I can think of no better example of why politicians and business make for a poisonous and untrustworthy mix than the unfolding disaster at EADS, the parent company of Airbus, and the delays in bringing to market the new A380 airliner that’s the European rival to Boeing’s 787 Dreamliner.
A Wall Street Journal report today analysing the woes at Airbus focuses on EADS CEO Noel Forgeard. The Journal says that Forgeard’s position at EADS became tenuous last week after Airbus announced new delays to the A380, with EADS saying the holdups would cut more than â‚¬2 billion ($2.53 billion) from operating profit during the next four years:
[…] Mr. Forgeard’s job is intensely political: The French state owns 15% of Franco-German aerospace conglomerate EADS. French media group LagardÃ¨re SCA owns 7.5% of EADS. Company rules stipulate that EADS co-Chairman Arnaud LagardÃ¨re chooses the French co-CEO, while the company’s German shareholders choose a German co-chief. But [French President Jacques] Chirac pressed Mr. LagardÃ¨re into choosing Mr. Forgeard in late 2004, according to people familiar with the situation.
There you have one of the major problems with monolithic corporations in Europe where governments own big or majority stakes – they also want to get involved in running those businesses.
So now Forgeard’s grip on the helm of Airbus parent EADS is weakening, says the WSJ, as his base of political support erodes amid the aircraft maker’s worst manufacturing crisis in years and criticism over share sales by the French executive:
[…] Beset by the twin crises, Mr. Forgeard has worked hard in recent days to defend himself against suggestions that his stock trades may have been improper and charges that he should have been more aware of the situation at Airbus, which he ran until last July. He has given several interviews to French media in an effort to rebut the accusations and to shift responsibility to others for Airbus’s toughest industrial crisis in years.
So the finger-pointing and blaming others gets underway. No wonder there is diminishing trust in government and corporations.
Wall Street Journal | Airbus Woes Weaken Forgeard’s Grip at EADS
And if you want another example, see the 10 reasons why Quaero (the European multimedia search engine, the answer to Google and brainchild of the French government) will fail.