aminobwana
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Eads +Summit 7/16 Sarkozy-Merkel-Daimler-Lagardere

Sun Jul 15, 2007 1:02 pm

This French President -German Chancellor Summit has as main issue the EADS Situation, Daimler and Lagardere are invited. Another issue to be discussed by the official will be the autonomous European Central Bank (ECB) monetary policy, not addressed within this post
In the past weeks, a flood of rumors, possible solutions and posturing hit the news, complemented by continuous denials.
The French Senate also made recommendations

I think it is needless to post much of above here, today I will refer only to four (4) articles, which allow a more or less reliable assessment of the present situation, which can be summarized as follows:

1)
The solutions proposed, if confirmed and the personnel issues agreed, would solve the Dual management problem, *
2)
Not so the permanence of the French and German veto rights, where at the moment the disagreement is still persisting but hopefully will be solved at the summit not only apparently, but really

The veto rights are presently anchored in the Board statutes, where each group has assigned the control of 5 members and to approval any meaningful issue,
3)
It is not sure if the funding issues will be addressed. Even if the rumors are contradictory, there is a tendency not to go the way of a capital increase, at least not a substantial one, but through German and French state guaranteed loans. How to achieve that without infringement of the WTO rules is still not disclosed.

The four articles are:

A)
Theme: Assessment by the prestigious Newspaper LE MONDE, Paris (only in French, highlights I will translate best I can and comment)
______________________________________________________________________________________
[url] http://www.lemonde.fr/web/article/0,1-0,36-935223,0.html[/
Difficiles transactions pour former une direction unique chez EADS (difficult tasks tobe performed to be able to achieve a sole leadership at EADS)
______________________________________________________________________________________

"If the streamlining of the structure is agreed, the appointment of the responsible is still open. The two-headed organization with 2 co-chairmen of the board and 2 co-CEOs shall be substituted by a sole Chairman and a sole CEO, which will also have authority over the subsidiaries, the main one being AIRBUS."
------------------------
"The draft also address the nationalities issue within the organization scheme, the French having requested that one of them will
manage AIRBUS
-----------------------
"One of the scenarios proposed would be appoint Arnaud Lagardere as Chairman of EADS"
-----------------------
"Thomas Enders, until now co-CEO, will be appointed CEO, whilst Louis Gallois, the other co-CEO, would remain only as CEO of the subsidiary Airbus".
----------------------
"Within such scenario, it seems impossible that M. Gallois could stay if subordinated to M. Enders".
---------------------
"As since one year both leaders worked together on the same level ...."
---------------------
"Therefore it is difficult to imagine a hierarchical dependence between both men, especially because their relations within the last months became tense: Nevertheless, Sarkozy would like to maintain Gallois at Airbus"


Comments:
A1) As visible in other articles, above scenario was proposed by the German and agreed by Lagardere. Nevertheless the French Government is seemingly not agreeing.
A2) The Chairman, by the bylaws of EADS, has no executive power
A3) From the German side, both Daimler and Merkel, it is repeatedly stated that the Shareholder pact within the Board, including a veto right for both France and Germany, as well as equal "influence" by the two nationalities, will not be modified, an very disrupting issue if it can not be solved during the summit.

B)
Theme: Germany's insistence, against Sarkozy's proposals, to maintain the equal influence "shareholder Pact"
__________________________________________________________________________________
{url] http://investing.reuters.co.uk/news/...AT001820_RTRIDST_0_EADS-MERKEL.XML [/url]
Franco-German balance must remain at EADS-Merkel
__________________________________________________________________________________
C)
Theme: Denial of agreement reached until now and comment about probability it will happen during the summit
__________________________________________________________________________________
money/2007/07/14/cneads114.xmlhttp:/...ml=/money/2007/07/14/cneads114.xml
EADS reform plan looks out of reach
__________________________________________________________________________________
Comment;
C1) This article mention the open problems, complementing what is said in A.)

D) Union and Labor position regarding the Power 8 plan
__________________________________________________________________________________
http://news.google.com/news?q=eads&s...sult&resnum=4&ct=more-results&cd=2
[b]Some of the sub-articles covering this issues, by far not all of these
__________________________________________________________________________________
As stated by union leaders in Germany, their opposition hardened as consequence of the perceived positive outlook during the Paris show.
Parallely, the Airbus Worker council in Germany stated that they would not oppose the sale of plants, if Airbus commits to order the components they manufacture there and not outsource these to other suppliers, which obviously would restrict the freedom of choose subcontractors.

Situation by July 15, one day before summit

aminobwana

[Edited 2007-07-15 06:04:07]
 
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RE: Eads +Summit 7/16 Sarkozy-Merkel-Daimler-Lagardere

Sun Jul 15, 2007 2:22 pm

My predictions:-

1. Ultimate two-government control (i.e. deadlock) to continue.

2. More 'musical chairs' in the Boardroom (probably Enders becoming sole CEO 'balanced' by Lagardere becoming sole Chairman).

3. For likely net effect of Point 2, see Point 1 above!  Smile
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aminobwana
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RE: Eads +Summit 7/16 Sarkozy-Merkel-Daimler-Lagardere

Mon Jul 16, 2007 12:33 am

Quoting NAV20 (Reply 1):
My predictions:-

1. Ultimate two-government control (i.e. deadlock) to continue.
2. More 'musical chairs' in the Boardroom (probably Enders becoming sole CEO 'balanced' by Lagardere becoming sole Chairman).

Again, Arnaud Lagardere can at least theoretically not balance the CEO, as he has no individual executive powers, and he cannot expect that the board support him in case of a Chairman/CEO conflict, given the German Veto power.

An equivalent situation would arise if the German EADS CEO gives instructions to the French Airbus CEO, the latter appeals to the board and the German veto any support to him.

In short: this could be even worse as the present situation

Of course, the solution of such is very easy. Do, what Sarkozy said (but of course did not support by his actions until now): Forget nationalities when appointing the leaders !!

