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Solution Emerging for EADS: German CEO and French Chairman

Shareholders of Airbus' troubled parent company EADS are close to a deal that would end a cumbersome dual management system, an official said Monday.

German Thomas Enders may soon be named the sole chief executive of European Aeronautic Defence & Space, while a Frenchman, possibly Arnaud Lagardere, will become sole chairman, an official close to one of the shareholders said.

Frenchman Louis Gallois would retain his role as chief of Airbus, but relinquish his position as co-chair at EADS, where he serves with Enders, said the official, who asked not to be named because such employees are not authorized to talk to the media.

"EADS becomes very French with such an agreement," said CM-CIC Securities analyst Agnes Blazy. "It's a good compromise if they get it."

The possible shift comes just ahead of talks between German Chancellor Angela Merkel and French President Nicolas Sarkozy, who are scheduled to meet at Airbus' headquarters in Toulouse.

The unusual management structure of EADS, which is run jointly by French and German executives, was one reason cited for troubles at Airbus in a report by the French Senate last month. The senators recommended a single chairman and a single chief executive officer, leaving shareholders to debate the trickier question of who would take those seats.

Talks are Ongoing

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

Officials from the French and German governments declined to comment Monday.

EADS spokesman Alexander Reinhardt said shareholder talks are ongoing. He insisted, however, that the current management structure works well, with Enders and Gallois sharing the role of CEO, and Lagardere and German Rudiger Grube sharing the chairmanship.

That could all change if Merkel and Sarkozy endorse single management structure when they meet next week for a Franco-German summit.

Sarkozy made it clear that helping the struggling European plane-maker is a priority in what he envisions as an "ambitious industrial policy." His first visit as president was to Germany where he spoke with Merkel about Airbus. His second trip was to Airbus headquarters.

He promised to seek new investors and said the government is ready to inject new cash into EADS. The German government has so far preferred to leave the management of EADS to its executives.

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