Sarcozy accepts need for EADS probe

October 12, 2007

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The long-running tale of malpractice enveloping EADS continues. Nicholas Sarcozy distances himself from any involvement, and calls for punishment of the guilty

Earlier posts to this blog have followed the various dismissals, resignations, restructurings, and political interventions, at EADS and its Airbus subsidiary.

This week the International Herald Tribune picked up the news agency bulletin:

“If there are people who committed fraud at EADS, judicial officials must get to the bottom of it so that we know the truth and those who behaved dishonestly be punished in proportion to what they did,” Sarkozy said. “I’ll get to the bottom of the investigation to know what the responsibilities of the state were at the time.”

While a major shareholder, the French government does not sit on the EADS board. Its interests are represented by the French defense and media conglomerate Lagardere, which holds a 7.5 percent stake.

EADS shareholders Lagardere SCA of France and Germany’s DaimlerChrysler AG announced in March 2006 that they would reduce their stakes.

There are several inter-related strands to this story. Airbus is a European flagship company with a complex governance structure through its parent EADS which involves particularly French and German Governments. The business theme is centred around the fierce competition between Airbus and Boeing products. The political theme involves unresolved bickering about the ways in which the US and European governments subsidize their commercial interests. There are additional fascinating manufacturing, logistic, and technological issues to do with creating next-generation products across multiple international sites, and meet increasingly drifting deadlines. Oh, yes, and Airbus is struggling to achieve considerable cost-cuttings with industrial relations troubles. Add to all these issues a series of allegations of corruption.

At the start of the year I attempted to tease out the killer facts in the Airbus affair. At the time, it seemed that

[In 2006] A380 project executives, including Airbus CEO Gustav Humbert, were dismissed. Humbert was blamed for the failure to deal effectively with the project delays, but also was accused of concealing the seriousness of the problems.

In the same period, it was revealed that the joint CEO of EADS, Noel Forgeard had sold EADS stock weeks before its Airbus subsidiary announced the Airbus A380 would be delayed again. M. Forgeard resigned, and the stock plummeted.

In a short space of time, Humbert’s replacement, at Airbus, Christian Streiff resigned, which was when Louis Gallois stepped in. Streiff was believed to have failed to secure backing for a financial package he believed necessary to turn things around with the A380.

In a few months, the company had begun to unravel some of its knottier problems, and achieved a more convincing organizational structure.

However, the changes left some players with lesser roles.

Arnaud Lagardère (of the media group of the same name) was French Co-chairman of EADS and seems to have been airbrushed out of the wider game. It had been muttered (especially in the French press) that he escaped scrutiny over earlier share scandals, and is ‘protected’ by Sarcozy, who was given a rather soft ride from Lagardère’s media group in his election campaign. 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. The possibility remains that he will be in line to return to EADS in the future, when the Chair rotates from German to French hands

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 [as saying that] “whatever happens” he will be protected by M. Sarkozy.

It now seems, that “whatever happens” M. Sarcozy intends to place himself hors de combat.


Match of the day: Branson-Murdoch Round three

October 3, 2007

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The battles between BSkyB and Virgin Media continue. This round goes to Richard Branson, as the competition commission rules that the Murdoch move which acquired a stake in ITV was anti-competitive.

According to The Guardian

Sky could be forced to sell its 17.9% stake in ITV at a substantial loss after the Competition Commission said this morning that the holding restricts competition and is against the public interest … It is likely to please Sir Richard Branson, who last year attacked Sky’s “reckless and cynical attempts to stifle competition, and secure creeping control of the British media”.

In a provisional ruling, the commission said that the shareholding, which has been fiercely criticised by rivals, would allow the satellite broadcaster to weaken ITV or prevent it competing fully with BSkyB.

In an earlier post I noted that

Both companies have a capacity to damage the other’s competitive position. As a complete victory for one side seems unlikely, the organizations will have to find ways of co-existing and collaborating, as well of competing

That has not stopped a bitter feud deepening between both organizations.

Earlier in the year Virgin’s TV subscribers were caught in the crossfire. Virgin lost an estimated 40,000 of its 3 million-plus subscribers when BSkyB pulled the plug (or at least, the dispute resulted in loss of BSkyB content to Virgin subscribers.

Both parties have continued to react energetically in the fast-changing media market-place.

