Bickering Comes As 3,000 Workers Strike In Toulouse

A state of deadlock exists in boardrooms at Airbus parent company EADS, according to news reports, due to political wrangling over a bond issue to raise funds necessary to implement the planemaker's controversial Power8 restructuring plan.

Reuters reports French lawmakers stood in the way this week of advanced plans to bring the bond issue to voters, according to at least three unnamed sources close to the deal. That led to a domino-effect at EADS, said the sources, which is working to resolve production issues that led to Airbus' current state of fiscal turmoil.

A Monday meeting of the EADS board failed to set a dividend payment for EADS investors, the second-such attempt that has failed. The meeting was followed by a staged walkout Tuesday of as many as 3,000 Airbus workers in Toulouse, who were protesting job cuts called for under Power8.

"I'm here because the plan means death for my job," said protester Bernard Camuzet. "With or without the unions, I will do everything I can to save my company."

At the heart of the issue is the question of state versus private control of EADS operations -- the elephant in the room since EADS was formally created in a multinational European merger in 2000. German investors have blasted the French for meddling in Airbus affairs, which critics say are a sign the French government wants greater influence over the troubled planemaker.

"There were disagreements between the French state and the industrial shareholders on this issue at Monday's board meeting," one source told Reuters, adding the French government appeared unwilling to rush the plan to raise funds.

The French government maintains a dividend offering to investors could backfire... potentially influencing a May 6 run-off vote in France. French Prime Minister Dominique de Villepin called on EADS to abandon a dividend offering; conservative presidential front-runner Nicolas Sarkozy has questioned the wisdom of rewarding investors as 10,000 Airbus workers are about to lose their jobs.

EADS shareholders are set to meet May 4.

FMI: www.eads.com, www.airbus.com