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 politicians.

"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 position."

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 a "slump."

"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 Monday.

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.

FMI: www.airbus.com