PARIS - The head of Airbus quit Monday after 99 days on the job, saying he
hoped his departure would deliver a "salutary shock" to a company he had found
impossible to manage. The troubled European plane maker's parent company, EADS,
named one of its co-chief executives to replace him.
Undated handout photo made available
by EADS of Louis Gallois. Airbus parent EADS has accepted the resignation
of the European plane maker's chief executive, Christian Streiff, and
agreed to name one of its own co-CEOs to replace him, people familiar with
the decision said Monday Oct. 9, 2006. The company was set to announce
later in the day that Streiff is to be replaced by Louis Gallois, who will
stay on as joint head of EADS, according to two people close to the
Franco-German defense group. [AP] |
The resignation of Christian Streiff deals a fresh blow to Airbus as the
company struggles to contain the damage to its finances and reputation from a
major new delay to its A380 superjumbo blamed on wiring problems.
Louis Gallois, who headed France's state-owned SNCF railway company before
joining EADS in July, replaces Streiff in the top Airbus job while also
retaining his current role as joint head of the Franco-German defense group.
Streiff, a 52-year-old former Saint-Gobain executive, had won support for his
Airbus turnaround plan from EADS directors but clashed with the board over how
the plan could be implemented and how much control he would exercise.
In an interview for Tuesday's edition of the French daily Le Figaro, Streiff
said he had not been given the "operational powers" to do the job and overcome
resistance among "certain shareholders" to make the production changes needed to
deliver savings.
"I hope this will be a salutary shock that will oblige Airbus to rethink its
governance and evolve positively," Streiff said of his decision to quit.
He refused to comment on unconfirmed reports that he has been selected to
replace retiring PSA Peugeot-Citroen boss Jean-Martin Folz and insisted the
French carmaker had "nothing to do with my decision to leave Airbus."
Streiff had wanted to run the Toulouse, France-based aircraft maker his own
way, reporting to the parent company every quarter and having the final say on
internal appointments, according to three officials who spoke to The Associated
Press on condition of anonymity because the discussions were confidential. But
senior EADS executives including German co-CEO Tom Enders refused, they said.
EADS owns 80 percent of Airbus and has said it plans to tighten management
supervision of the civil airliner unit as it acquires the remaining 20 percent
from Britain's BAE Systems PLC.
Airbus stunned investors in June by doubling the 555-seater A380's production
delay to one year, then doubled it again to two years earlier this month,
warning that the delay would wipe 4.8 billion euros ($6.1 billion) off EADS
profits over four years. However, it promised 2 billion euros ($2.5 billion) in
annual cost cuts by the end of that period.
The June announcement led to the ouster of Streiff's predecessor, Gustav
Humbert, along with EADS co-CEO Noel Forgeard, who remains under investigation
by market authorities after it emerged that he exercised stock options at a
profit of 2.5 million euros ($3.2 million) just weeks before ordering an
internal probe into the production problems.
After concentrating massive resources on the superjumbo, Airbus has been
outmaneuvered by Boeing's two-engine 787, which delivers better fuel economy
than older four-engine Airbus jets in the same size category - a sales argument
that has grown more persuasive with higher fuel prices.
The gap widened on Monday, as Airbus announced it had taken orders for 226
planes from Jan.1 through Sept. 30, compared with 723 net orders recorded by
Boeing as of Oct. 3.
Ever since French, German and Spanish aerospace companies merged to create
EADS in 2000, Airbus managers have answered to a separate CEO at the parent
company as well as their own. The A380 production delays, which came to the
attention of EADS managers only belatedly, have been blamed in part on the
blurred reporting lines.
Those lines should be clearer as a result of the new changes. Co-CEO Enders
will no longer have direct managerial responsibility for Airbus, the EADS
statement said, leaving Gallois as sole boss.
"The good news is that Gallois is an experienced, qualified manager," said
Richard Aboulafia of U.S.-based Teal Group. "The bad news is that he's not the
man to shake things up."
Before joining EADS, Gallois presided over 10 of the quietest years in the
history of SNCF industrial relations. The frequency of rail strikes approached
record lows.
Gallois can be counted on to engage in a "better social dialogue" with
workers than Streiff, said Xavier Petrachi of the CGT, a rival left-wing union.
"If Christian Streiff is leaving, the job-cutting plans should go with him."
Streiff had unnerved German politicians and trade unions by suggesting that
A380 work could be transferred to France from Germany and the planned A350 XWB,
a belated rival to the 787 assembled entirely in France to save transportation
time and costs. "We must prevent everything from going the way of the French,"
German Defense Minister Franz Josef Jung was quoted as saying by weekly Der
Spiegel.
Airbus restructuring is on the agenda for talks between President Jacques
Chirac and Chancellor Angela Merkel at a Franco-German summit in Paris on
Thursday. German carmaker DaimlerChrysler AG owns 22.5 percent of EADS; the
French government and Paris-based Lagardere SCA together own a further 22.5
percent.
In his newspaper interview, Streiff welcomed as "a step in the right
direction" the combination of the Airbus and EADS roles now held by Gallois. But
he warned: "If my successor doesn't have enough elbow room, and if the
governance of Airbus doesn't evolve, then yes, the company's future is
worrying."
Shares in European Aeronautic Defence and Space Co. closed 1.3 percent lower
at 20.16 euros ($25.41) in Paris ahead of the announcement.
