France, Germany Strike Deal on EADS Management
France and Germany agreed on Monday to streamline the dual-nationality management structure at European aerospace giant EADS, seeking to end governance problems that have plagued the company.
EADS's co-CEO, German Tom Enders, told reporters that in future he would take sole charge of EADS's airplane unit Airbus.
Frenchman Louis Gallois would be the sole CEO of EADS and Daimler's Ruediger Grube will be chairman of the group.
French President Nicolas Sarkozy and German Chancellor Angela Merkel are due to meet later on Monday at the Airbus headquarters in the southwestern city of Toulouse to rubber stamp the accord, officials said.
EADS shares were up 0.8% at 24.17 euros in Paris, outpacing the rest of the French market.
EADS has been hamstrung by disagreements between French and German shareholders, politicians and staff over output delays at its airplane unit Airbus, and Sarkozy has been pushing for changes at the group.
Monday's summit comes at a time of growing strains in the Franco-German relationship, with the recently-elected Sarkozy annoying Berlin by criticizing the strength of the euro currency and questioning the role of the European Central Bank.
However, the main thrust of the Toulouse meeting was EADS, which earlier this year announced 10,000 job cuts across Europe in a bid to make savings after delivery delays to its A380 superjumbo that knocked investor confidence in the firm.
Monday's deal represents a sea-change in French thinking over the company, with Paris previously eager to keep Airbus, EADS's crown jewel, under its control.
Gallois currently serves as both CEO of Airbus and joint-CEO of EADS. Sources said Gallois had been asked to drop his EADS position, but that he had refused to report to the younger Enders. Germany then suggested switching Enders to Airbus.
"It is a good decision for the company as a whole, a good decision for me because it is here at Airbus where the future challenges are, where the future competitiveness of the company as a whole will be determined," Enders said.
Under a deal that dates back to the EADS foundation, the French government holds a direct 15% stake in the company, while a further 7.5% is owned by French conglomerate Lagardere.
German carmaker DaimlerChrysler owns a matching total 22.5% of voting rights.
EADS currently has two chief executives and two chairmen.
Sarkozy met Airbus workers and called for changes to the way EADS was run when he was elected in May, following a campaign marked by public outcry over the Airbus job cuts and squabbling between Paris and Berlin over the way they were shared out.
Sarkozy's energetic lobbying for a deal reflects French political frustrations that the French state has limited power in the running of EADS, despite its sizeable stake.
Sarkozy and Merkel are due to make a joint declaration around 12:15pm London time before a second round of talks in the afternoon.