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European Aeronautic Defence and Space Company EADS N.V.
Type	Public (Euronext: EAD, FWB: EAD)
Founded	2000
Headquarters	Ottobrunn, Germany Paris, France Schiphol-Rijk, The Netherlands
Key people	Louis Gallois (CEO) Rüdiger Grube (Chairman)
Industry	Aerospace, defence, and telecommunications
Revenue	€39,434 million (2006)
Operating income	€399 million
Net income	€99 million
Employees	116,805 (2006)
Parent	SOGEADE Daimler AG
Subsidiaries	Airbus EADS Astrium Eurocopter MBDA (37.5%)
Website	www.eads.eu

See also: Eads, Colorado

The European Aeronautic Defence and Space Company EADS N.V. (EADS) is a large European aerospace corporation, formed by the merger on July 10, 2000 of DaimlerChrysler Aerospace AG (DASA) of Germany, Aérospatiale-Matra of France, and Construcciones Aeronáuticas SA (CASA) of Spain. The company develops and markets civil and military aircraft, as well as missiles, space rockets, satellites, and related systems.

Contents 1 History and activities 1.1 Formation 2 Divisions 3 Management 4 Shareholders 5 Criticism 5.1 Cluster bombs 5.2 Bribery 5.3 Alleged insider trading 6 See also 7 References 8 External links

The 1997 merger of American corporations Boeing and McDonnell Douglas, which followed the forming of Lockheed Martin, the world's largest defence contractor in 1995, increased the pressure on European defence companies to consolidate. In June 1997 British Aerospace Defence Managing Director John Weston commented "Europe... is supporting three times the number of contractors on less than half the budget of the U.S.".^[1] European governments wished to see the merger of their defence manufacturers into a single entity, a European Aerospace and Defence Company.^[2]

As early as 1995 the German aerospace and defence company DaimlerChrysler Aerospace (DASA) and its British counterpart British Aerospace were said to be keen to create a transnational aerospace and defence company.^[3] The two companies envisaged including Aérospatiale, the other major European aerospace company, but only after its privatisation.^[4] The first stage of this integration was seen as the transformation of Airbus from a consortium of British Aerospace, DASA, Aérospatiale and Construcciones Aeronáuticas SA into an integrated company; in this aim BAe and DASA were united against the various objections of Aérospatiale.^[5] As well as Airbus, British Aerospace and DASA were partners in the Panavia Tornado and Eurofighter Typhoon aircraft projects. Merger discussions began between British Aerospace and DASA in July 1998, just as French participation became more likely with the announcement that Aérospatiale was to merge with Matra and emerge with a diluted French government shareholding.^[6] A merger was agreed between British Aerospace Chairman Richard Evans and DASA CEO Jürgen Schrempp in December 1998.^[7] However when the British General Electric Company put its defence electronics business Marconi Electronic Systems up for sale on 22 December 1998, British Aerospace abandoned the DASA merger in favour of purchasing its British rival. The merger of British Aerospace and MES was announced on 19 January 1999.^[8] Evans stated that in 2004 that his fear was that an American defence contractor would acquire MES and challenge both British Aerospace and DASA.^[7]

DASA and the Spanish aircraft company Construcciones Aeronáuticas SA agreed to merge with the signature of a memorandum of understanding on 11 June 1999.^[9] On 14 October 1999 DASA agreed to merge with Aérospatiale-Matra to create the European Aeronautic Defence and Space Company.^[10] 10 July 2000 was "Day One" for the new company which became the world's second largest aerospace company after Boeing and the second-largest European arms manufacturer after BAE Systems.^[11]

In January 2001 Airbus Industrie was transformed from an inherently inefficient consortium structure to a formal joint stock company, with legal and tax procedures being finalised on 11 July.^[12][13] Both EADS and BAE transferred ownership of their Airbus factories to the new Airbus SAS in return for 80% and 20% shares in the new company respectively. In April 2001 EADS agreed to merge its missile businesses with those of BAE Systems and Alenia Marconi Systems (BAE/Finmeccanica) to form MBDA. EADS took a 37.5% share of the new company which was formally established in December 2001 and which thus became the world's second largest missile manufacturer.^[14]

On 16 June 2003 EADS acquired BAE's 25% share in Astrium, the satellite and space system manufacturer, to become the sole owner. It was subsequently renamed EADS Astrium. In November 2003, EADS announced that it was considering working with Japanese companies, and the Japanese METI, to develop a hypersonic airliner intended to be a larger, faster, and quieter, replacement for the Concorde, which was retired in October the same year.

In March 2007 EADS Defence and Security Systems division was awarded a eight year, £200m contract to provide the IT infrastructure for the FiReControl project in the UK.^[15]

• Airbus
• Eurocopter
• Military Transport Aircraft – EADS produces military transport aircraft, mainly through Airbus' majority ownership of Airbus Military which manufactures the Airbus A400M.
• EADS Astrium
  • EADS Astrium Satellites
  • EADS Astrium Space Transportation
  • EADS Astrium Space Services.
• Defence & Security
  • Defence Electronics
  • EADS Military Air Systems, including products such as the Mako/HEAT, and stakes in the following companies:
    • Dassault Aviation (45.76%) – manufacturer fighters like the Dassault Rafale or the Dassault Mirage 2000.
    • Eurofighter GmbH (46%) – manufacturer of Eurofighter Typhoon.
  • Defence and Communication Systems
  • MBDA (37.5%) – missile manufacturer
• EADS North America – the U.S. holding company for the North American activities of EADS.
• ATR (50%) – regional aircraft manufacturer
• EADS Socata
• EADS EFW
• EADS Sogerma
• EADS 3 Sigma – a Hellenic company focused in the design, development, production and services provision of airborne and surface target drone systems.
• EADS also has a 30% stake in Arianespace

