EADS
Encyclopedia
The European Aeronautic Defence and Space Company N.V. (EADS) is a global pan-European aerospace and defence corporation and a leading defence and military contractor worldwide. The group includes Airbus
as the leading manufacturer of commercial aircraft, with Airbus Military
covering tanker, transport and mission aircraft; Eurocopter as the world's largest helicopter supplier; Astrium, the European leader in space programmes from Ariane
to Galileo; and Cassidian as a provider of comprehensive and integral systems solutions for aerial, land, naval and civilian security applications. Through Cassidian, EADS is a major partner in the Eurofighter consortium as well as a key stakeholder in the missile systems provider MBDA
. In 2009, the EADS generated revenues of €42.82 billion and employed 119,500 personnel. EADS was formed on 10 July 2000 by the merger of Aérospatiale-Matra
of France, DaimlerChrysler Aerospace AG (DASA) of Germany, and Construcciones Aeronáuticas SA (CASA)
of Spain. Overall, the company develops and markets civil and military aircraft, as well as communications systems, missiles, space rockets, satellites, and related systems.
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.". European governments wished to see the merger of their defence manufacturers into a single entity, a European Aerospace and Defence Company.
As early as 1995 the German aerospace and defence company DaimlerChrysler Aerospace (DASA) and its British counterpart British Aerospace
were said to be eager to create a transnational aerospace and defense company. The two companies envisaged including Aérospatiale, the other major European aerospace company, but only after its privatisation. 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. 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. A merger was agreed between British Aerospace Chairman Richard Evans
and DASA CEO Jürgen Schrempp
in December 1998. However when the British General Electric Company
put its defence electronics business Marconi Electronic Systems
(MES) 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 to form BAE Systems
was announced on 19 January 1999 and completed on 30 November. Evans stated that in 2004 that his fear was that an American defence contractor would acquire MES and challenge both British Aerospace and DASA.
agreed to merge with the signature of a memorandum of understanding on 11 June 1999. On 14 October 1999 DASA agreed to merge with Aérospatiale-Matra to create the European Aeronautic Defence and Space Company. 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.
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. 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.
On 16 June 2003 EADS acquired BAE's 25% share in Astrium, the satellite and space system manufacturer, to become the sole owner. EADS paid £84 million, however due to the lossmaking status of the company BAE invested an equal amount for "restructuring". 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.
Despite repeated suggestions as early as 2000 that BAE Systems wished to sell its 20% share of Airbus, the possibility was consistently denied by the company. However on 6 April 2006 BBC News reported that it was indeed to sell its stake, then "conservatively valued" at £2.4 billion. Due to the slow pace of informal negotiations, BAE exercised its put option
which saw investment bank Rothschild
appointed to give an independent valuation. Six days after this process began, Airbus announced delays to the A380
with significant effects on the value of Airbus shares. On 2 June 2006 Rothschild valued BAE's share at £1.87 billion, well below BAE's, analysts' and even EADS' expectations. The BAE board recommended that the company proceed with the sale and on 4 October 2006 shareholders voted in favour; the sale was completed on 13 October making EADS the sole shareholder of Airbus.
In March 2007 EADS Defence and Security Systems division was awarded an eight year, £200m contract to provide the IT infrastructure for the FiReControl
project in the UK.
On 29 February 2008, the United States Air Force
awarded a $35 billion contract for aerial refueling tankers (the KC-45) to Northrop Grumman, with EADS as a major subcontractor. The contract, one of the largest created by the Department of Defense
, is initially valued at $35 billion but has the potential to grow to $100 billion.
Under the contract, Northrop Grumman
and EADS would build a fleet of 179 planes, based on the existing Airbus 330, to provide in-air refueling to military aircraft, from fighter jets to cargo planes. While final assembly of the craft would take place at an Airbus plant near Mobile, Alabama
, parts would come from suppliers across the globe.