This week Richard Branson launched the new TV channel Virgin 1, which even if planned otherwise will now fill the gap left by the loss of the Sky channels.

A day before the competition ruling, BSkyB yesterday unveiled Picnic, a new subscription service for Freeview digital TV, which initially will offer three channels (Sky One, Sky Sports 1 and Sky Movies).

Setanta Sports, originally positioned as viewing for Irish ex-pats, has muscled itself into a more visible position in its advertising campaign for cheap monthly subsriptions. In the UK, the most recent sale of transmission rights of Football matches has illustrated how what’s right for the Competition Commission may not be right for viewers wanting to follow their favorite team, and who now have mind-boggling calculations to make in view of the multiple bundling possibilities on offer.

What’s going on?

Here we have a developing story of some appeal to wannabe leaders. Is it a war-game? Are there rival teams of grand-masters planning move and counter-move?

While my favorite notion of Chess as a source of strategy insights offers a starting insight to the complexities, maybe a deeper study is required. One colleague suggested the various theories of Industrial Organization economics. These are even more complicated than the Branson Murdoch battle. A nice introduction can be found in the review by Kathleen Conner. Although not covering more recent work, it explores various theories, with particular attention to the Resource Based View of the firm. This remains a way of understanding how a firm’s competitive position may defined by a “bundling” of unique resources.


BA backs the Bus and the Dreamliner

September 29, 2007

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British Airways splits its future plane purchases between Boeing and Airbus. Although earlier statements suggested that the company was not interested in a Superjumbo sized carrier such as the new generation A380, Willie Walsh and his team show a chess-like grasp of strategy

Speculation in Seattle was pretty much right. A week before any official announcement, Industry insider James Wallace noted

The campaign is a key showdown between the A380 and 747-8 Intercontinental and the 787 and A350 . So far, only Lufthansa has ordered the passenger version of the 747-8. But Airbus also needs another major international customer to back the A380. It has repeat orders from Lufthansa and Singapore Airlines, but Airbus has long sought to bring BA into the A380 fold.

Jefferies & Co. analyst Howard Rubel told the AP he believes investors are expecting British Airways to split its order between the two aerospace rivals.
“I think B.A. wants to bring a little competition into the mix,” he said.
BA Chief Executive Willie Walsh has visited Boeing and Airbus for briefings on their planes.
The airline recently ordered more 777s.
Even though British Airways early on said the A380 was too big for its needs, Walsh has said the airline is now interested in the big Airbus jet, which will enter airline service next month with Singapore Airlines after a two-year delay.

Wallace’s blog also attracted a remarkable set of speculations about the prospective decision. Most seemed to be based on ‘sources close to Boeing or BA’. The following was typical

Posted by unregistered user at 9/20/07 9:21 a.m.
I’ve heard 10 A380’s + options on 10 more , 20 787’s + 10 options and 10 A350’s + 10 options

When the news of the decision was formally announced it was widely replicated from news agency sources. I took this from The BBC, but found it on all the main news feeds.

BA will buy 12 Airbus A380 superjumbos and 24 Boeing 787s, to be delivered between 2010 and 2014, for a reported $8.2bn (£4.1bn). The group also has options to buy seven more A380s as well as a further 18 Dreamliners from Boeing.
Further negotiations will occur so that BA can replace its remaining 747-400s. This appears to be between the 787-10 and the 777-300 ER from Boeing, and the Airbus A350

The Boeing reaction was between gritted teeth:

The Boeing Company [NYSE: BA] is honored that British Airways has selected the 787 Dreamliner as a key element of its long-haul fleet renewal

What’s going on?

Leadership geeks may be tempted to see unfolding a story of strategic leadership. If so, it is a story which has to place leadership with a wide cast of strategic players. We may start by thinking of Willie Walsh as the dominant decision-maker in the story, with some billion pounds/dollars to invest in the future of his company.

The evidence of Mr Walsh’s leadership style suggests that he will have been very active in the processes building up to the decision, internal to British Airways. At present we can only speculate. However, the decision has enormous significance. It will impact on the travelling lives of millions of people some more directly than others. Arguably it will impact on the future of employees of Boeing, EADS, and a myriad of suppliers and sub-contractors including Rolls Royce who will supply the engines. At another level, the debate on political influence and subsidies to Airbus and Boeing continues to bubble away.

