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A Dogfight over Airbus' Next Pilot

By Carol Matlack Who'll be the next boss of Airbus? Noöl Forgeard, who has overseen the European plane maker's rapid ascent for the past seven years, was picked last December to become co-chief executive of Airbus' parent, European Aeronautics Defence & Space (EADS). But with Forgeard scheduled to take over his new job in May, no successor is in sight at Airbus, now the world's No. 1 jetmaker with $26 billion in annual sales.

The problem, according to company insiders: a standoff between French and German interests within EADS. Germany's DaimlerChrysler (DCX), which owns 30% of EADS, has blocked France's preferred candidate, Gérard Blanc, the Airbus executive vice-president for operations, who has long been seen as Forgeard's heir apparent.

Blanc, 61, has decades of aerospace experience, including 20 years at Airbus, and is known as a skilled manager. But he angered the Germans by aggressively pushing to locate the final assembly plant for the new A380 doubledecker jet in Toulouse, France. The Germans wanted to put the plant in the port city of Hamburg, in many ways a more logical site, since Airbus must use elaborate convoys of barges and trucks to get pieces of the plane to landlocked Toulouse.

GOVERNMENT HELPED. If Blanc's candidacy is on the ropes, it's far from clear who else could get the job. Two leading contenders are Fabrice Brégier, 43, who has headed the EADS Eurocopter division since 2003, and Charles Champion, 49, a French engineer who has overseen the A380 project since 2002. While both are highly regarded, their relatively short experience in top management could be a handicap in running such a complex company.

The ideal solution, an EADS insider says, would be to find an Anglo-Saxon to run Airbus. That would not only end the Franco-German power struggle, it could help defuse tensions with the U.S. over aircraft subsidies. To the alarm of EADS officials eager to secure U.S. defense contracts, Forgeard has said he plans to seek European government loans to finance development of a new Airbus plane, the A350. This comes even as U.S. and European trade officials are trying to avoid a World Trade Organization battle over subsidies.

Once again, potential candidates are scarce. One name that has been mentioned is John Leahy, Airbus's American-born chief of sales. He was in Tokyo on Feb. 9 announcing a major coup for Airbus: the hiring of a well-connected American businessman and former U.S. trade official as head of its Japan unit. Airbus hopes that the new exec, Glen Fukushima, will help unlock archrival Boeing's (BA) stranglehold over the lucrative Japanese market for commercial aircraft.

TEST FLIGHTS. But while Leahy may be a superstar salesman, he has no background in engineering or managing large aerospace projects. Another possible source of executive talent is Britain's BAE Systems, which owns 20% of Airbus. But no strong candidate has emerged there, either.

This is a crucial year for Airbus: The first A380 rolled out of the factory in January, and the aircraft is now undergoing tests in preparation for entering commercial service in spring, 2006. Meanwhile, the engineering and marketing departments are gearing up to develop the A350, Airbus's answer to Boeing's new superefficient 787. And that nagging trade dispute over subsidies remains.

One thing is certain: Airbus can't afford to wait much longer for a new face in the cockpit. With Chester Dawson in New York

Matlack is a correspondent in BusinessWeek's Paris bureauWith Chester Dawson in New York

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