Hopefully, when the situation becomes to tight tomorrow in Toulouse, both parties see the light and decide to:

1)
appoint 1st class international, from private companies coming CEO's with wideranging powers,(neither French nor German) for EADS and Airbus

2)
Modify the Board with an equal No. of German and French members, plus one Spanish and several independent ones appointed consentually (not by one party only as now!!) , with qualified majorities requirement restricted to issues which are customary in big business but not equivalent to allow the main shareholderrs to veto any resolution !!

3)
To induce the French to accept above, if necessary allow M. Lagardere to become Chairman, which looks very good but which a strongly empowered CEO and a independently minded Board is mainly formal. As far I am able to read, the relation between Arnaud and Daimler is not bad and therefore he would be acceptable to the German.

regards

aminobwana
 
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RE: Eads +Summit 7/16 Sarkozy-Merkel-Daimler-Lagardere

Mon Jul 16, 2007 12:53 am

In a lengthy interview with the German Economics-magazin "Handelsblatt" Angela Merkel today clearly indicated her opposition to any future re-enforments of politics in EADS.
She said EADS is a commercial company that should produce excellent aircraft and earn money.Politicians should the f... stay out of the operations.She did not endorse the way Sarkozy tries to re-model the issue and the outcome of the meeting is anything from clear.
This un-pleasant game has been lasting for much to long and someone should say-that's it-we run the company based on purely commercial aspects.While both -Sarkozy and Merkel see the issues,the proposed solutions seem inconceivable for both.
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RE: Eads +Summit 7/16 Sarkozy-Merkel-Daimler-Lagardere

Mon Jul 16, 2007 2:25 am

The Article below in English, by REUTERS, contains substantially the same issues as the Article of The Monde in French (see thread starter). It is more complete and state some additional aspects

For you convenience, I include it here

http://in.today.reuters.com/news/new...NOOTR_RTRMDNC_0_India-284850-1.xml
France hopes to get EADS deal, Germany not hurried
Sun Jul 15, 2007 8:16 PM IST

Quoting Beaucaire (Reply 3):
While both -Sarkozy and Merkel see the issues,the proposed solutions seem inconceivable for both.

I agree that as long they do not (or not want to) realize the catastrophical effects of not agreeing generally, and more so the effect that a failure of a meeting of State/Government heads , which normally is only performed to perfect a alreadu drafted Agreement, will have on airlines, financial community, bourse, etc, there will not be such agreement.

But as I cannot immagine they do not realize such, including the polical consequences, it could be that in the last moment they will stop the posturing and agree on something.

Hopefully on something which will really help the company, as Band Aids which would only defer such immediate consequences for a short while would only make a later solution more problematic to achieve

regards

Aminobwana
 
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RE: Eads +Summit 7/16 Sarkozy-Merkel-Daimler-Lagardere

Mon Jul 16, 2007 3:45 am

Unexpected development - Merkel seems ready to leave EADS presidency to France (Gallois ) and have Enders run Airbus..

in German only (sorry )

http://www.spiegel.de/wirtschaft/0,1518,494556,00.html
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aminobwana
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RE: Eads +Summit 7/16 Sarkozy-Merkel-Daimler-Lagardere

Mon Jul 16, 2007 5:02 am

Following up reply 5 by Beaucaire, see the attached FORBES URL with more or less similar content in English

[url]http://www.forbes.com/markets/feeds/afx/2007/07/15/afx3914999.htmlFollowing [/url]
Germany wants to appoint Enders as Airbus head, Gallois as EADS CEO - report

This this new German proposal seems a 90% reversal of what was perceived as also a German one, now containing:

EADS Chairman: Ruediger Grube, Daimler/Germany, instead Arnaud Lagardere, Lagardere France
EADS CEO------: Louis Gallois, France
AIRBUS + DEFENSE + EUROCOPTER subsidiaries CEO : Thomas Enders/Daimler, Germany

The request to incorporate Defense and Eurocopter is written only in the Geman language article, where the following phrase is also incorporated:
" GALLOIS could therefore concentrate himself totally on his duties with the mother company EADS"
which could eventually by a hidden reference that Enders would have only nominal authority over Gallois (?)

These news are silent regarding the Board integration and the permanence of the shareholder pakt

Previous news from Paris told that Sarkosy would accept Grube as Chairman, but wanted Gallois continue as Airbus CEO.

As I can be seen, there are news from all angles, but all unilateral !!

aminobwana
 
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RE: Eads +Summit 7/16 Sarkozy-Merkel-Daimler-Lagardere

Mon Jul 16, 2007 12:40 pm

Here is a complete surview of the situation a few hour before the talks in Toulouse begin (5.00 am ET)

Again in German, by the Financial Times Germany. I hope an English translation will be available later.

The most important within: The reason why the original Proposal failed i.e.
Chairman: French
EADS CEO: German
Airbbus CEO: French

was because the French wanted a double vote in case of draw for the Chairman inside the Board, which would assure the French dominance there. Obviously this was unacceptable for the German, who then submitted a new proposal as outlined in
Reply 6. i.e:

Chairman: German, simple vote in the Board
EADS CEO: French
AIRBUS+EUROCOPTER+DEFENSE subsidiaries: German, largely automomous

aminobwana
 
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RE: Eads +Summit 7/16 Sarkozy-Merkel-Daimler-Lagardere

Mon Jul 16, 2007 6:23 pm

Just off the press- Enders will become the new boss of Airbus
Gallois head of EADS
Gruber heads board of EADS..
at least some progress !

[Edited 2007-07-16 11:24:17]
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rigo
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RE: Eads +Summit 7/16 Sarkozy-Merkel-Daimler-Lagar

Mon Jul 16, 2007 7:05 pm

Thanks Aminobwana for this detailed post. So it seems that it's not headed toward the solution rumored last week (that Enders would become sole CEO of EADS, Gallois of Airbus).