However charismatic and autocratic his leadership style, Walsh will have been flying in tricky conditions and with a chief pilot’s usual near-overload of advice and chatter. Advisors, and advisors of advisors will have examined assorted risk assessments from in and outside BA into which data will have been fed from numerous sources. Somewhere in these the influence of various governments and global institutions will have been factored in, as well as the much-publicised production delays at Airbus and more recently at Boeing for the A380 and B787 projects. Willie Walsh keeps sane by following what the great Herbert Simon called satisficing, or simplifying the decision through a set of personal mental filters.

In an avalanche of articles and books since the 1950s, Simon ..focused much of his attention on the issue of decision-making – and [developed his theory of ] “bounded rationality”. Agents, he claims, face uncertainty about the future and costs in acquiring information in the present. Thus .. they have only “bounded rationality” and are forced to make decisions not by “maximization” by “satisficing”, i.e. setting an aspiration level which, if achieved, they will be happy enough with, and if they don’t, try to change either their aspiration level or their decision.

I have taken the view that such processes are those which chess-players also have to make. In this chess-game, BA wants to avoid fixing the position, when there is much to be said for keeping options open. So the overall decision on replacing the fleet of aging 747 400s may or may not have been made. It makes sense to keep options open, even to the extent of splitting up the decision between the two giant contenders for the business. That is partly why decisions also involve options as well as firm commitments.

Those with a liking for logistics theory can debate the merits of smaller planes and P2P (point to point) strategy, and larger ones with a Hub-based strategy. Whatever.

A judicious mix of planes of differing size keeps both strategic options open. A judicious mix of ‘top-down’ leadership actions, and ‘data driven’ analysis may also be appropriate.


Bear Stearns and the art of making money in tough times

September 13, 2007

joseph-and-his-amazing-wastecoat.jpgTough times bring with them opportunities. Hardly surprising, then, that entrepreneurs invest where and when more cautious souls are scrabbling to escape. Joseph Lewis and his investment in Bear Stearns is a recent example

Update

[An update can be found [March 17th 2008] to the following post]

Doom and gloom in the world’s financial markets. At the core of the problems are those institutes in the so-called sub-prime markets. At the core of the sub-prime business are the American investment and banking giants such as Bear Stearns.

But the principles of entrepreneurship hold. One of these is a calculated approach to risk-taking. Which appears to be what British entrepreneur did recently in investing in Bear Stearns.

Those of us outside the collective frenzy of the trading rooms have to reply on the indicators of expert opinion. The most immediate indicators are that the mighty Bear Stearns organization has been having a particularly tough time. Losses in two large funds seem to have prompted leadership changes.

According to a Bloomberg report

Bear Stearns triggered a decline in the credit markets in June after two of its hedge funds faltered as default rates on home loans to people with poor credit rose. For subprime mortgages turned into securities, defaults hit a 10-year high. The company pledged $1.3 billion to help stem losses in the funds. They filed for bankruptcy protection on July 31, two weeks after Bear Stearns told investors they would get little, if any, money back.

This was followed the removal of senior figures including one of the joint Presidents, Warren Spector, leaving Alan Schwartz, 57, as sole president. Spector was regarded as being groomed to take over from 73 year old James Cayne as CEO. The leadership moves have been seen as attempts by Mr Cayne to reassure markets.

Get out of that place

As a leadership watcher, my impressions recently have been that Credit Markets are a bad place to be in. And Bear Stearns a particularly bad place to be invested in. [Background music of I gotta get out of that place].

But such pessimism swamps awareness of opportunities to be made out of adversity. Step forward the fearless entrepreneur.

This week we learn that Billionaire British investor Joseph Lewis has invested over £400 million to acquire a 7% stake in Bear Stearns

Joseph Lewis. Who he?

A good starting point for billionaire bulletins is the Forbes Rich-List

Turns out that Mr Lewis is a self-made billionaire now happily located in Bahamas, gainfully employed through his Tavistock investment apparatus. There he is also busy building a nice little golfing set-up around the corner with his golfing chums Mr T. Woods and Mr E. Els.

