The head of Airbus and the co-chief of its parent company resigned on Sunday after the disclosure of production delays for the Airbus A380 jumbo plane and an investigation into insider trading, which together have sent its shares tumbling.
Noel Forgeard, co-chief executive of the parent company, the European Aeronautic Defense and Space Co (EADS), and Gustav Humbert, the chief executive of Airbus, stepped down under pressure from their largest shareholders, the French government and the Lagardere Group of France on one side, and DaimlerChrysler of Germany on the other.
Airbus said last month that the A380, which is to be the largest commercial jet in the sky, would be delivered to customers six months late, reducing projected earnings by 2 billion euros (US$2.6 billion) over the next four years. Shares of EADS have declined more than 10 percent since then.
"As president and CEO of Airbus, I must take responsibility for this setback and feel the right course of action is to offer my resignation to our shareholders," Humbert said in a statement.
Forgeard was criticized after French regulators found that he had sold US$2.5 million worth of EADS stock shortly before the announcement on March 20 that both DaimlerChrysler and Lagardere would be reducing their stakes in the company, and three months before news of the A380 delays erased billions of euros from the firm's market value. He has denied wrongdoing and said the stock sales were coincidental.
Though he later softened his tone, Forgeard struck a defiant note as recently as last Wednesday when he defended his conduct to French legislators. Paris government owns 15 percent of EADS.
The resignation put an end to Forgeard's stint as co-chief executive after only a year but did not impose the thorough reorganization on the management structure that shareholders were calling for. He will be succeeded by Louis Gallois, the current head of SNCF, the railway company owned by the French government.
Gallois, 62, who is already an EADS board member, had served as chief executive of the airplane engine manufacturer now known as Safran. He was also chief executive of Aerospatiale, one of the component companies of today's EADS, from 1992 to 1996.
Humbert will be succeeded by Christian Streiff, 51, the deputy chief executive of the French building materials group Saint-Gobain. Streiff, a French citizen, will head to Airbus with a background in companies that straddle borders. He has experience running operations in Germany, France, Italy and the US.
Humbert, 56, a German who had been the first non-French chief at Airbus, was a less polarizing figure than Forgeard. But he nevertheless paid the price for the A380 delays, which Forgeard had initially blamed on the factory in Hamburg that produces the plane's fuselage, but later appeared to be tied to wiring problems that originated last year, while Forgeard was still co-chief executive of Airbus.
In a nod to the problems at Airbus that led to the current crisis at EADS, the company vowed to "closely integrate" the Airbus jet manufacturing division into EADS itself. EADS controls Airbus, but the Britain's BAE Systems plans to sell its 20 percent share in the plane maker, and EADS said the restructuring would take place as soon as this transaction was completed.
The changes will elevate the standing of Thomas Enders, the German co-chief executive of EADS, while putting a Frenchman, Streiff, back in control of Airbus after a year in which it was run by a German.
While some French officials had called for changes to the "shareholders' pact" that created EADS six years ago, which limits the French government to an advisory role on strategic questions at EADS, the two main shareholders -- Lagardere and Daimler -- chose to defuse the current crisis by simply replacing Forgeard and Humbert.
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