French Government Wants Action On EADS

French Prime Minister Dominique de Villepin said June 21 there were "urgent decisions to be taken" on the troubled European aerospace group EADS in which the French state is a major shareholder. He also said in a speech to parliament that his government was determined "to take all the measures necessary so that EADS secures its production deadlines and supplies its clients."

EADS shares plummeted last week after its aircraft manufacturing unit Airbus announced a second six-month delay in deliveries of its A380 superjumbo airliner.

Airbus had overtaken archrival Boeing in the highly competitive market for passenger jets, but Boeing is set to regain the lead this year. The A380 delay could prompt clients to demand compensation or even cancel orders.

On June 20, Finance Minister Thierry Breton said he had met with EADS co-chairman Arnaud Lagardere "to speak with him about possible changes" in the group's shareholding and management.

France's Transport Minister Dominique Perben said earlier June 21 the French state wanted to preserve the French-German pact on management structure at EADS. Matthias Wissmann, the head of the German parliamentary committee for EU matters, warned that the Franco-German pact must be maintained. "The challenges for the European aerospace industry lie in competition with rivals in the U.S. and emerging companies in India and China. In face of globalization, there is no room for intra-European in-fighting or a re-nationalzation in the sense of industrial patriotism," he said.

EADS co-chief executive Noel Forgeard came under fire after the news of the delivery delay when it emerged that he and other senior executives had sold shares in the group in mid-March. Forgeard, who has said he first learned of possible delays in April, has insisted he had no "privileged information" when the sales were made. The French stock market regulator AMF had already begun an investigation into EADS stock movements. DaimlerChrysler, the French state, and Lagardere are among the group's major shareholders, although both DaimlerChrysler and Lagardere sold 7.5% stakes in early April. France holds a 15% interest.

Copyright Agence France-Presse, 2006

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