Pausing one day, maybe on a newly leveled tee, he is unable to resist setting up a birdie chance. His route may skirt dangerous ground, but there’s no gain without risk. He makes his selection. A beautiful swing. Faint, Muppet-like cry of ‘in the hole’ from an admiring spectator …

Enough of this golfing metaphor. According to the BBC
Mr Lewis has bought the shares over the past two months through his Florida-based investment firm Tavistock, according to a filing to the US financial watchdog, the Securities and Exchange Commission. It makes him Bear Stearns’ largest individual investor… His other investments include minority stakes in Tottenham Hotspur and Glasgow Rangers football clubs.

To boldly go

What’s the leadership angle? The entrepreneur seems to me to capture the archetype of the heroic leader. In mythology, the hero leaves the everyday world and sets out on a lonely and courageous adventure. Along the way he (usually he) encounters the greatest and most fearful of hazards, before overcoming them, and eventually returning home. In most fairytales the hero is reunited with his love, and they live happily ever after. This seems to be the story of the entrepreneur-hero. Which is also pretty much the case for the business leader-hero, whose courage gains its deserved rewards.

The Greeks tended to include in the story such wrinkles as the way that the hero’s achievements are temporary blips in a final outcome determined by fate, the Gods, or whatever.

In either case, the hero-figure boldly goes where most of us fear to travel.


Eddie Stobart’s M-way catwalk

August 18, 2007

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This week a British road haulage firm was involved in what is technically a reverse takeover. Boring? Not when a cultural icon like Eddie Stobart is involved. We look at the business realities behind the brand that turned trucking into a motorway fashion show.

Eddie Stobart is a very English organization with amazing brand recognition. Even more remarkably, that status has been achieved largely not by customer satisfaction, but by non-customer satisfaction. The haulage firm has established itself in the affections of the public by an unrivalled charm offensive.

Eddie’s story

Edward Stobart Jnr took over his father’s haulage business delivering agricultural products to Cumbrian farmers. The firm grew, and Eddie’s imaginative leadership style created a unique business. For example, he personalized each of his trucks with a female name starting with the then super-model Twiggy, and following up with the musical pop idols of the day (Tammy, Dolly and Suzi). Eddie’s business values required trucks and drivers to present shiny clean appearances. As time went by Eddie Spotting became a Motorway pastime. Children kept notebooks with the details of the times they had caught a glimpse of Tammi or Twiggy. A cult was emerging.

According to Wikipedia,

In 2002, following difficulties caused by the fuel crisis, Edward Stobart sold the company to his brother William and his business partner Andrew Tinkler who own a civil engineering company specializing in railway maintenance called W.A. Fans and fantasies

Since 2002, ES has remained a fantasy company in the public eye, symbolized by the thousand or so A-list celebrity models cruising up and down the motorway catwalk. But there was another and hidden side to ES. Fans are generally avid for every detail of what lies behind the glossy exteriors of their fantasies. The ES fan club members were content to tick the boxes, buy the merchandise, watch the TV animation (‘Steady Eddie’). They were not interested in the commercial story behind the fantasy.

Which was?

The trucks were struggling to pay their way. For all the brand recognition, trucking is part of that modern notion a supply chain. And in the retail supply chain, the profit carve-up leaves big retailers with the lion’s share of the goodies, with the worker ants well down the food chain. Truckers are down there with the worker ants, producers and beasts of burden. Less metaphorically, the transport business is at risk from uncontrollable costs, including fuel. As fuel prices rise, so truckers struggle to remain profitable. The owners of those glossy trucks began to look for ways of transforming the business.

As the BBC put it

By the turn of the [20th] century, the Carlisle-based company had a fleet of about 800 trucks, a massive property portfolio and a turnover of some £150m. But although the company was at its peak in terms of size, it made its first loss in 2001 in the face of rising fuel prices, a shortage of trained drivers and tougher demands from its customers.

Now ES is heading for a stock market quotation.

The move follows after the firm announced plans to join with property and logistics group Westbury Property Fund in a complex reverse takeover. While Westbury is paying £138m to buy Eddie Stobart, Stobart’s owners are buying Westbury’s property portfolio for £142m. The merged group will be called Stobart and take up Westbury’s share listing

What happens next?

The deal is expected to be legally confirmed by Westbury later in the year. Overall, the case will offer considerable insights into the outcome of a strategy claimed to be one that will protect and transform a much-loved brand. Beyond that, the story promises more twists and turns. Will the unique branding of the former Eddie Stobart operation have much value in a few years time? Whatever happens, professional investors will take care to distinguish the fantasy from the financials.

