In the wake of recent restructuring at EADS, Thomas Enders, former co-CEO, took on an apparently lesser job as operational chief of the major manufacturing operation of Airbus. The other former co-CEO was Louis Gallois, who assumed sole leadership at EADS.
In a speech to workers at Hamburg [Thursday November 22nd 2007] Enders returned to a familiar theme, the vulnerability of the European company to the continued weakness of the American dollar.
The BBC has been presenting the story as Airbus fearing ‘weak-dollar death’
“The dollar’s rapid decline is life-threatening for Airbus [and]has gone beyond the pain barrier”
Airbus is already shedding about 10,000 jobs and selling plants as part of its Power8 restructuring plan after delays to its A380 superjumbo drove the planemaker into a loss last year. The dollar has hit new record lows against the euro this week.
Enders has taking a higher profile since taking over a new role as head of Airbus. The new structure has less of a feeling of realpolitik about it, even if the whole company had suffered for years through the tensions of Franco-German co-ownership, with minor additional support-roles from the Governments of Spain and the United Kingdom.
Two stories have repeatedly surfaced in press reports. The one story examines possible malpractices within the company. The other is the competitive struggles with arch-rival Boeing for global dominance in civilian and military aircraft markets. We have followed the ebb and flow of events in earlier posts.
The situation has been brilliantly updated by the Speigel team of Dinah Deckstein and Armin Mahler in an extended interview with Enders at Airbus Headquarters in Toulouse, France.
SPIEGEL: Mr. Enders, you are the fifth CEO of Airbus in the space of only two years. As a former paratrooper, how does it feel being in the ejection seat?
Enders: When you’re going into a difficult mission as a paratrooper, you know that success is not guaranteed. The same applies in my job. As the former co-CEO of parent company EADS, I don’t exactly see Airbus as unknown terrain. In other words, I knew what to expect.
Pulling no punches, the journalists probe the potential financial irregularities, the company’s restructuring plans and production difficulties, and the possible difficulties of the relationships between Enders and Gallois. Some of the questioning produced the routine company line. The on-going enquiry was brushed aside. But some answers were more revealing. Enders spoke frankly of the political difficulties that had plagued EADS, and Airbus specifically. This was also indicated in the tardy response of production difficulties of the mighty A380. He also confronted the problems of under-investment for innovation in competitive technology, warning that the decline in the dollar plases the company in an increasingly tough situation.
SPIEGEL: The delivery of the first A380 on Monday of this week marks the preliminary end of an almost two-year cliffhanger. To complete the jet on time, employees had to be transferred to the Toulouse assembly plant from all across Europe. How much longer to you plan to produce the jet using this costly individualized approach?
Enders: The first wave of 25 planes, including the five test aircraft, will in fact be produced in what is essentially manual labor. For the second wave, a modern, harmonized IT system will be used which does, in fact, make industrial series production possible.
SPIEGEL: Your other big problem is the A350, the model that’s competing with the 787. It had to be completely revised, in response to pressure from customers. How could this happen?
Enders: It’s very simple: We had underestimated Boeing. We hope that will never happen to us again.
SPIEGEL: … Boeing seems to be playing with a better hand. Many of your plants lack the know-how to produce the new plastic fuselages in sufficient quantities and at the necessary level of quality.
Enders: Nonsense! Our plants in Stade, Nantes and Illescas in Spain have long been in command of this technology and are not in any way inferior to Boeing in this regard. But we cannot come up with the needed investment money to convert all Airbus operations to carbon fiber production. That’s why we plan to sell some of our plants to new owners.
SPIEGEL: Is there growing political pressure to award the contract to the last remaining domestic contender?
Enders: Of course, when you are dealing with national politicians there are preferences for national solutions. This is no different in Germany than in France or Great Britain. But you won’t be seeing a feel-good or cozy compromise designed to satisfy political interests, which could leave us with some big problems in the medium term.
The Gallois Enders game
Reading between the lines, Enders appears as a non-nonsense leader, more likely to demonstrate toughness, where Louis Gallois would instinctively display a more conciliatory style. This makes the German’s activities in Toulouse all the more interesting to follow. Gallois will be as comfortable out of the limelight, as Enders is in it.
SPIEGEL: Do you confront the employees with uncomfortable truths, if need be?
Enders: I happen to be someone who doesn’t beat about the bush. I like to get to the point. You will not see me changing my style now and tiptoeing around. The important issue is that people realize that I am a hands-on manager — not someone who’s interested in politics, but someone who has the company’s interests at heart
The tough and tender combination of Enders and Gallois may yet turn out to be a formidable team at EADS.
To go more deeply
As well as the informative text, Spiegel has some superb graphics.
Our earlier posts can be followed through the Airbus categories. These include The financial investigation called by Nicholas Sarcozy, and also