There is one issue that is too easily forgotten, though: politicians are so eager to keep interfering in EADS and Airbus because they created it at the first place. The original Airbus consortium was a politically motivated corporate welfare programme, with the stated goal to save the European aviation industry from collapsing. It has actually worked, too: for decades it has converted taxpayer's money into jobs and further tax revenue.

It's pretty clear to the average observer that this structure made its time and is not sustainable any longer, but it may not be so easily understood by the politicians. Especially in the EU, which is plagued by high unemployment and is built on an economic culture of dirigism and general distrust against unregulated markets.

Airbus also remains the EU's greatest pride. It's an ego-booster, a symbol of what Europeans can achieve by working together. So it's understandable that political, nationalistic and personal considerations tend to take precedence over pragmatic business decisions. Any solution that comes out will be a matter of difficult compromises.

Anyway, I'm looking forward to see what happens. Go Airbus!

Rigo

[Edited 2007-07-16 12:14:38]
 
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RE: Eads +Summit 7/16 Sarkozy-Merkel-Daimler-Lagardere

Mon Jul 16, 2007 7:14 pm

Just officially announced :

EADS CEO = Louis Gallois

Airbus CEO : Thomas Enders
 
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RE: Eads +Summit 7/16 Sarkozy-Merkel-Daimler-Lagardere

Mon Jul 16, 2007 7:17 pm

Quoting Rigo (Reply 9):
Especially in the EU, which is plagued by high unemployment

Not a problem in all EU-countries  Wink But you do have some good points.

Cheers

Peter
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RE: Eads +Summit 7/16 Sarkozy-Merkel-Daimler-Lagardere

Mon Jul 16, 2007 7:30 pm

Quoting Maersk737 (Reply 11):
Quoting Rigo (Reply 9):
Especially in the EU, which is plagued by high unemployment

Not a problem in all EU-countries Wink But you do have some good points.

Sorry if I offended you - I readily admit not having complete data on all the EU members  Wink
I believe though that the original statement applies to the major Airbus stakeholders except the UK, i.e. Germany, France and Spain. Please somebody correct me if I'm wrong.
 
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RE: Eads +Summit 7/16 Sarkozy-Merkel-Daimler-Lagardere

Mon Jul 16, 2007 7:40 pm

Quoting Maersk737 (Reply 11):
Not a problem in all EU-countries

Eurostat says:

Quote:
Euro area (EA13) seasonally-adjusted unemployment stood at 7.0% in May 2007, compared with 7.1% in April. It was 7.9% in May 2006. The EU27 unemployment rate was also 7.0% in May 2007, compared with 7.1% in April. It was 8.0% in May 2006.

In May 2007, the lowest rates were registered in the Netherlands (3.2%), Denmark (3.3%), Ireland (4.1%) and Cyprus (4.2%). Unemployment rates were highest in Slovakia (10.8%) and Poland (10.5%). These figures come from Eurostat, the Statistical Office of the European Communities.

Twenty-two Member States recorded a fall in their unemployment rate over a year, four an increase while the unemployment rate was stable in Romania. The largest relative falls were observed in Poland (14.2% to 10.5%), Denmark (4.2% to 3.3%) and Bulgaria (9.2% to 7.2%). The highest relative increases were registered in Hungary (7.3% to 7.7%) and Luxembourg (4.6% to 4.8%).

The unemployment rate for males fell from 6.8% to 5.9% between May 2006 and May 2007 in the euro area and from 7.3% to 6.2% in the EU27. The female unemployment rate declined from 9.3% to 8.4% in the euro area and from 8.9% to 8.0% in the EU27.

In May 2007, the unemployment rate for under-25s was 15.3% in the euro area and 15.9% in the EU27. In May 2006 it was 16.6% and 17.5% respectively. The lowest rates for under-25s were observed in the Netherlands (5.7%), Denmark (6.4%) and Ireland (7.7%); the highest in Greece (24.6% in the first quarter 2007), Poland (22.1%), France and Romania (both 21.9%).

Eurostat estimates that 16.4 million men and women in the EU27, of which 10.4 million were in the euro area, were unemployed in May 2007. In May 2006, 18.6 million men and women in the EU27, of which 11.8 million were in the euro area, were unemployed.

In May 2007, the US unemployment rate was 4.5% and the Japanese rate was 3.8%.
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RE: Eads +Summit 7/16 Sarkozy-Merkel-Daimler-Lagardere

Mon Jul 16, 2007 7:45 pm

EADS names Gallois as sole chief, Enders Airbus head.

http://www.bloomberg.com/apps/news?p...601087&sid=asftgTpVZD74&refer=home

Sorry didn't see reply 10 before I posted  ashamed 

Cheers

Peter

[Edited 2007-07-16 12:51:01]
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RE: Eads +Summit 7/16 Sarkozy-Merkel-Daimler-Lagardere

Mon Jul 16, 2007 7:58 pm

Quoting Rigo (Reply 12):
I believe though that the original statement applies to the major Airbus stakeholders except the UK, i.e. Germany, France and Spain. Please somebody correct me if I'm wrong.

From the above statement (May 2007 figures):
Germany 6.6%
France 8.7%
UK 5.4%
Spain 8.2%

Euro Area: 7.0%
EU total: 7.0%

Lowest: Netherlands 3.2%
Highest: Slovakia 10.8%
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RE: Eads +Summit 7/16 Sarkozy-Merkel-Daimler-Lagardere

Mon Jul 16, 2007 7:59 pm

The French won!

Ruscoe
 
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RE: Eads +Summit 7/16 Sarkozy-Merkel-Daimler-Lagardere

Mon Jul 16, 2007 7:59 pm

Quoting BuyantUkhaa (Reply 13):

Given the improving employment numbers posted, I would think that the governments will be wiling to back off and let EADS implement 'Power 8' as they see fit?

What will be the role of the French government going forward? Will they divest their stake?
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RE: Eads +Summit 7/16 Sarkozy-Merkel-Daimler-Lagardere

Mon Jul 16, 2007 8:05 pm

Quoting Ruscoe (Reply 16):
The French won!

