The internal breakdown within Airbus

Forgeard and Enders We hear that there are two camps within Airbus, fighting with each other. Broadly, they are the Anglo camp and the French camp. The former includes Mr. Leahy, and are very frustrated with the entire process around the A340, A350 and A380 programs. Recall mr. Leahy's famous leaked memo on the A340? The latter camp essentially includes the French, and importantly, may not include the Germans. Its the Germans who make up the "swing vote", so to speak, that end up moving the company through the morass it finds itself in. Mr. Leahy is quite close with Mr. Udvar-Hazy, CEO of ILFC, a very important Airbus customer. Mr. U-H has been rather vociferous in his comments about the A350 and, lately, about the A380. This has not been the typical MO of ILFC's leader. Why would Mr. U-H, almost suddenly, become so vocal in expresing his frustration? Why also, you might ask, has Mr Leahy made comments about the market chaos around the A350? Wags love the idea that Leahy and U-H are Americans. There are more questions that arise. Why is the EADS and Airbus situation becoming so important to French politicians? Why is there talk of France getting involved? One would have thought after creating EADS, neither the French government or German government needed to get involved at all. The agreement between two governments restricts the French more than the Germans, because German interests have not been held by the government. Therefore the French are more constrained in terms of next steps. So by talking of increasing its involvement from its 22% stake in EADS, the French government is sending a powerful signal. So as the camps circle, the Germans are cleverly waiting to see what happens next. On the one hand, no German wants to be seen to disturb Euroland unity. On the other hand, nothing makes a German happier than to see the French knocked off their perch of self-importance. In fact the only group happier to see French in-fighting are the British, a core member of the Anglo camp. You can imagine this cocktail of interests is prone to conflict. In fact, a growing problem is that the internal fixes necessary at Airbus are increasingly going to be dictated by outside forces. EADS is looking for a scapegoat, and while Mr. Forgeard is the natural choice, the French camp will fight this because it will give the appearance that France is at fault. Alternatively these forces might want to add the co-CEO at EADS to the head chopping. But he is German and made a public statement that he did not sell his shares and the Germans will not accept Mr. Enders being sacrificed. Mr. Enders is, in our view, likely the future sole CEO of EADS. So he gets support from Germany and the Anglos. And, in our opinion, that is why France is pulling out all the stops on this. In the end, with France's political opposition about to start calling for Mr. Forgeard's dismissal, Mr. Chirac being a lame duck and France political players getting ready for an election, Mr. Forgeard's allies are getting weaker every day. The quiter the Anglos and Germans are the more you can expect to hear noise from the French camp. Time is not on France's side. Isn't it amazing the man who recently referred to French politicians as "excited monkeys" now depends on them for his job more than ever?