Sarkozy To The (Airbus) Rescue!
He's been in office for just a few days, but French President
Nicholas Sarkozy is already tackling the behemoth called Airbus and
its parent, EADS.
EADS is run under an uneasy dual-management power-sharing
agreement between France and Germany. The French state owns 15
percent of the company.
On Friday, Sarkozy focused on Airbus as the center of his desire
for an "ambitious industrial policy," promising that his government
will seek new investors as well as introducing new cash into EADS,
reported the Associated Press.
"We are ready to follow. We are ready to take the lead. We are
ready to put money in," he said at an Airbus site near the
company's headquarters in Toulouse, southwestern France.
Sarkozy promised to return to Toulouse with German Chancellor
Angela Merkel in July and organize a meeting with shareholders.
"If we fail to make the reforms EADS requires, it is the
credibility of major European industrial projects which is at
stake," he said, seated beside Airbus CEO Louis Gallois.
Sarkozy said Airbus' problems are the result of its shareholder
structure, not management, and that the EADS shareholder pact
should be changed to attract new investors.
"How can you entice new shareholders to invest in the company
with a shareholder pact which gives new shareholders the obligation
to pay, but not the right to vote?" he asked.
Sarkozy also said he wants to outlaw "golden parachute" payoffs
for departing executives and that a proposed law on that very issue
would be considered as soon as July. This comes after the 2006
firing of co-chief executive Noel Forgeard. Even while EADS'
financial situation was deteriorating alarmingly, Forgeard left
with $11.5 million in his pocket.
"I do not accept the idea that people who failed have the
assurance of leaving with a fat check," Sarkozy said.
He also told workers at Airbus
headquarters in Toulouse Friday that the country could eventually
sell its stake, said Reuters.
Reiterating his commitment to helping the recovery at Airbus and
EADS, Sarkozy said he was confident a solution could be found with
Germany and industrial shareholders and said France could one day
sell its 15 percent stake.
"The state will do its task if there is a need for a capital
increase, with the aim of one day putting the state's stake on the
market. The aim is not a partial nationalization of EADS," Sarkozy
said.
"When it goes well again with the company, we could separate us
from it," he added.
Airbus has felt the effects from the falling dollar, the
currency in which it sells its planes.
Additionally, two years of delays to the A380 have taken more
than $6.6 billion from Airbus' profit forecasts for 2006-2010. The
company must also fund development of the A350, its answer to
Boeing's 787 long-range, mid-sized jet. Airbus' restructuring plan,
Power-8, is meant to recoup some of the losses with job and cost
cuts.
As finance minister in 2004, Sarkozy engineered a plan for
rescuing engineering giant Alstom that included a $3.4 billion,
state-orchestrated bailout to steer the company away from
bankruptcy. The bailout brought complaints from EU trade officials
and questions over Sarkozy's pro-market credentials.
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