Ruscoe

That is a relatively dumb remark,in that EADS and Airbus did win- the streamlined management structures have been overdue since the very beginning of Airbus.
Although being German by birth,I could not care less if the head of EADS is French,British or Slovakian,as long as he gets the job done.Enders will have the toughest job,since he has to get the cash rolling and the technology implemented, that the customers want to see.
I'm quite satisfied with the outcome and hope that the focus now will turn onto the A350 and A380 deliveries.
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RE: Eads +Summit 7/16 Sarkozy-Merkel-Daimler-Lagardere

Mon Jul 16, 2007 8:05 pm

Quoting Ruscoe (Reply 16):
The French won!

I would like to add; "this round".

Can't see this working, because the Board is still evenly divided.

Ruscoe
 
Beaucaire
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RE: Eads +Summit 7/16 Sarkozy-Merkel-Daimler-Lagardere

Mon Jul 16, 2007 8:09 pm

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RE: Eads +Summit 7/16 Sarkozy-Merkel-Daimler-Lagardere

Mon Jul 16, 2007 8:13 pm

It looks as if EADS is doing right things at the moment  Smile

Cheers

Peter
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RE: Eads +Summit 7/16 Sarkozy-Merkel-Daimler-Lagardere

Mon Jul 16, 2007 8:15 pm

Quoting Ruscoe (Reply 16):
The French won!

Ruscoe

If you ask Jean Luc Lagardère he will most definitely disagree with that statement,since he's ousted..
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RE: Eads +Summit 7/16 Sarkozy-Merkel-Daimler-Lagardere

Mon Jul 16, 2007 8:30 pm

Quoting Beaucaire (Reply 20):
http://www.eads.com/1024/de/pressdb/...sdb/EADS/20070716_eads_summit.html

the board will be changed...

The same but in English:

http://www.eads.com/1024/en/pressdb/...sdb/EADS/20070716_eads_summit.html

Rüdiger Grube to be sole Chairman of the Board of Directors
Louis Gallois to be sole CEO of EADS
Thomas Enders to be CEO of Airbus
Fabrice Brégier to be COO of Airbus
Number of independent members on the Board of Directors to be increased
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rigo
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RE: Eads +Summit 7/16 Sarkozy-Merkel-Daimler-Lagar

Mon Jul 16, 2007 8:44 pm

Quoting Lumberton (Reply 17):

Given the improving employment numbers posted, I would think that the governments will be wiling to back off and let EADS implement 'Power 8' as they see fit?

What will be the role of the French government going forward? Will they divest their stake?

Well that's the whole point, actually. From an American point of view, fighting unemployment = getting out of the way of free business. From an European point of view (especially French), fighting unemployment = reigning in. That's why implementing Power8 is most certainly going to be met with political resistance.

Please, I absolutely do not wish this to be interpreted as an US vs EU argument... actually I believe that both policies can be valid in their respective contexts. As far as Airbus is concerned, though, I think that political interference is unlikely to end anytime soon for these reasons. Whether it's good or bad (and for whom) is an entirely different matter...

Regards,
Rigo
 
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RE: Eads +Summit 7/16 Sarkozy-Merkel-Daimler-Lagardere

Mon Jul 16, 2007 8:56 pm

Quoting Rigo (Reply 24):
Please, I absolutely do not wish this to be interpreted as an US vs EU argument... actually I believe that both policies can be valid in their respective contexts. As far as Airbus is concerned, though, I think that political interference is unlikely to end anytime soon for these reasons. Whether it's good or bad (and for whom) is an entirely different matter...

We know more after the summit Big grin Political interest is ok. Political interference is not that good  Wink

Cheers

Peter
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RE: Eads +Summit 7/16 Sarkozy-Merkel-Daimler-Lagardere

Mon Jul 16, 2007 9:17 pm

Quoting Rigo (Reply 24):
Well that's the whole point, actually. From an American point of view, fighting unemployment = getting out of the way of free business. From an European point of view (especially French), fighting unemployment = reigning in. That's why implementing Power8 is most certainly going to be met with political resistance.

yes, and we have to look at all the ways and means the French are using to interfere. They have tried already to undermine the stability of the Euro by interfering with the European Central Bank. I certainly hope, that the French Governour of the ECB keeps up his résistance (pronounce the word in French please). Messing with the rate of exchange vs the US$$ just to sell planes would mean inflation for the European citizens and that is not acceptable.

Airbus or whoever else is exporting on $ base must be able to be competetive on his own right. The French (and us Germans as well) must learn once and for all not to interfere with business. As Maersk737 has said it - interest yes, that can include incentives and start up assistance but no interference on day-to-day business.
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RE: Eads +Summit 7/16 Sarkozy-Merkel-Daimler-Lagar

Mon Jul 16, 2007 9:19 pm

Quoting Beaucaire (Reply 20):
the board will be changed...

So I take it these four open positions will be elected by the shareholders?

If so, I expect the Russians will now increase their stake to secure two of them, and Qatar and Dubai will probably each increase their shares to secure the other two (one each).

[Edited 2007-07-16 14:19:55]
 
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RE: Eads +Summit 7/16 Sarkozy-Merkel-Daimler-Lagardere

Mon Jul 16, 2007 9:33 pm

Quoting PanHAM (Reply 26):

yes, and we have to look at all the ways and means the French are using to interfere. They have tried already to undermine the stability of the Euro by interfering with the European Central Bank. I certainly hope, that the French Governour of the ECB keeps up his r�sistance (pronounce the word in French please). Messing with the rate of exchange vs the US$$ just to sell planes would mean inflation for the European citizens and that is not acceptable.

Airbus or whoever else is exporting on $ base must be able to be competetive on his own right. The French (and us Germans as well) must learn once and for all not to interfere with business. As Maersk737 has said it - interest yes, that can include incentives and start up assistance but no interference on day-to-day business.