A blogger’s question

Blogger Jon Howard asked a question worthy of a business school marketing examination:

Eddie Stobart has created a discrete community of fans whose relationship with the brand has absolutely nothing to do with its core business (and probably never will), and may have little provable impact on the bottom line. But they encourage and support it any way. And it feels like a good thing. So are there other examples of brands who have done something similar?

It’s not similar in one respect, but I mention it anyway. Once there was another British icon on the pre-motorway roads. The firm always had immaculate vehicles and smartly-dressed drivers who saluted. It expanded mightily from its origins. It was the Royal Automobile Club later known as the RAC. It is still a fine organization. Competition and change, however, have also hit the RAC. Do its drivers still salute? Like ES, the RAC was forced into diversification, cross-selling and all that stuff. It is now part of a large insurance group. Its main rival, the AA, has fallen into the hands of a private equity organization.


Royal Mail: Lions led by donkeys?

July 12, 2007

lions_donk_haig_cartoon.jpgA second one-day strike at Royal Mail is announced for Friday 13th of July. Letters are exchanged between the Union and Management. In that curious way of industrial disputes, the letters seem intended to avoid constructive dialog. The battle looks more and more like the Somme, or perhaps Little Big Horn and General Custer’s last stand.

Events at Royal Mail grind forward, painfully slowly. Billy Hayes and Dave Ward are in there somewhere battling for the Union side, Allan Leighton and Adam Crozier also somewhere for ‘Management’.

Sometimes the general shape of a battle-field has old warriors reminiscing of past triumphs and disasters. Two historic possibilities occur to me, one from The First World War, and one from the early days of American History.

Despite rumors to the contrary, I do not have first-hand experience of either, although my father survived the Somme, an experience that stayed with him for the rest of his life. He rarely talked about it. There were no real survivors. Poets and military historians give us a picture of the bloody futility of it all.

Appeals to Patriotism

The first world war was a war of patriotic slogans, sometimes wrapped up in the noble ancient language of the ruling class.. Dulce et decorum est, pro patria mori… Lions led by donkeys. Two or three generations later and there is cultural residue, a nagging awareness in Great Britain, going back to Dr Johnson’s maxim that patriotic rhetoric is the last resort of the scoundrel.

While patriotism remains more desirable and contested ground in the USA, two American journalists are worth mentioning for a modern gloss.

In Dr. Johnson’s famous dictionary, patriotism is defined as the last resort of a scoundrel. With all due respect to an enlightened but inferior lexicographer, I beg to submit that it is the first.”—Ambrose Bierce, The Devil’s Dictionary, at entry for patriotism, The Collected Writings of Ambrose Bierce, p. 323 (1946, reprinted 1973).

H. L. Mencken added this to Johnson’s dictum: “But there is something even worse: it is the first, last, and middle range of fools.”—The World, New York City, November 7, 1926, p. 3E.

Lions led by Donkeys

Historians argue over the origins of the term. Alan Clark wrote a book which helped popularize the expression. A reviewer noted:

The title comes from the German view of the English soldiers who charged into their machine guns and barbed wire: “Lions led by donkeys.” The donkeys were the professional officers of the British army which was destroyed in those battles, officers who were unable to adapt to the awful technology that changed the face of war forever

Back to the Royal Mail dispute

From the outside, events since the last one-day strike are baffling. Maybe they are as baffling on the inside as the battle orders were to the front-line troops on the Somme, or to General Custer’s men.

As the troops hunker down for the next planned push, the generals exchange letters. The tone of the letters is that of civilized beings engaged in diplomatic speak. Dear Allen, Dear Dave they begin.

But are the generals struggling and ‘unable to adapt to the awful technology’?

There is no alternative

Royal Mail claims it needs a billion pounds for the new technology, rather than meeting payclaims they compute as roughly the billion pounds for modernisation. There is no alternative. Or is there? It seems cruel to quote words associated with Margaret Thatcher, a general who waged war with another great Union two decades ago.

Today we have a new generation of political leaders. Dave the toff an open admirer of Tony Blair trying to drag the conservatives to a safe place for their political survival. Gord of the clunking fist is busy recruiting talented capitalist heroes to advise him.

Maybe the outcome will eventually attract more political attention. But for the moment, Dave and Gordon are united in their silence over the Royal Mail dispute. The BBC is curiously uninterested. The business has not yet cast any leader in a particularly heroic light. Creative leadership is at a premium.


