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Nicholas Sacozy may be finding that EADS and its Airbus operations are giving him a most irritating itch that refuses to go away. One of his first acts as President was to visit the Toulouse sight of Airbus. Now the earlier governance problems at EADS may be returning to chafe him, with suggestions of his own peripheral involvement.

Background

Last year, A380 project executives, including Airbus CEO Gustav Humbert, were dismissed, primarily for failure to deal effectively with the project delays. Humbert was also was accused of concealing the seriousness of the problems. In a short space of time, Humbert’s replacement, Christian Streiff resigned, and the current leader, Louis Gallois was brought in. Streiff was believed to have failed to secure backing for a financial package (The Power8 plan) he believed necessary to turn things around with the A380.

The Airbus Power8 announcement

The Airbus Power8 announcement of 28th of February indicated:

A third A320 Family FAL [Final Assembly Line] will be set up in Hamburg immediately to cope with the steep production ramp-up currently under way. This FAL will be established in already existing facilities and will have full type flexibility when demand for A320s exceeds rate 14 per month. The A320 will continue to be assembled in Toulouse up to 14 [per month]. Hamburg will also perform final assembly of the future New Single Aisle family.. Furthermore, in order to allow parts to be fitted in the most logical place to optimize the overall cycle time, some upstream preparatory A320 and A380 cabin installation work will be transferred from Hamburg to Toulouse.

Which did not prevent vigorous opposition to the plan at Toulouse, and an early problem for Nicholas Sarcozy’s Presidency.

The itch that won’t go away

Within weeks of his election, Sarco was at Toulouse. He bought some time, obtaining some wriggle room by promising to return in July with Angela Merkel, thus indicating the international dimension of the problem. But the earlier itch remains.

The French co-chairman of EADS, and known to be close to M Sarcozy has been questioned by financial investigators still exploring into alleged insider trading in EADS last year. M. Largardère, claims that he had no inside knowledge of delays in deliveries of the A380, when his family group sold off 7.5 per cent of the Franco-German planemaker’s shares in April 2006.

According to The Independent, reports from the French press, that

[S]ince taking over the family empire after his father died in March 2003, M. Lagardère has cultivated a chatty and approachable style. He has, however, been plunged into controversies. His group is one of France’s biggest media players, owning a controlling stake in Hachette-Filipacci Media, the company that owns Paris-Match. He also has smaller stakes in Le Monde, Le Parisien and L’Equipe … M. Lagardère has been accused of interfering in editorial decisions to protect his friend M. Sarkozy and especially to prevent discussion of alleged problems in the President’s [private life]. Le Monde quoted a “close adviser” of M. Lagardère yesterday as saying that “whatever happens” he will be protected by M. Sarkozy.

I took this to mean that his friend would continue to conform to the French distaste for airing the personal problems of politicians. Nevertheless, in England, The Independent’s article may be taken for evidence of a political cover-up.

The EADS itch will not be going away for the new President.

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