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RE: Eads +Summit 7/16 Sarkozy-Merkel-Daimler-Lagardere

Mon Jul 16, 2007 9:58 pm

Summit results:

Quote:
www.eads.com/1024/de/pressdb/...sdb/EADS/20070716_eads_summit.html

Chairman: -------Ruediger Grube / Daimler/Germany
EADS CEO:-----Louis Gallois/France
Airbus CEO-----Thomas Enders
and
Board Restructuring

Quote:
As part of this proposal both DaimlerChrysler and French holding company, Sogeade, will each relinquish two seats on the Board of Directors. The Board will propose at the next shareholders meeting the election of four independent directors, who will join the Chairman, the CEO, two representatives from DaimlerChrysler, two representatives from Sogeade and one representative from SEPI on the future Board of Directors of EADS. Apart from the CEO, the Board will no longer comprise executive directors.

EADS and its Shareholders believe that this redesigned Board structure enables a continued close working relationship among existing Board members while providing the Group with the additional benefit of the experience and independent perspective that the new members will bring to their responsibilities. The EADS CEO and his Executive Committee will have more leeway in the day-to-day management of the company: in particular, investments below %u20AC350M become its sole responsibility, as well as for the appointment of the management teams of EADS main subsidiaries and business units, save for Airbus CEO and EADS Executive committee, whose appointment will be decided by EADS CEO, EADS Chairman and the Board.

The Board of Directors%u2019 decisions will be taken on a simple majority vote, save for a limited list of reserved matters (including appointment of Chairman, EADS CEO and Airbus CEO and major strategic or investment decisions), which will require approval by Sogeade and DaimlerChrysler directors.

There are two critical questions:
No.1:
We need to see what (if at all) is said about the interrelation Gallois/Enders and how much autonomy both will indulge, ,

No.2:
a) Will the independent members of the Board be nominated, as the present statutes impose half/half by the German and French groups, as it happens today, and therefore not be really independent, as the past experience clearly shows
b) How "major strategic decisions" are defined, where the French and Germans groups have veto right ??

If as said in a) the independent members, as it is today, are not really independent
* the French will have 5 votes as before, i.e the CEO, 2 delegates, 2 "independents" (today, they have 4 delegates -two of them Co-Chairman and Co-CEO, plus 1 "independent"),
* the German also 5 votes as before, i.e. the Chairman, 2 delegates, 2 "independents" (today, they have also 4 delegates -two of them Co-Chairman and Co-CEO, plus 1 "independent")
* the Spanish (SEPI), 1 vote as before
* totalling 11 members, as before.

this would create the absurd situation that the Spanish delegate would have the decisive vote !!

Of course, this would be avoided if the today's Board would be able to agree on really independent directors, which could be a difficult task !!

Obviously, the stock market has the same questions, as at this hour (16.10 h Paris) EADS quotes virtually unchanged, with a very modets movement.

Quoting Stitch (Reply 27):
So I take it these four open positions will be elected by the shareholders?

If so, I expect the Russians will now increase their stake to secure two of them, and Qatar and Dubai will probably each increase their shares to secure the other two (one each).

You mean the shareholders not represented in the Board ??

The Russians are not independent at all as they have a very clear agenda, the Gulf guys neither, because as they selves state, their only interest is not long term, but to use a convenient moment when the stock is high to sell and get out (as they are doing with other investments, as Daimler)!!

And obviously, nobody will allow these countries to act as tiebreakers between German and French !!

aminobwana
 
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RE: Eads +Summit 7/16 Sarkozy-Merkel-Daimler-Lagardere

Mon Jul 16, 2007 11:16 pm

Quoting Aminobwana (Reply 29):
(Quoting EADS) The Board of Directors%u2019 decisions will be taken on a simple majority vote, save for a limited list of reserved matters (including appointment of Chairman, EADS CEO and Airbus CEO and major strategic or investment decisions), which will require approval by Sogeade and DaimlerChrysler directors.

The key question is what constitutes 'major strategic or investment decisions.' That could include everything up to and including the strength of the Boardroom coffee, everything depends on the 'small print.'

Quoting Aminobwana (Reply 29):
this would create the absurd situation that the Spanish delegate would have the decisive vote !!

The position at the moment is that seven votes (out of 11) are required for any decision. That means that the Spaniard is currently powerless. Again, it's a 'small print' issue; if the French and German blocs go on effectively appointing half the directors each (including the 'independent' ones), it's the mixture as before.

The biggest thing that strikes me is that there is STILL no new blood. All the appointees were already in positions of power in EADS before the 2006 collapse - they're what the police would call 'the usual suspects.'  Smile God knows where any new ideas are going to come from.
"Once you have flown, you will walk the earth with your eyes turned skywards.." - Leonardo da Vinci
 
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RE: Eads +Summit 7/16 Sarkozy-Merkel-Daimler-Lagardere

Mon Jul 16, 2007 11:20 pm

Quoting Rigo (Reply 24):
Well that's the whole point, actually. From an American point of view, fighting unemployment = getting out of the way of free business. From an European point of view (especially French), fighting unemployment = reigning in.

Let's be clear here...instead of "American," you should specify "Anglosphere" or some analogous term. Similar philosophies are certainly in play in the UK, Australia, and Canada.
When they call the roll in the Senate, the Senators do not know whether to answer 'Present' or 'Not guilty.' -Theodore Roosevelt
 
aminobwana
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RE: Eads +Summit 7/16 Sarkozy-Merkel-Daimler-Lagardere

Tue Jul 17, 2007 12:53 am

Quoting NAV20 (Reply 30):
The key question is what constitutes 'major strategic or investment decisions.' That could include everything up to and including the strength of the Boardroom coffee, everything depends on the 'small print.'

That precisely my point, why it is so important.

Quoting NAV20 (Reply 30):
The position at the moment is that seven votes (out of 11) are required for any decision. That means that the Spaniard is currently powerless. Again, it's a 'small print' issue; if the French and German blocs go on effectively appointing half the directors each (including the 'independent' ones), it's the mixture as before.