However, the award was protested by Boeing
, the other bidder on the project, which was upheld by the GAO
. In response to the new contest, on 8 March 2010, Northrop Grumman
announced it was abandoning its bid for the new contract, with its CEO stating that the revised bid requirement favored Boeing. On 20 April 2010, EADS announced it was re-entering the competition and intended to enter a bid with the KC-45.
EADS reported a 763 million euros loss for 2009 as a result of a 1.8 billion euros charge on the troubled Airbus A400M
project and a 240 million euros charge related to the A380.
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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. 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.
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 25 June 2005. At the same meeting the Board, in consultation with partner BAE Systems, named Gustav Humbert
as President and CEO of Airbus.
(27.38%), Daimler AG (22.41%), SEPI
(5.46%) and Dubai Holding
(3.12%). 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.
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."
On 4 April 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." 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.
On 30 August 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
. Now its share is nearly 6%. In December 2007, Vneshtorgbank
sold EADS shares to another state-controlled bank Vneshekonombank. EADS sharers are to be delivered by Vneshekonombank to the charter capital of JSC "United Aircraft Corporation
" in 2008.
On 3 October 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 http://business.timesonline.co.uk/article/0,,9067-2388196,00.html.
In 2008, EADS had arms sales equivalent of $17.9 billion, which constituted 28% of total revenue.
recommended the exclusion of several companies producing cluster bomb
s or components. EADS and its sister company EADS Finance BV were among them, arguing that EADS manufactures "key components for cluster bombs." The criticism was centered around TDA, a joint venture between EADS and Thales S.A.. TDA produced the mortar ammunition PR Cargo, which can be considered cluster ammunition, however this definition has since been successfully battled by EADS. EADS and its subsidiaries are now regarded as fulfilling all the conditions of the Ottawa Treaty
. According to the new point of view, 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"). 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.
, former chief whip of South Africa's African National Congress
, was convicted of fraud relating to an arms deal with South Africa, in which EADS were major players, 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
. In March 2003, the Regional Court of Transvaal
completely withdrew the charges of bribery against the former head of EADS South Africa. In September 2004, the Munich
prosecutor's office issued a formal order on dismissal regarding the bribery charges against him due to his innocence in relation to the said car sales (file no. 572 Js 39830/01).
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.
The French government's actions are also under investigation; The state-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.
In June 2008, law firm Coughlin Stoia Geller Rudman and Robbins
announced that a class action has been commenced on behalf of an institutional investor in the United States District Court for the Southern District of New York on behalf of U.S. citizens who purchased the publicly traded stock of EADS.
Airbus
Airbus SAS is an aircraft manufacturing subsidiary of EADS, a European aerospace company. Based in Blagnac, France, surburb of Toulouse, and with significant activity across Europe, the company produces around half of the world's jet airliners....
as the leading manufacturer of commercial aircraft, with Airbus Military
Airbus Military
thumb|First [[Airbus A400M]] roll-out in [[Seville]] in June 2008Airbus Military is a business unit of Airbus, which is part of the EADS conglomerate...
covering tanker, transport and mission aircraft; Eurocopter as the world's largest helicopter supplier; Astrium, the European leader in space programmes from Ariane
Ariane
Ariane is a feminine name. It is a French translation of the Greek name Ariadne. It may refer to:-People:* Princess Ariane of the Netherlands * Ariane Ascaride , French actress and screenwriter...
to Galileo; and Cassidian as a provider of comprehensive and integral systems solutions for aerial, land, naval and civilian security applications. Through Cassidian, EADS is a major partner in the Eurofighter consortium as well as a key stakeholder in the missile systems provider MBDA
MBDA
MBDA is a missile developer and manufacturer with operations in France, Britain, Germany, Italy, and the United States. It was formed by a merger of Aérospatiale-Matra Missiles , Finmeccanica and Matra BAe Dynamics in December 2001. In 2003 the company had 10,000 employees...
