As could be delays in the Airbus A380 schedule

One year. Noël Forgeard is will be held a year at the head of EADS before ending in an ejection seat. It after having struggled for five years to dislodge Philippe Camus branch, is in turn in the eye of the cyclone politico - media. In a few weeks, Noël Forgeard rose from the rank of great industrial to boss 'scum', according to the words of Nicolas Sarkozy Thursday, June 22. Certainly, Noël Forgeard did not expect to know such a mishap. But, it was predictable. As could be delays in the Airbus A380 schedule. Having lived for five years removed from the world in Toulouse, with a circle singing his glory and his hiding bad news, ignoring German managerial culture, and without any real support on the part of Arnaud Lagardère, French shareholder, Noël Forgeard was not armed to avoid the poorly. And the French press, which loves burn his idols, buried it already. To understand what happened, a small historical return on large and the small hours of Airbus and EADS simposent.

1 / The appointment of Noël Forgeard at Airbus

It was in December 1997 that the French Government announces that it has selected Noël Forgeard to succeed Jean Pierson, the administrator managing the Airbus GIE. A surprise appointment: no one imagined that position draws escape officer of Aerospatiale. But Jean-Louis Gergorin was able to convince Lionel Jospin, then Prime Minister, and Dominique Strauss-Kahn, Minister of economy and finance, lieutenant Jean-Luc Lagardère was best to even to defend French interests to the ambitions of the Germans. He has developed a plan called Airbus Plus Plus to transform the strategy in a company by merger within of the main activities of the parent companies (Aerospatiale, Dasa, Casa and BAe) of Airbus.

First problem: the wage claims of Noël Forgeard month push the decision of the Board of Directors to endorse his appointment, the Germans opposing. Just arrived, Noël Forgeard and Philippe Delmas, which joined it in March 1998 on the advice of Gergorin which he was the Assistant in Lagardère, realize that the Germans and the British will do everything to oppose the implementation of Airbus Plus Plus. This project was quickly abandoned. Engineers of Aerospace Toulouse then presented them the draft of a very large carrier aircraft that can compete with the Boeing 747. Forgeard is his battle horse print its mark on Airbus.

2 / The creation of the integrated Airbus company

The commercial war against Boeing and the enlargement of the range of aircraft require partners to reform the Organization to allow Airbus to integrate studies offices and production: this new architecture is supposed to help the European manufacturer to improve its competitiveness and its industrial performance. Noël Forgeard, which does not mean having to be accountable to anyone, gets through the intervention of Jean-Louis Gergorin, very broad autonomy to the head of Airbus, the Board of Directors simply to endorse the major strategic decisions. Reporting in EADS, the principal shareholder, is reduced to its simplest expression. A situation which upset Jean-Luc Lagardère: by 2000, he organized a monthly meeting in his Office with Philippe Camus and Noël Forgeard to review the situation of Airbus. After his death, Arnaud Lagardère, who succeeded his father, will abandon this regular appointment.

3 / The problems of development of the A380

In December 1999, Noël Forgeard finally gets the green light to its Board of Directors to launch the A380. A success that it must Jean-Luc Lagardère: businessman beaten to convince the reluctant. Including those who were concerned about the enormity of the invoice (more than 10 billion dollars) and risk thus incurred. Airbus announces then a calendar which appears reasonable with a first flight in 2005 and the start of deliveries to client airlines in 2006. But problems will soon arise. The first concerns the industrial organization of Airbus. Despite the transformation of the company, Airbus remains a mosaic where the national clans opposed: the infighting that have engaged French and Germans in the 1990s to take control of the aircraft manufacturer have left deep traces. The German sites do little accounts branch installed in Toulouse. The development of the A380 will prove to be problematic: the aircraft is penalized by a weight problem. It should be slim, to ensure its actual performance in line with what was offered to the airlines. Until 2005, Charles Champion teams, in charge of the project, will focus on the settlement of this problem. Finally, by offering the possibility to customize the cabins to airlines, Airbus was complicated the task, the integration of new multimedia equipment is revealing more difficult than expected.