The biggest thing that strikes me is that there is STILL no new blood. All the appointees were already in positions of power in EADS before the 2006 collapse - they're what the police would call 'the usual suspects.' God knows where any new ideas are going to come from.

Differently as now, where the veto right is not expressly stated, but implicit in the 7 votes of 11 exigency, now there is simple majority (6 of 11) except for "major strategic" issues, where a veto right exists.

And, always assuming that the independent directors are nominated by French and Germans, therefore as the past shows clearly are NOT independent, each group continues to have 5 votes, so the Spaniard has the decisive 6th vote for all "normal" issues. I understand that you share my opinion.

Of course, the independents nomination would be sent to the shareholders by the Board, whilst the nomination of the candidates inside the Board would be done half/half by each group, then the Board must approve it.
Factually, even if the half/half nomination is eliminated and the Board must select the candidates by agreement, this would end in a compromise 2 candidates each.

Another critical point is: will Enders have enough powers, or depend from Gallois ?? I assume this is still very much in the air and given the not so good relation between them is also critical.

Basically, the only clear facts are:
*
Gallois is out from Airbus and alone at EADS. POINT 1 to clarfy: has he much authority over Enders ??
*
Enders is in at Airbus. POINT 2 to clarify: Aside the relation with Gallois, will he have enough independence ??
*
The board will have only French -2 delegates + CEO, -------totalling 3, + 2 "independents" = 5, , instead 4 and 1 + "independent" = 5 as before
*
The board will have only German 2 delegates + Chairman,-totalling 3, + 2 "independents" = 5, , instead 4 and 1 + "independent" = 5 as before

Point 3 to clarfy: will the "independents" be nominated by Board consensus as assumed above or by Board consensus
*
The board will have 11 members, incl. the Spanish delegate, and vote by simple majority, except between other major strategic issues. Point 4 to clarfy: Which are major strategic issues ??

My assessment: There were no agreement on Point 1-4, so, the given way to present the results of the summit was
to push out in time the solution. The elimination of the dual Chairman/CEO is positive, the newly created relation between Enders/Gallois constitutes a conflict risk, the NAV20 stated absence of new blood from outside is a major negative.

regards

aminobwana
 
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RE: Eads +Summit 7/16 Sarkozy-Merkel-Daimler-Lagardere

Tue Jul 17, 2007 1:37 am

Despite the mind-numbingly predictable and thus boring posts from the 'usual suspects', who indeed prove that no new ideas will ever come from them, it's a strategically important step forwards for EADS/AIrbus. A perfect decision? No, probably not but in realistic terms about as good as could be expected.

EADS/AIrbus management have been taking the right steps and decisions lately and this agreement will make them more effective. Of course a lot of challenges still remain (e.g. cheapo dollar, remaining political influence, time to market) but then again when is a multinational company in a highly competitive market ever without it' s challenges?
 
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RE: Eads +Summit 7/16 Sarkozy-Merkel-Daimler-Lagardere

Tue Jul 17, 2007 1:49 am

The wire services are reporting President Sarkozy as having said, "It is a great day for the Franco-German axis." Surely not. Does anyone have what he may have said in French, hopefully?


"
 
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RE: Eads +Summit 7/16 Sarkozy-Merkel-Daimler-Lagardere

Tue Jul 17, 2007 2:28 am

Quoting 707lvr (Reply 34):
The wire services are reporting President Sarkozy as having said, "It is a great day for the Franco-German axis." Surely not. Does anyone have what he may have said in French, hopefully? "

Iassume you were thinking of the Berlin-Rome-Tokyo axis !!
but he said " l'entente ", meaning the same as in English, i.e. alliance.

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par13del
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RE: Eads +Summit 7/16 Sarkozy-Merkel-Daimler-Lagardere

Tue Jul 17, 2007 2:53 am

Just read the release on CNN.COM and I must admit that I probably confused myself. I thought that this whole re-org was about the companies becoming more "independent" from the "political arm", based on what I just read I'm not so sure. Now I am taking the article at face value, if it is later debunked I'll revisit my opinion.
1. Gallois currently serves as CEO of Airbus and joint CEO of EADS.
2. He - Gallios - did not want to report to Enders so he would not quit his EADS Position.

So far I'm ok, things like this happen all the time in business, experience, paid your dues, etc, etc. Where I drift is the German response, which was ok, if you don't want to report to him keep EADS and we'll switch him to Airbus.
From a layman perspective, this seems as if it makes no difference to the political arm where either man goes, wonder why? If when they were appointed we took at face value how uniquely qualified each was for his position what does this now show? If the individuals themselves, chose to change / switch positions I would put it down as them being confident in their abilities to tackle whatever job they are given, when the "masters" switch you like that it says to me same old same old.

By the way, inspite of all what has taken place in EADS / Airbus, I have never gotton on the wagon that change has to take place, when it comes to the public purse, the European mindset is vastly different from the American one. Would I welcome change sure, I just don't think it will happen, Power8 or no, just more convoluted red tape to continue business as usual.
 
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RE: Eads +Summit 7/16 Sarkozy-Merkel-Daimler-Lagardere

Tue Jul 17, 2007 3:11 am

Let's see:

1). All the decisions, what there may have been, made by Gallois are now going to be reviewed by Enders so nothing has been decided in reality.

2). Power8 still seems to be circling overhead, looking for a place to land.

3). The Euro is now at $1.38 and going up. And the price of the Euro against both the Swiss Franc and Japanese yen has gone way up, and up somewhat less against the British pound.

4).There is no new blood -- same old faces, same old politics and same old problems (well almost -- they did get rid of the co-chairs, but did they really?)

5). Both the A380 and A350 programs need firm decisive leadership.

Going to be an interesting six months.

Quoting Aminobwana (Reply 35):
but he said " l'entente ", meaning the same as in English, i.e. alliance.

A German - French Alliance? For how long? Going to be an interesting six months.

Quoting NAV20 (Reply 30):
The biggest thing that strikes me is that there is STILL no new blood. All the appointees were already in positions of power in EADS before the 2006 collapse - they're what the police would call 'the usual suspects.' Smile God knows where any new ideas are going to come from.