. In 2009, the EADS generated revenues of €42.82 billion and employed 119,500 personnel. EADS was formed on 10 July 2000 by the merger of Aérospatiale-Matra
Aérospatiale-Matra
Aérospatiale-Matra was a French missile and aircraft manufacturer. It was formed in 1999 by the merger of French companies Aérospatiale and Matra Haute Technologie....
of France, DaimlerChrysler Aerospace AG (DASA) of Germany, and Construcciones Aeronáuticas SA (CASA)
Construcciones Aeronáuticas SA
Construcciones Aeronáuticas SA , was a Spanish aircraft manufacturer. It became EADS CASA the Spanish branch of EADS in 1999, but was absorbed by Airbus Military in 2009...
of Spain. Overall, the company develops and markets civil and military aircraft, as well as communications systems, missiles, space rockets, satellites, and related systems.
History
The 1997 merger of American corporations BoeingBoeing
The Boeing Company is an American multinational aerospace and defense corporation, founded in 1916 by William E. Boeing in Seattle, Washington. Boeing has expanded over the years, merging with McDonnell Douglas in 1997. Boeing Corporate headquarters has been in Chicago, Illinois since 2001...
and McDonnell Douglas
McDonnell Douglas
McDonnell Douglas was a major American aerospace manufacturer and defense contractor, producing a number of famous commercial and military aircraft. It formed from a merger of McDonnell Aircraft and Douglas Aircraft in 1967. McDonnell Douglas was based at Lambert-St. Louis International Airport...
, which followed the forming of Lockheed Martin
Lockheed Martin
Lockheed Martin is an American global aerospace, defense, security, and advanced technology company with worldwide interests. It was formed by the merger of Lockheed Corporation with Martin Marietta in March 1995. It is headquartered in Bethesda, Maryland, in the Washington Metropolitan Area....
, 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
John Weston (businessman)
John Weston is a British businessman.Weston was employed by BAE Systems and its predecessors from when he left university until he was ousted as CEO in 2002. In 2004 the Financial Times described Weston as one of a "core group" who turned British Aerospace around , along with Evans, Richard...
commented "Europe... is supporting three times the number of contractors on less than half the budget of the U.S.". European governments wished to see the merger of their defence manufacturers into a single entity, a European Aerospace and Defence Company.
As early as 1995 the German aerospace and defence company DaimlerChrysler Aerospace (DASA) and its British counterpart British Aerospace
British Aerospace
British Aerospace plc was a UK aircraft, munitions and defence-systems manufacturer. Its head office was in the Warwick House in the Farnborough Aerospace Centre in Farnborough, Hampshire...
were said to be eager to create a transnational aerospace and defense company. The two companies envisaged including Aérospatiale, the other major European aerospace company, but only after its privatisation. The first stage of this integration was seen as the transformation of Airbus
Airbus
Airbus SAS is an aircraft manufacturing subsidiary of EADS, a European aerospace company. Based in Blagnac, France, surburb of Toulouse, and with significant activity across Europe, the company produces around half of the world's jet airliners....
from a consortium of British Aerospace, DASA, Aérospatiale and Construcciones Aeronáuticas SA
Construcciones Aeronáuticas
EADS CASA was a Spanish aircraft manufacturer, previously Construcciones Aeronáuticas SA . It became the Spanish branch of EADS in 1999, and was absorbed by Airbus Military in 2009.-History:...
into an integrated company; in this aim BAe and DASA were united against the various objections of Aérospatiale. As well as Airbus, British Aerospace and DASA were partners in the Panavia Tornado
Panavia Tornado
The Panavia Tornado is a family of twin-engine, variable-sweep wing combat aircraft, which was jointly developed and manufactured by the United Kingdom, West Germany and Italy...
and Eurofighter Typhoon
Eurofighter Typhoon
The Eurofighter Typhoon is a twin-engine, canard-delta wing, multirole combat aircraft, designed and built by a consortium of three companies: EADS, Alenia Aeronautica and BAE Systems; working through a holding company, Eurofighter GmbH, which was formed in 1986...
