Airbus CEO Tom Enders © Reuters
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A battle is brewing inside Airbus as the board of the European aircraft maker prepares to discuss an overhaul of top management in the wake of a series of investigations into alleged bribery and corruption.
Directors meet on Thursday for the final board meeting of the year, where succession plans for Tom Enders, the German born chief executive, and Fabrice Brégier, the French chief operating officer, will be on the agenda.
The two executives are locked in a power struggle over the board’s plans for management changes, which are seen as necessary to win the support of UK and French anti-corruption authorities for a settlement on allegations of corruption in the use of middlemen to win deals.
An entirely new management team was a key consideration in the decision by UK anti-corruption authorities to allow Rolls-Royce to strike a £672m settlement deal last January.
Airbus’s board is hoping to stagger changes at the top to maintain stability at a challenging time operationally for the group, according to two people with knowledge of the situation. Mr Enders’ contract is not expected to be renewed for a third term when his mandate ends in March 2019.
However, an internal battle is developing over the fate of Mr Brégier, the chief operating officer who ran Airbus’s biggest division for five years from 2012.
People close to Mr Brégier insisted he had no intention of quitting the group, despite reports in French media that he would leave early next year.
“He is doing his job. He considers he has no reason to leave,” one person said.
Mr Brégier told the Financial Times he was “surprised” by suggestions he would leave. “My top priority is to meet Airbus objectives, which is to deliver more than 700 aircraft this year, while ensuring customer satisfaction, creating value for Airbus, its employees and its shareholders,” he said.
Denis Ranque, Airbus chairman, said no decision concerning management of the group had been taken. He said the board would not communicate its agenda and that its deliberations were secret. “But that does not mean that we are not active,” he said.
Nevertheless, people close to Mr Enders said that the chief operating officer was more likely to leave before the chief executive.
Mr Enders himself told Reuters on Wednesday in Toulouse that reports of his “demise” were “premature and exaggerated”.
The board has not yet decided on the extent of management change needed, or the timeline, said one person with knowledge of the situation. Some directors are hoping to limit the change to Mr Enders, whose mandate naturally ends in less than 18 months.
These issues were to be discussed at a board meeting on Thursday, although no final decision was expected. Initially the plan had been to decide the details of any changes next year.
The internal wrangling over who should go and when has brought into sharp focus the tensions that have long marked the relationship between Airbus’s top two executives, Mr Enders and Mr Brégier. They echo damaging divisions more than a decade ago when French and German interests fought for control of the company.
Mr Brégier has long expected to succeed Mr Enders, who was also chief executive of the commercial aircraft arm before him.
For the last decade Airbus has alternated between French and German chief executives as part of a complicated Franco-German power-sharing arrangement dating back to the company’s formation in 1999.
Although in 2012 the French and German governments, which hold 11 per cent each, agreed to reduce their influence over management appointments, the company remains a highly sensitive symbol of national pride in both countries.
Mr Enders, in particular, has come under severe pressure in Paris as a result of the decision to report potential wrongdoing to anti-corruption authorities in the UK and France.
Many in Paris see the action as destabilising Airbus at a time when it is facing significant operational and commercial challenges, and opening the company up to potential litigation in the US, home to its arch rival Boeing.
However, failure to have done so could be far more damaging to Airbus if it is found to have committed offences. The company could be barred from public contracts in the US and elsewhere.
Directors have fully backed the executive committee’s initiatives to stop working with middlemen and establish more robust compliance procedures, said the person close to the board.