[A-List] EU integration struggles: arms industry

["Michael Keaney" <michael.keaney@xxxxxx>]

Germans warn against French coup at Eads
By Gerhard Hegmann in Munich
Financial Times; Nov 13, 2002

Manfred Bischoff, the German co-chairman of European Aeronautic Defence and
Space company (Eads), warned yesterday that an attempt to install a French
leadership at the Franco-German company would be met by fierce opposition
from DaimlerChrysler, which has a stake of 30 per cent.

"We don't want to dominate anyone at Eads, but at the same time we will not
accept [being] dominated by someone else," said Mr Bischoff in an interview
with FT Deutschland.

Eads is the product of the merger in 2000 of France's Aérospatiale Matra,
DaimlerChrysler Aerospace and Construcciones Aeronauticas (Casa) of Spain.
It owns 80 per cent of Airbus, the commercial jet manufacturer, and is a
prime contractor in the Eurofighter project.

Mr Bischoff said Eads' structure - with joint Franco-German chairmen and
joint chief executives in Paris and Munich - was still necessary as "we
don't have a better model and national sentiments in both countries are
still strong. Otherwise we would fall into the category of a nation and as a
result we would lose the market, business and value on the other side".

The structure is viewed by many analysts as unwieldy, amid reports of
tensions over the relative degree of influence on both sides.

Mr Bischoff said the French role would be strengthened by the planned
increase in the country's defence budget for next year. But he believes
Germany will continue to be the crucial partner for military contracts such
as the A400M European transport aircraft.

"We are worried about the German defence budget and the development of
defence programmes and Germany's weakening role within Eads," he said.

German approval is key to the ?18bn ($18.2bn) eight-nation A400M plan, but
months of wrangling have delayed that approval and upset the UK and France.
Mr Bischoff said he strongly believed that the military transporter would be
built despite the delays by the German government. "I cannot imagine that
this programme will not be realised," he said.