4 / The production delays

In June 2005, Noël Forgeard, whose appointment to the head of EADS has just been confirmed, formalizes the delays in the production of the A380. Cause: the development of the cabins. Various applications companies problem

to Airbus. But, the extent of the difficulties appear to be reduced: the delay is only a few months and the supposed cost is estimated between 50 and 100 million euros. Not what scaring off investors. But Airbus and EADS directions say what they know "In April 2005, Philippe Camus visited the hall of Assembly of the A380." "When he returned to Paris, he was collapsed by the situation and said that there is at least a year on the calendar," remembers a consultant. "I have nothing to say about this", said Philippe Camus. If Philippe Camus really realized that havoc reigned at Toulouse in April 2005, how could Noël Forgeard, who was the patron of Airbus until June 2005, not be aware that the situation was more serious than what he announced in June

5 / The bad relationship between EADS and Airbus

By obtaining branch of EADS, Noël Forgeard did everything to avoid that a weight, French leader, take the direction of the aircraft manufacturer. Hence the idea of entrusting the direction of the aircraft manufacturer to German Gustav Humbert. Forgeard was then able to control his former Deputy, flanked by his relatives. In fact, when he was appointed, Humbert took its autonomy to Forgeard, and communication was poor.

6 / Lagardère and DaimlerChrysler stall

After several months of negotiations between Paris and Berlin, Lagardère and DaimlerChrysler get the green light to sell each 7.5 of the capital, in early April 2006. The EADS share price was at its highest. A few days earlier, with a statutory period of exercise of stock options, Noël Forgeard and other French leaders host a comfortable capital gain. A posteriori, the case may seem not very moral, but legally they were respected to the letter the conditions for exercise of stock options and information. Were they aware that the situation had deteriorated at Airbus Perhaps not formally, Airbus having not yet reached the alarm signal. But the words loaned to Philippe Camus and that the latter does belies not show at least that they perhaps not all did to make sure that everything was actually for the better.

7 / Airbus informed EADS its difficulties

Noël Forgeard, it is, therefore, in April 2006 that Airbus Cree Wolf. Immediately an internal audit is launched to determine the extent and implications of the delay of the A380. Audit which led mid-June and was released, causing the downfall of the course of the parent. Problem: knowing that the situation was becoming untenable, why have EADS Executives and shareholders said, including at the general meeting of shareholders in mid-May, that there was no problem at Airbus Taking this point, do not have taken steps risk of being reproached for disseminating false information

(8) What can happen now

The Government wants to impose significant changes. But nothing can be done without the agreement of the Germans and Lagardère. Hard to imagine that Arnaud Lagardère thus agrees to give up the Presidency of the Board of Directors, position held by his father. Can the France accept a simplification of the management by entrusting the only Thomas Enders, branch without acknowledging loss of major influence in one of the rare European champions The course of history replaying nevertheless brings several reflections. First of all, the work of integration at Airbus was did not. It will be when a French pattern will lead the Hamburg site and when that of Toulouse will be German, British or Spanish. Second point: the wide autonomy enjoyed by the Airbus boss turns dangerous when the situation worsened. Information better must circulate between EADS and its subsidiary.

Only the desire for revenge against the other one says the curée triggered against Noël Forgeard. It would be fair that the questions put to him are also Gustave Humbert and Thomas Enders, including.

BOX .

Y-a-t-il had tort of insiders

If most financiers are furious against EADS and Noël Forgeard, in particular, in which they criticize the mismanagement of the difficulties encountered by the House-mother of Airbus, they are very cautious about the possibility of a tort of insiders. A Parisian Analyst believes that it is more than an "unfortunate confluence of circumstances", to any offence of insider. "The case" stock-options could encourage Governments to review the sale proceedings: "why not insist that a leader can only exercise its stock-options only when he leaves the company", makes a great pattern.

Finally, over the sale of the stock-options, Noël Forgeard is faulted her management and especially his determination to prevent the appointment of a Frenchman at the head of Airbus, Fabrice Brégier, for the benefit of Gustav Humbert. Cross reporting rule, a French reference to German and vice versa, the appointment of Humbert was to allow him to keep the upper hand on Airbus. Is there nothing summer, on the contrary. B.L.