Boeing, theater of dreams and Airbus nightmare

July 8, 2007

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Boeing launches its much-awaited Dreamliner 787. For Airbus is must seem more like a nightmare. In this fantasy battle, their champion, the Airbus 380, appears to be as potent as Superman in Kryptonite underpants. Can the European aero-dream still turn out all right in the end?

In Seattle they build planes. And, at the moment they are also very much in the Hollywood territory of selling dreams. The fantasy object is the new Dreamliner. High-tech, high-flying, the i-phone of the skies, the flying apple of the mind’s eye.

Meanwhile, some six thousand miles to the East (well within the 8000 mile range of the Dreamliner), Airbus executives put a brave face on for the ceremonies.

The power of the dream

Who can doubt the power of the dream? Who knows what happens if we stop believing, as James Barrie reminds us in Peter Pan, and Terry Pratchett points out in The Hogfather.

The selling of the dream has been a signal success, with press release claims that the 787 is already the fastest-selling commercial airplane in history with over 600 orders valued at more $100 billion at current list prices.

Even those us immune to the romance of the tale know that the 787 is the next giant leap of a line of aircraft of great consequence in the history of civil aviation. The 707 was a first. The 747, affectionately known as the first Jumbo jet. Now the 787, the star in the theater of aero-dreams.

Airbus versus Boeing

From the American side of the Atlantic the battle is a no-contest. Here’s the view of Lance Winslow, a not totally unbiased correspondent assessing the Dreamliner against its most direct competitor the Airbus A-350

Is the A350 really that spectacular? Hard to say, but one thing is for certain it is certainly no match for the robust, daring and dashing Dreamliner of today. Airbus’s attempt to compete with the Free Market Boeing Company has once again earned itself a distant second place or last place in the battle for the sky. The A-350 will use the same fuselage as the A330, but the wings will be made of composite. This is hardly a reciprocal response to Boeing’s cutting edge technology and advancements in design. But we have come to expect mediocrity from Airbus. When flying do you really want to ride in a bus while traveling at 30,000 feet in the Air? Think about it.

The Free-Market Boeing versus EU-subsidized EADS is important issue which will continue to be brought into the debate. The article also gets to another the key factors in the argument, the technical merits of the competing products.

Meanwhile in Europe …

In Europe, the financial press is more preoccupied with the boardroom battles within EADS, the corporate parent of Airbus. The Financial Times suggests that the efforts to restructure its complicated dual-management structure appear to be centering on co-chief executive Tom Enders.

Mr Enders is a controversial figure in France after he publicly criticized political interference from Paris and suggested the possibility of sensitive asset disposals. However, Daimler, the core German industrial shareholder in EADS, is determined that Mr Enders should not be sacrificed in any final deal.

We will continue to follow the twists and turns of this board-room battle. My point here is that persistent stories of corporate infighting may be indicating that the overall position is highly unsatisfactory. Boeing, we may presume, is doing very nicely. So nicely, that there are few rumors of boardroom clashes. In contrast, EADS leadership is forced to attend to the battles over its international border disputes.

The Chequer Board

What if anything can EADS, and more specifically the larger part of the outfit which is Airbus, do to break out of its nightmare? Incidentally, a deadline is approaching (July 16th) which dragged the New French President into the battle.

Let me put a few pieces on the chessboard. Louis Gallois, head of Airbus, is widely admired, and believed to be needed to stick it at Airbus, and see though Power 8, the strategic plan to streamline the business. This is a production and commercial imperative. He is co-CEO of EADS with Tom Enders at present.

Arnaud Lagardère of the media group of the same name is French Co-chairman of EADS . His German co-chair is Rudiger Grube.

Nicholas Sarcozy and Angela Merkel are also in play, with special concerns for their national interests (and for their own political positions). EADS Shareholder DaimlerChrysler has signaled willingness to increase its holding, a positive gesture to Sarcozy who would like to reduce the holding of the French Government. DaimlerChryser’s bid is linked to their interests in keeping Tom Enders in play.

The rumors in the French press

Rumors suggest the game will involve taking Enders off the board. This has been denied emphatically by the company.

The current form of the EADS/Airbus nightmare will be shared more widely in Toulouse after this month’s summit meeting.