Airbus Parent Abandons Dual CEO Structure

EADS, the parent of troubled planemaker Airbus, is abandoning its twin-chief executive structure, with France's Louis Gallois taking the company reins in a deal to simplify the company's cumbersome management arrangement.

Shareholders agreed that German Ruediger Grube is to be the sole EADS chairman, the company said. German Thomas Enders takes over Gallois' former role as chief executive of Airbus, stepping down as co-CEO of EADS.

French President Nicolas Sarkozy said the deal marked "a big day for this company," a sentiment that German Chancellor Angela Merkel echoed during their meeting at Airbus headquarters in Toulouse. "The Germans are very happy," Merkel said.

Sarkozy said EADS and Airbus "should be managed like companies and not like international organizations."

"How could you expect a company that has a dual command at every level, a double nationality at every level, to succeed?" he said. "We can't leave things like that."

Enders called the new arrangement a "balanced solution." He will report to Gallois, now responsible for leading the management team in EADS' strategy and keeping in contact with shareholders. Grube will oversee Gallois' decisions and lead a newly created "strategic committee," EADS said.

Enders said working with Gallois had given the two a "practiced" and "crisis-tested" base, adding, "I get along with him very well."

Gallois told reporters he was satisfied.

"I'm very happy with my future job, which is very close to what I do now," Gallois said.

Investors seemed satisfied but not overwhelmed, sending EADS shares up 0.3 percent to $33.17 in Paris.

In Toulouse, Sarkozy and Merkel met with Airbus employees and shareholders and visited the superjumbo A380 assembly line.

The unusual structure of European Aeronautic Defence & Space Co., run jointly by French and German management, was cited in a report by the French Senate last month as a major reason for Airbus' troubles.

Sarkozy's office said that every five years, the EADS leadership posts will alternate between the French and Germans. Arnaud Lagardere, who relinquishes his job as EADS co-chair under the new deal, will be offered Grube's job in five years if wants it, Sarkozy said.

EADS said the changes "will reinforce the efficiency of the group," with more day-to-day leeway to Gallois and his executive team, and board decisions taken by a simple majority vote.

Shareholders will be asked to approve the new structure at a general meeting to be held sometime from October-December.

Decisions on the search for new investors, new investment and changes to the shareholder voting structures will be not be addressed for several months, the leaders said.

The French government owns 15 percent of EADS, and French conglomerate Lagardere Groupe SCA holds 7.5 percent. The German government holds no direct stake, but Stuttgart, Germany-based DaimlerChrysler and German banks hold 22.5 percent.

EADS has been tarnished by a series of mishaps over the past two years at Airbus, with delays to A380 and a revamp of the A350 coming amid revelations of management errors, technical woes and huge severance payments for departing executives.

Top executives have been ousted and a massive restructuring plan will result in 10,000 job cuts over four years. The setbacks have cost the company billions of euros in profits and saddled Airbus with its first-ever operating loss last year.

Besides the management structure, EADS has other pressing issues to sort out, including the delayed A380 and the financing of the midsize, long-range A350 XWB, subject of a costly redesign. The implementation of the restructuring program also needs attention, and unions have questioned the need for job cuts after a raft of orders were announced at the Paris air show last month.

Jean-Francois Knepper, of the Workers Force union, criticized the new management structure as a mere shuffling of chairs.

"The actors have been shifted around but the struggles for power and influence will continue," he said.