business section

Airbus chief readies second phase of reorganization plan

by

Nicola Clark

When he took over as chief executive of Airbus last October, one of his early edicts was to ban the use of national symbols in company Power Point presentations.

"I said, 'I don't want to see any flags on slides,' because when you have a flag you have always an issue of national identity," Gallois, a Frenchman, said over lunch recently at the company's headquarters here. "I want when I am in Hamburg to feel at home like in Toulouse."

At any other enterprise this might seem a minor nit to pick. But for Airbus, the shedding of national identities among its French, German, British and Spanish employees is no small matter.

It has been nearly a year since Airbus and its parent company, European Aeronautic Defense & Space, announced a major delay to its flagship A380 superjumbo. The multi-billion euro bungle threw the management of both companies into turmoil and lit a firestorm of cross-border recrimination that even today infects many working relationships, from the executive suite to the shop floor.

Gallois is the plane maker's third chief executive in 12 months, and despite the upheaval of the past year, analysts say that he has made important progress toward setting Airbus back on track. But healing the company's international rifts has proven more difficult - a challenge that Gallois concedes that he did not fully anticipate.

"It was a discovery," said Gallois, 63, who was chief executive of Aerospatiale Matra - a founding member of the original four-nation Airbus Industrie consortium - before spending a decade as the head of the French national rail service, the Societe Nationale des Chemins de Fer Francais.

"I am surprised by the limited progress made on integration over the last 10 years," he said. "Perhaps it was not the priority because things were working well. But we have seen with the A380 that things are not working well."

The A380 debacle represented a breakdown of a manufacturing system upon which Airbus had relied since its days as a consortium that grouped Aerospatiale with DaimlerChrysler Aerospace of Germany, Construcciones Aeronauticas of Spain and BAE Systems of Britain.