EADS Co-CEO Louis Gallois To Run Troubled Planemaker
ANN REALTIME UPDATE
10.09.06 1715 EDT: When Christian Streiff offered his plan
to turn around the fortunes of European planemaker Airbus last
week, he essentially told the board of parent company EADS that it
would be his way, or the highway... and on Monday, the
now-former Airbus CEO opted for the highway.
Bloomberg reports Streiff stepped down, after just three months
on the job, following resistance to his proposed restructuring plan
from both politicians and Airbus parent company EADS -- confirming earlier rumors as reported by
Aero-News. For now, the position of Chief Executive at
Airbus will be filled by current EADS co-CEO Louis Gallois.
Analysts suggested Streiff's bolt from Airbus signifies
potential problems down the line for the planemaker's Power8
restructuring plan. That program, first proposed by Streiff October
3, calls for a 30 percent reduction in costs at the planemaker, as
well as severe job cuts.
If Streiff's plan is implemented, those would be the first job
cuts ever in the 36-year history of Airbus... something that has
drawn fire from German and French workers, as well as
"Streiff's departure tends to indicate that it's not
achievable," said Panmure Gordon analyst Nick Cunningham. "I just
don't think that the A380, and Airbus's loss of market share to
Boeing hand-over-fist, has been enough of a shock to make everyone
wake up and realize how much Airbus needs to change to regain its
During past slumps, Airbus managed by simply asking some
employees to work reduced schedules. This time around, however...
many agree the state at Airbus are a little more severe than simply
"It's a stark reflection of the challenges, both political and
structural, that Airbus is facing, and it's disappointing to lose a
champion for the cost-reduction course," said Will Mackie, an
analyst at Mainfirst Bank AG in London. Like Panmure Gordon,
Mainfirst has issued a "sell" rating on shares of EADS stock.
Despite reports of internal strife regarding the program, EADS
stated it remains committed to Power8.
"The new management structure will allow, on the one hand, a
leaner, more efficient corporate governance and, on the other hand,
additional cost savings within the EADS group," the company said
EADS reports Gallois (shown above) will assume duties at Airbus
in addition to his current role at EADS, while all non-Airbus
divisions of the European aerospace consortium will report to EADS
Co-CEO Tom Enders.