EADS' Executive Committee is headed by Louis Gallois, the EADS CEO. Other members are François Auque (Astrium), Lutz Bertling (Eurocopter), Jean Botti (Chief Technical Officer), Fabrice Brégier (EADS Operational Performance), Ralph Crosby (EADS North America), Thomas Enders (Airbus), Jussi Itävuori (Human Resources), Marwan Lahoud (Chief Marketing and Strategy Officer), Hans Peter Ring (Chief Financial Officer EADS and Airbus), Carlos Suárez (Military Transport Aircraft) and Stefan Zoller (Defence and Security).^[16]

The Executive Committee is appointed by the board of directors, itself appointed by Daimler AG and SOGEADE. Both appoint four directors plus one independent director. As of July 2003 SEPI no longer nominates a board member, but a Spanish director is retained as the 11th member.^[17] The board also appoints the company's chairmen, one from the Daimler nominated directors and from the SOGEADE nominated directors. As of September 2007 the Chairmen are Rüdiger Grube and Arnaud Lagardère. The other board members are Louis Gallois, Thomas Enders, Hans Peter Ring, Juan Manuel Eguiagaray, Michel Pébereau, Bodo Uebber, François David and Michael Rogowski.^[17]

In late 2004 Noël Forgeard (then Airbus CEO) was nominated by Lagardère as the next French CEO of EADS. Forgeard had suggested that this system should be abolished in favour of a single CEO in a move that DaimlerChrysler saw as an attempt to engineer a French dominated management team. Following protracted arguments, which caused embarrassment to EADS at the Paris Air Show, the appointment was confirmed by the EADS Board of Directors on June 25, 2005. At the same meeting the Board, in consultation with partner BAE Systems, named Gustav Humbert as President and CEO of Airbus.

As of 3 July 2007 41.63% of EADS stock is publicly traded on six European stock exchanges, while the remaining 58.37% is owned by a "Contractural Partnership".^[18] The latter is owned by SOGEADE (27.38%), Daimler AG (22.41%), SEPI (5.46%) and Dubai Holding (3.12%).^[19] SOGEADE is owned by the French State and Lagardère, while SEPI is a Spanish state holding company. France also owns 0.06% of publicly traded stock.^[18]

In October 2005 the British Ministry of Defence warned European politicians to stop, as it sees it, interfering in the corporate governance of EADS. The UK Defence Procurement Minister Lord Drayson has hinted that the UK government, a major customer for EADS, may withhold future contracts. "As a key customer, we see it as important for EADS to move in a direction that is free from political interference." ^[20]

On April 4, 2006, DaimlerChrysler announced its intention to reduce its shareholding from 30% to 22.5%. The company places a value of the stake at "approximately €2.0 billion." ^[21] Lagardère will reduce its holding by an identical amount. However, Caisse des Dépôts et Consignations, a unit of the French government, acquired 2.25% of EADS. At issue as a result is the fact that the German and French shareholdings are now in imbalance.^[22]

On August 30, 2006, shortly after the stock price decline caused by the A380 delivery delays, more than 5% of EADS stock has been reportedly purchased by the Russian state-owned Vneshtorgbank.^[23] Now its share is nearly 6%.

On October 3, 2006, shortly after EADS admitted further delays in the Airbus 380 program would cost the company 4.8 billion euros in lost earnings in 2010, EADS shares, traded on the Paris arm of Euronext, were suspended after they surpassed the 10 per cent loss limit. Trading resumed later in the day with the one day loss holding at 7 per cent [3].

As a result of criticisms, the Norwegian Government Pension Fund excluded EADS and its sister company EADS Finance BV from its portfolio in 2005, arguing that EADS manufactures "key components for cluster bombs." EADS and its subsidiaries fulfill all the conditions of the Ottawa Treaty. No product of EADS or its subsidiaries falls into the category of antipersonnel mines as defined by the Ottawa Treaty ("landmines under the Ottawa Treaty"), also all activities undertaken by EADS are in accordance with the national and international rules and regulations that apply to the company. EADS owned the company TDA in a joint venture with the company Thales S.A. and TDA produced the mortar ammunition PR Cargo, which can be considered cluster ammunition, however this has since been divested. In April 2006 the fund declared that the basis for excluding EADS from investments related to production of cluster munitions is no longer valid, however its shareholding of MBDA means the fund still excludes EADS due to its indirect involvement in nuclear weapons production.^[24]

In 2003 Tony Yengeni, former chief whip of South Africa's ANC, was convicted of fraud relating to an arms deal with South Africa, in which EADS were major players^[25], worth around $5bn. The BBC reported that EADS had admitted that it had "rendered assistance" to some 30 senior officials to obtain luxury vehicles, including defence force chief General Siphiwe Nyanda.^[26]

On June 2, 2006 co-CEO Noël Forgeard and Airbus CEO Gustav Humbert resigned following the controversy caused by the June 2006 announcement that deliveries of the A380 would be delayed by a further six months. Forgeard was one of a number of executives who exercised stock options in November 2005 and March 2006. He and 21 other executives are under investigation as to whether they knew about the delays in the Airbus A380 project which caused a 26% fall in EADS shares when publicised.^[27]

The French government's actions are also under investigation; The stated-owned bank Caisse des Dépots et Consignations (CDC) bought part of Lagardère's 7.5% stake in EADS in April 2006, allowing that latter to partially escape the June 2006 losses.^[27]

• European defence procurement

• Corporate website
• EADS North America
• Yahoo! — European Aeronautic Defence and Space Company EADS N.V. Company Profile
• Russian capital acquires large stake in EADS

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