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
Matra
Mécanique Aviation Traction or Matra was a French company covering a wide range of activities mainly related to automobile, bicycles, aeronautics and weaponry. In 1994, it became a subsidiary of the Lagardère Group and now operates under that name.Matra was owned by the Floirat family...
and emerge with a diluted French government shareholding. A merger was agreed between British Aerospace Chairman Richard Evans
Richard Evans (businessman)
Sir Richard Harry Evans, CBE, Hon FRAeS less formally known as Dick Evans, was formerly chairman of BAE Systems.In 2001 he became Chancellor of the University of Central Lancashire...
and DASA CEO Jürgen Schrempp
Jürgen E. Schrempp
Jürgen Erich Schrempp was until December 31, 2005, the CEO of DaimlerChrysler, a German-American car and truck manufacturer. Following a decision of the board taken on July 28, 2005, he was succeeded on January 1, 2006, by Chrysler frontman Dieter Zetsche...
in December 1998. However when the British General Electric Company
The General Electric Company plc
The General Electric Company or GEC was a major British-based industrial conglomerate, involved in consumer and defence electronics, communications and engineering. The company was once a constituent of the FTSE 100 Index. It was renamed Marconi Corporation plc in 1999 after its defence arm,...
put its defence electronics business Marconi Electronic Systems
Marconi Electronic Systems
Marconi Electronic Systems , or GEC-Marconi as it was until 1998, was the defence arm of The General Electric Company . It was demerged from GEC and acquired by British Aerospace on November 30, 1999 to form BAE Systems...
(MES) 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 to form BAE Systems
BAE Systems
BAE Systems plc is a British multinational defence, security and aerospace company headquartered in London, United Kingdom, that has global interests, particularly in North America through its subsidiary BAE Systems Inc. BAE is among the world's largest military contractors; in 2009 it was the...
was announced on 19 January 1999 and completed on 30 November. Evans stated that in 2004 that his fear was that an American defence contractor would acquire MES and challenge both British Aerospace and DASA.
Formation
DASA and the Spanish aircraft company Construcciones Aeronáuticas SAConstrucciones Aeronáuticas
EADS CASA was a Spanish aircraft manufacturer, previously Construcciones Aeronáuticas SA . It became the Spanish branch of EADS in 1999, and was absorbed by Airbus Military in 2009.-History:...
agreed to merge with the signature of a memorandum of understanding on 11 June 1999. On 14 October 1999 DASA agreed to merge with Aérospatiale-Matra to create the European Aeronautic Defence and Space Company. 10 July 2000 was "Day One" for the new company which became the world's second largest aerospace company after Boeing
Boeing
The Boeing Company is an American multinational aerospace and defense corporation, founded in 1916 by William E. Boeing in Seattle, Washington. Boeing has expanded over the years, merging with McDonnell Douglas in 1997. Boeing Corporate headquarters has been in Chicago, Illinois since 2001...
and the second-largest European arms manufacturer after BAE Systems.
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. 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
Alenia Marconi Systems
Alenia Marconi Systems was a major European integrated defence electronics company and an equal shares joint venture between BAE Systems and Finmeccanica until its dissolution on May 3, 2005....
(BAE/Finmeccanica
Finmeccanica
Finmeccanica S.p.A. is an Italian conglomerate. Finmeccanica is the second largest industrial group and the largest of the hi-tech industrial groups based in Italy. It works in the fields of defence, aerospace, security, automation, transport and energy...
) to form MBDA
MBDA
MBDA is a missile developer and manufacturer with operations in France, Britain, Germany, Italy, and the United States. It was formed by a merger of Aérospatiale-Matra Missiles , Finmeccanica and Matra BAe Dynamics in December 2001. In 2003 the company had 10,000 employees...
