Berlin Demands more Germans at Airbus

The German government has sparked a furious row by calling on EADS, the European defence and aerospace group, to put more Germans in top posts at aircraft subsidiary Airbus or risk losing Berlin’s development aid and export-credit guarantees.

In an unprecedented attempt to influence operational decisions at EADS, deputy economics minister Peter Hintze wrote a letter to Tom Enders, Airbus’s German chief executive who will soon take the helm at EADS, to deplore an “unacceptable” bias towards French management and production in France and to demand “a reversal of this trend”.

The demands look set to give Mr Enders a rocky start when he succeeds Louis Gallois as EADS chief executive this spring, and threaten to make a mockery of their shared ambition to make EADS and Airbus “normal” companies free of political inference.

Airbus quickly and brusquely rejected the demands, saying the letter “spoke for itself” and was “not even a basis for any discussion” with Berlin. “Airbus is not going to play any games with questions of balance and proportionality,” it said.

The intervention by Mr Hintze, a close ally of Angela Merkel, the German chancellor, comes after Mr Enders said he was planning to move EADS’ headquarters from Munich and Paris to Toulouse, already home of Airbus, its most important unit.

Although the move is expected to involve no more than 300 people, the announcement revived fears in Germany that the company’s long-prized Franco-German balance was tipping in favour of France just after the German government agreed to take a 7.5 per cent stake in EADS from its co-founder Daimler, the German carmaker.

The German government’s unusually heavy-handed intervention looks set to kick-off another round of the kind of political mudslinging between France and Germany which many executives at EADS had hoped the company had finally put behind it.

With the French government holding 15 per cent and French media company Lagardère a further 7.5 per cent, EADS has been the focus of many an unseemly struggle with Germany, whose stake of 22.5 per cent is still controlled by Daimler.

The letter reflects the German government’s long-held frustration with EADS and Airbus, where it feels it has to maintain a close watch in the face of sometimes aggressive French industrial policy. But this has also drawn it into ever-deeper involvement, making it, as one official noted, “as French, or more French than the French”.

In his late-February letter, seen by the Financial Times, Mr Hintze complained that the €500m in aid Berlin put up for the development of the wide-body A350 aircraft had not led to the promised strengthening of Airbus’s German production sites in Hamburg and Bremen.

As a remedy, he demanded EADS and Airbus ensure “parity” of German and French executives in the “five top tiers” of both companies by January 2017 – and the relocation of some research and development from Toulouse to its two main German sites. 

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