Special Report: Fractured Europe Faces New Battle Over Airbus

By Noah Barkin and Tim Hepher/Reuters

It gave Toulouse-based Airbus, the hugely successful civil jet-making joint venture between France, Germany, Britain and Spain, a dominant parent. And it was a powerful symbol, just a year after the birth of the euro, of Europe’s potential for industrial cooperation.

Its first decade brought major successes: Airbus outsold arch-rival Boeing and launched the double-decker A380 superjumbo, the world’s largest passenger plane.

But the company was also dogged by infighting, as executives like Noel Forgeard, backed by President Jacques Chirac, pushed for French domination and an end to the awkward dual Franco-German management structure.

It wasn’t until Enders was put at the top of Airbus and Louis Gallois became CEO of parent EADS in 2007 that the healing between the Germans and French could begin. By June this year, when Enders took the top EADS post, the days of national strife finally seemed at an end.

Behind the scenes, however, German politicians led by Peter Hintze, a theologian and close party ally of Merkel, were deeply unhappy. Merkel’s aerospace tsar believed the balance of power within Airbus had been tilting toward France for some time.

First, the main A380 factory had been placed in Toulouse. Then the plane maker’s next-generation jet, the A350, was to be built there in a plant named after Beteille. This would give French workers many more jobs in the $15 billion project - up to 42 percent of the total work when top suppliers were included.

In return, Germany negotiated the right to build a successor to the best-selling A320 exclusively in Hamburg. But as struggling airlines looked for fuel savings, Airbus decided instead on a quick, modest revamp of the existing A320 with new engines. The so-called A320neo, to be built in both Toulouse and Hamburg, proved a huge success and boosted EADS stock. But in Berlin the triumph was bitter.

LIST OF DEMANDS

In November last year, Merkel’s government decided that it would purchase a 7.5 percent stake in EADS held by Daimler.

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