This is the most significant point of all. They are just playing musical chairs, with "Pop goes the Weasel" played every five years on paper, and probably more frequently in reality. Things are getting so bad at Airbus that should simply install a revolving door on the chairman's office door.

Just what will it take for them to finally get the message and do a proper reorganization of this mess?
Now so, have ye time fer a pint?
 
aminobwana
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RE: Eads +Summit 7/16 Sarkozy-Merkel-Daimler-Lagardere

Tue Jul 17, 2007 3:17 am

There is a lot of important info in the French press, I am taking it from LE MONDE, in French:

The most important

1) Both the appointments of Chairman and EADS-CEO are only for 4 years, then the German GRUBE will be substituted by a FRENCH and the FRENCH GALLOIS by a GERMAN. So much for "nationality blindness"

2) Of the five main subsidiaries, Airbus being the most important, only one will be managed by a French, another one by a Spanniard and three (3), incl. Airbus, by Germans
see organization Chart at
[url] http://www.lemonde.fr/web/infog/0,47...-936080@51-852265,0.html[/url]


3) In the survey article by Le Monde
http://www.lemonde.fr/web/article/0,...@2-3234,36-935763@51-852265,0.html
Louis Gallois devient le seul patron d'EADS pour quatre ans (Louis Gallois appointed sole CEO of EADS for 4 years)

it is very clearly said that the French were forced to accept the worse part of the deal, because between other:
* as said, nearly all the enterprise would be under the direct control of Non-French
* the EADS CEO would be substituted by a German in 4 years
* (this I heard on French radio) Even if the Chairman has no executive power, he can make the Board to consider any -----issue he considers convenient. So, even if GALLOIS could theoretically give orders to Enders, the latter could ask ---GRUBE o refer the issue directly to the board
* Enders has no limits on his term !

4) The perception that the deal does not address far enough the basic problems of EADS/Airbus, are widely voiced by the readers of the newspaper. The boss of the larget French Union organization, CGT, writes (free translation of parts)
http://www.lemonde.fr/web/panorama/0...@2-3234,32-936132@51-852265,0.html
Pour la CGT d'Airbus, "on repart ¨¤ z¨¦ro sans r¨¦gler les probl¨¨mes de fond" (For CGT Airbus: Return to Zero without solve the basic problems)

" We take the same players and put them on somewhat different positions"
' we so return to the start point"
" the main problem of Airbus, relatated to the shareholders is not solved by this leadership ------agreement"

_____
As for the other points still to be clarified, pls. refer to reply 32.

aminobwana
.
 
aminobwana
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RE: Eads +Summit 7/16 Sarkozy-Merkel-Daimler-Lagardere

Tue Jul 17, 2007 3:33 am

Quoting Poitin (Reply 37):
). All the decisions, what there may have been, made by Gallois are now going to be reviewed by Enders so nothing has been decided in reality.

This, at least, even it could induce delays between other to the A350, is middle term an advantage.
He is not bound by:
- statement that "the A350 main spec are written in stone' so he would consider seriously the barrel alternative
- also; " we are not in urgent need of funding"
- personal relationship built during his 10 month tenure, si he coulf fire only as an exmaple John Leahy
//and Barbara Kracht
//by the way, there we would see if there is political interference to avoid such !!

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WAH64D
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RE: Eads +Summit 7/16 Sarkozy-Merkel-Daimler-Lagardere

Tue Jul 17, 2007 3:46 am

Quoting Rigo (Reply 24):
Well that's the whole point, actually. From an American point of view, fighting unemployment = getting out of the way of free business. From an European point of view (especially French), fighting unemployment = reigning in. That's why implementing Power8 is most certainly going to be met with political resistance.

None of the developed Western European countries operate in the way you suggest. UK, France, Netherlands, Belgium, Germany, Spain, Portugal, Denmark, Norway, Sweden, Finland are all thriving market economies. I'm sorry to say it but your post as quoted above suggests a certain level of ignorance, not to mention a sweeping and ill-founded generalisation.
I AM the No-spotalotacus.
 
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RE: Eads +Summit 7/16 Sarkozy-Merkel-Daimler-Lagardere

Tue Jul 17, 2007 3:56 am

Quoting Par13del (Reply 36):
So far I'm ok, things like this happen all the time in business, experience, paid your dues, etc, etc. Where I drift is the German response, which was ok, if you don't want to report to him keep EADS and we'll switch him to Airbus.

To be fair, I think that if Enders can get rid of the political pressure, his job will be the more entertaining of the bunch. I'm sure they didn't cut his pay when they made him HNIC at Airbus. The rest of EADS is more or less humming along and is in maintenance mode. Airbus is where all of the improvement needs to be made, and where one could really make a name for onesself.
When they call the roll in the Senate, the Senators do not know whether to answer 'Present' or 'Not guilty.' -Theodore Roosevelt
 
aminobwana
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RE: Eads +Summit 7/16 Sarkozy-Merkel-Daimler-Lagardere

Tue Jul 17, 2007 4:32 am

Quoting N328KF (Reply 41):
To be fair, I think that if Enders can get rid of the political pressure, his job will be the more entertaining of the bunch. I'm sure they didn't cut his pay when they made him HNIC at Airbus. The rest of EADS is more or less humming along and is in maintenance mode. Airbus is where all of the improvement needs to be made, and where one could really make a name for onesself[/quote
I am not sure if the humming around non-civil business of EADS fares better tha Airbus is not because if the competition
is far, far less hard as in the case of Airbus, but this is not waht we are discusing here.

[quote=WAH64D,reply=40]None of the developed Western European countries operate in the way you suggest. UK, France, Netherlands, Belgium, Germany, Spain, Portugal, Denmark, Norway, Sweden, Finland are all thriving market economies. I'm sorry to say it but your post as quoted above suggests a certain level of ignorance, not to mention a sweeping and ill-founded generalisation.

