New WikiLeaks Revelations: Bad Blood between German and French Executives at EADS
The Brits are "schizophrenic," the French CEO was an "over-ambitious maniac" and leadership changes were like "musical chairs in the boardroom." Newly uncovered diplomatic cables obtained from whistleblower WikiLeaks illustrate the tension between aerospace giant EADS' European partners.
The tone may be business-like, but between the lines one can read a certain air of self-satisfaction. In April 2008, the US Consulate in Toulouse, France, sent a pair of diplomatic cables about "Airbus and US interests" back to Washington. After three years in office, it was a "farewell report" by the consul general, the first cable noted. His assessment: Aircraft manufacturer Airbus suffered from "an insular, balkanized corporate culture found at all levels."
It was good news for the Americans -- Airbus is, after all, US aerospace giant Boeing's strongest competitor. It is also an open secret that the Germans and the French have wrestled with each other for years for dominance at Airbus' parent company, EADS. But the cables shed new light by showing that EADS executives have been very open about the conflict in talks with US government representatives. That, at least, is the picture painted by cables obtained by the Wikileaks whistleblower platform and shared with SPIEGEL ONLINE. Reuters first reported the contents of some of the cables on Tuesday.
The cables are filled with unflattering assessments shared by EADS managers about their colleagues and their company in general. Critical German managers are cited with particular frequency and can be heard complaining about their French colleagues often.
In one cable dated July 2006, a representative of the US Consulate in Munich described a meeting with two high-ranking German EADS executives in the city, which is home to its German headquarters. Shortly before, EADS' co-chief executive at the time, Frenchman Noel Forgeard, had been forced to step down -- a move the Germans didn't lament at all, saying it had been good for the company. (At the time, the company still had two co-CEOs, one from Germany and one from France.) They described Forgeard as an "over-ambitious 'maniac'." The German half of EADS, it continued "never knew if he acted with the backing of the French government, or was promoting his own agenda."
'Quasi US Firm'
Nor were the Germans perturbed by the decision by BAE systems, the English defense and aerospace firm that had been the company's major British investor, to divest its 20 percent stake in EADS. The cable notes they characterized this as a "case of good riddance" and that "BAE had been a schizophrenic partner anyway, never quite knowing if it was a European company, or a quasi-U.S. firm."
According to the cable, the executives also complained extensively about French intervention, with one of the two even joking to the other: "What do you mean we're not a French company?" The Germans also told the Americans that, from the German perspective, it made sense to preserve co-leadership at EADS for the time being. After all, the cable described them as saying, "as the French made the current mess, it should, after-all, be cleaned-up by a Frenchman."
The US Consulate also had only neagtives to report back to Washington after a meeting with representatives of German EADS shareholder Daimler, the company that is considered to represent the country's interests in the aerospace firm (unlike France, the German government has no direct holding). "The grim atmosphere at EADS was palpable," the cable reads. "It's not hard to come away with the impression of a company under siege." An attempt by Russia to increase its stake in the company and gain influence would open up a "Pandora's box, making EADS' present mess even messier," another cable stated. A subhead in the cable also disparaged leadership changes made shortly before as "musical chairs in the boardroom."
The Germans certainly weren't alone in complaining to the Americans -- the French bickered too. French industrial giant and EADS shareholder Arnaud Largardere, according to the cables, had "unvarnished criticism" of then-French President Jacques Chirac during a lunch with the US ambassador. "Lagardere opined that Chirac messes up everything he gets involved in," the February 2005 cable states. The cable claims the industrialist stated that if Chirac were re-elected as president in 2007, he would "hasten" his exit as a shareholder in EADS, while a Sarkozy victory "would probably mean a later timeline." The cable stated that Largardere "claims a good relationship with Sarkozy."
Plenty to Report
Quarreling over EADS' complex ownership structure proved highly interesting to the US diplomats who, after all, view themselves as the representatives of American business interests, as numerous comments in the cables suggest. An April 2008 cable describes Airbus' "Power8" savings program, with its increased emphasis on a global supply chain, as a development that "should be a golden opportunity for US suppliers." The ambassador in Paris also encouraged industrialist Lagardere in 2005 to meet with Harry Stonecipher, pointing out that the Boeing CEO knew Arnaud's father, Jean Luc. The ambassador said that a year earlier Stonecipher had indicated that he and Jean Luc "could have resolved the Boeing/Airbus dispute." The two companies have fought a long and bitter economic war in recent years over accusations volleyed from each side that the other receives the equivalent of government subsidies.
EADS' officials have remained calm in light of the new details. "If WikiLeaks has nothing better to offer than cables that are five years old, then we aren't very concerned," a spokesperson told SPIEGEL ONLINE. Officials at the US State Department also sought to play down the documents. US diplomats in French provincial areas like Toulouse, where EADS' French Airbus subsidiary is headquartered, are solely there to build stronger "economic, cultural and political ties with the French people beyond Paris," Deputy State Department spokesman Mark Toner told news agency Reuters.
Even five years on, EADS' complicated shareholder structure persists in keeping the company in the headlines. Just a few weeks ago, news that Daimler wants to divest a significant share of its holdings in Europe's largest aerospace company, made headlines around the world. The US diplomats, it appears, still have plenty to report back home.
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