Shareholders Blast EADS Leaders

Associated Press
By TOBY STERLING 05.04.07, 6:29 AM ET

The two chairmen and two chief executives of the parent company of Airbus took turns facing angry shareholders at the company's annual meeting Friday, asking for approval of future plans after a dismal 2006.

The tone was set early as EADS' French co-Chairman Arnaud Lagardere was interrupted by a shouting shareholder before he had finished his opening remarks.

"Sir, you will have the chance to ask questions and receive answers later in the meeting," Lagardere said.

After a delay in the launch of Airbus's A380 superjumbo airplane has stretched into two years, the European Aeronautic Defence & Space Co. posted a loss of euro768 million ($1.01 billion) in the October-December period.

Airbus still delivered more planes than major rival Boeing Co. in 2006, but is expected to fall behind somewhere in 2008, given current order backlogs.

The company has announced a major restructuring program, shedding 10,000 jobs across Europe - especially in France and Germany, where the bulk of the company's operations are based.

That has led to strikes, two of which were ongoing at plants in Saint-Nazaire and Nantes in western France even as Friday's meeting took place.

Airbus workers blame bad management - and shareholder demands - for their troubles.

"It was the financial demands of the shareholders that brought us here," Patrice Bernard, a CGT labor union representative at the Nantes Airbus plant, said Thursday.

German co-Chairman Rudiger Grube - appointed in April - told shareholders Friday the board recommended not paying any dividend in 2006, but shareholders will have to propose and vote on a dividend later at the meeting. Grube said that, depending on the dividend and company's financial performance, it will also need to consider whether to raise money, either by debt or by issuing equity to new investors.

The French government currently owns 15 percent of EADS, while Paris-based Lagardere SCA owns 7.5 percent. Their combined stake is balanced by Stuttgart, Germany-based DaimlerChrysler AG, which holds 22.5 percent of voting rights in the defense group.

EADS is to publish first-quarter earnings next week.