I think, even there are differences between European country and country, there is no doubt that the social aspect is very different compared with the USA. Of course, as the Eurpen see their problem as individual countries and not as EU. there is a problem of size; 300 M persons in the US, less than 60 M (if I remember well) in France, UK, Italy.

So, if in the USA a enterprise with let say 50,000 employees s dying, the Goverment does not care too much

But then, if in extreme cases,in the past, as Chrysler (1st Crisis), Lockheed, Conrail, the Federal Government helped with guarantees, but the hardest measures were imposed on the failing enterprises as condition of the help, first of all the disppearnce of all the responsible managers and drastic personnel reductions (not 10,000, half of them contractors, in 3 or 4 years!).
And it worked !Basically, in the US it is a dogma that sooner than later, week enterprises, if they cannot help themselves must disppear, this is not the way in the EU, even if the UK had some exceptions.
And one thing is obvious: the government do not intervene in the management of enterprises, and this is a big problem in especially in France.

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ikramerica
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RE: Eads +Summit 7/16 Sarkozy-Merkel-Daimler-Lagardere

Tue Jul 17, 2007 4:50 am

Quoting NAV20 (Reply 30):
The biggest thing that strikes me is that there is STILL no new blood. All the appointees were already in positions of power in EADS before the 2006 collapse - they're what the police would call 'the usual suspects.'   God knows where any new ideas are going to come from.

Looks to be a dramatic theatrical process, but ultimately, it's the same Airbus that made all the mistakes of the last few years. It's still a jobs program with various governments sticking their thumbs into all sorts of pies, and now there are MORE governments coming in with Russia and the Arabian buy-ins.

Quoting Par13del (Reply 36):
From a layman perspective, this seems as if it makes no difference to the political arm where either man goes, wonder why? If when they were appointed we took at face value how uniquely qualified each was for his position what does this now show?

ROFL. This is the most important point on this thread. Musical chairs but keeping the same players means either everyone is great at EVERY job, or nobody is great at ANY job.

Quoting Aminobwana (Reply 38):
2) Of the five main subsidiaries, Airbus being the most important, only one will be managed by a French, another one by a Spanniard and three (3), incl. Airbus, by Germanssee organization Chart at

Why not just choose the 5 most qualified people, and ignore their nationality. Oh, wait, this is a government entity. Governments never choose the most qualified people.
Of all the things to worry about... the Wookie has no pants.
 
Maersk737
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RE: Eads +Summit 7/16 Sarkozy-Merkel-Daimler-Lagardere

Tue Jul 17, 2007 4:57 am

Quoting Ikramerica (Reply 43):
Why not just choose the 5 most qualified people, and ignore their nationality. Oh, wait, this is a government entity. Governments never choose the most qualified people.

And the 5 most qualified people are?

Quoting Ikramerica (Reply 43):
Looks to be a dramatic theatrical process, but ultimately, it's the same Airbus that made all the mistakes of the last few years. It's still a jobs program with various governments sticking their thumbs into all sorts of pies, and now there are MORE governments coming in with Russia and the Arabian buy-ins.

And you do think they have a lot to say at the moment? Or will have in the future?

Cheers

Peter
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aminobwana
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RE: Eads +Summit 7/16 Sarkozy-Merkel-Daimler-Lagardere

Tue Jul 17, 2007 5:12 am

Quoting Ikramerica (Reply 43):
Why not just choose the 5 most qualified people, and ignore their nationality. Oh, wait, this is a government entity. Governments never choose the most qualified people.

Only to be clear: I did not say that it is bad that only 1 in 5 is French !!! I only explained why the French are not happy!

aminobwana
 
olle
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RE: Eads +Summit 7/16 Sarkozy-Merkel-Daimler-Lagardere

Tue Jul 17, 2007 5:28 am

It is very simple just saying that the European model is worse for companies then the model in USA. But there si examples where it is different. One os pension and health care obligations. One major problem for the car industr in US is its obligations for its ex employees. In Europe when someone leaves your company your direct obligations finished as well.
 
Wsp
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RE: Eads +Summit 7/16 Sarkozy-Merkel-Daimler-Lagar

Tue Jul 17, 2007 5:40 am

Quoting Aminobwana (Reply 42):
But then, if in extreme cases,in the past, as Chrysler (1st Crisis), Lockheed, Conrail, the Federal Government helped with guarantees, but the hardest measures were imposed on the failing enterprises as condition of the help, first of all the disppearnce of all the responsible managers and drastic personnel reductions (not 10,000, half of them contractors, in 3 or 4 years!).



Quoting Aminobwana (Reply 42):
And one thing is obvious: the government do not intervene in the management of enterprises, and this is a big problem in especially in France.

You seem confused. Either they impose all sorts of measures coupled to their subsidies or they do not intervene, which is it?
 
aminobwana
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RE: Eads +Summit 7/16 Sarkozy-Merkel-Daimler-Lagardere

Tue Jul 17, 2007 6:07 am

Quoting Wsp (Reply 47):
You seem confused. Either they impose all sorts of measures coupled to their subsidies or they do not intervene, which is it?

I an certainly not confused. The government, if asked for a loan or guarantee, does simply what any bank does,

They ask for a clear and comprehensive restructuring plan and if the first draft presented is not satisfactory, they ask for improvement, which generally implies hard measues. Once approved, they verify if it is applied. Nobody tells the management HOW to do it, only they check IF they do it.

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Ruscoe
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RE: Eads +Summit 7/16 Sarkozy-Merkel-Daimler-Lagardere

Tue Jul 17, 2007 6:26 am

Quoting Aminobwana (Reply 45):
I only explained why the French are not happy!

Whatever might have been said, I think we are just kidding ourselves if we think that the French got the worst end of the deal here.

The most powerful position day to day will be the CEO EADS, with the Airbus CEO being subserviant to that position, and you can be sure the Board will be balanced.

The French side who have been trying for years by one means or another to gain control of EADS/Airbus have four years to work out how to protect their position, before the power shifts to the Germans.

Ruscoe