Probe Blames ‘Management Errors' For EADS Problems

Management errors and power struggle at the top contributed to the current difficulties of Airbus parent company EADS.

PARIS (AP) - Management errors and an internal power struggle in its top leadership contributed to the current difficulties of Airbus parent company EADS, a French Senate investigation found Wednesday.
Senator Jean-Francois Le Grand said the power struggle between Frenchmen Noel Forgeard and Philippe Camus ''created a disturbance that continues to exist.'' He also blamed ''management errors,'' the strong euro and EADS' ''very complex'' management system for its woes.
He suggested the company was overly optimistic in its forecasts for sales of the A380 double-decker super jumbo.
Fellow Senator Roland Ries said EADS had been ''clumsy'' in presenting a massive restructuring plan, which includes cutting 10,000 jobs across Europe. Airbus is struggling to turn itself around after profit-bruising delays to the A380 and a costly and time-consuming redesign of its mid-range A350 jet.
The Senate probe into EADS got under way last fall, and its conclusions are considered strong but non-binding advice to EADS, and the French and German governments. 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.
The senators questioned an array of people, including EADS co-chief executives Louis Gallois and Thomas Enders.
EADS' unusual structure, run jointly by French and German management, was one of five reasons the senators cited for the company's troubles.
Earlier this year, Airbus announced a restructuring plan following an expensive redesign of the A350 that has delayed its launch to 2013. Problems with the A380 delayed the first delivery of the plane until later this year and wiped out almost $6.7 billion in potential profit.
Le Grand also said Airbus was suffering in its race against Boeing because the U.S. company receives more state support, through research subsidies for military aerospace development. He urged European governments to pump more money into aerospace research to boost Airbus' fortunes.
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