. 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.
On 16 June 2003 EADS acquired BAE's 25% share in Astrium, the satellite and space system manufacturer, to become the sole owner. EADS paid £84 million, however due to the lossmaking status of the company BAE invested an equal amount for "restructuring". It was subsequently renamed EADS Astrium
EADS Astrium
Astrium Satellites is one of the three business units of Astrium, a subsidiary of EADS. It is a European space manufacturer involved in the manufacture of spacecraft used for science, Earth observation and telecommunication, as well as the equipment and subsystems used therein and related ground...
. In November 2003, EADS announced that it was considering working with Japanese companies, and the Japanese METI
Ministry of Economy, Trade and Industry (Japan)
The or METI, is a ministry of the Government of Japan. It was created by the 2001 Central Government Reform when the Ministry of International Trade and Industry merged with agencies from other ministries related to economic activities, such as the Economic Planning Agency.METI, which used to be...
, to develop a hypersonic
Hypersonic
In aerodynamics, a hypersonic speed is one that is highly supersonic. Since the 1970s, the term has generally been assumed to refer to speeds of Mach 5 and above...
airliner
Airliner
An airliner is a large fixed-wing aircraft for transporting passengers and cargo. Such aircraft are operated by airlines. Although the definition of an airliner can vary from country to country, an airliner is typically defined as an aircraft intended for carrying multiple passengers in commercial...
intended to be a larger, faster, and quieter, replacement for the Concorde
Concorde
Aérospatiale-BAC Concorde was a turbojet-powered supersonic passenger airliner, a supersonic transport . It was a product of an Anglo-French government treaty, combining the manufacturing efforts of Aérospatiale and the British Aircraft Corporation...
, which was retired in October the same year.
Despite repeated suggestions as early as 2000 that BAE Systems wished to sell its 20% share of Airbus, the possibility was consistently denied by the company. However on 6 April 2006 BBC News reported that it was indeed to sell its stake, then "conservatively valued" at £2.4 billion. Due to the slow pace of informal negotiations, BAE exercised its put option
Put option
A put or put option is a contract between two parties to exchange an asset, the underlying, at a specified price, the strike, by a predetermined date, the expiry or maturity...
which saw investment bank Rothschild
N M Rothschild & Sons
N M Rothschild & Sons is a private investment banking company, belonging to the Rothschild family...
appointed to give an independent valuation. Six days after this process began, Airbus announced delays to the A380
Airbus A380
The Airbus A380 is a double-deck, wide-body, four-engine jet airliner manufactured by the European corporation Airbus, a subsidiary of EADS. It is the largest passenger airliner in the world. Due to its size, many airports had to modify and improve facilities to accommodate it...
with significant effects on the value of Airbus shares. On 2 June 2006 Rothschild valued BAE's share at £1.87 billion, well below BAE's, analysts' and even EADS' expectations. The BAE board recommended that the company proceed with the sale and on 4 October 2006 shareholders voted in favour; the sale was completed on 13 October making EADS the sole shareholder of Airbus.
In March 2007 EADS Defence and Security Systems division was awarded an eight year, £200m contract to provide the IT infrastructure for the FiReControl
FiReControl
FiReControl was a project, initiated in the UK in March 2004, to reduce the number of control rooms used to handle emergency calls for fire services and authorities. Presently there are 46 control rooms in England that handle calls from the local public for emergency assistance via the 999 system...
project in the UK.
Recent activities
United States Air Force
The United States Air Force is the aerial warfare service branch of the United States Armed Forces and one of the American uniformed services. Initially part of the United States Army, the USAF was formed as a separate branch of the military on September 18, 1947 under the National Security Act of...
awarded a $35 billion contract for aerial refueling tankers (the KC-45) to Northrop Grumman, with EADS as a major subcontractor. The contract, one of the largest created by the Department of Defense
United States Department of Defense
The United States Department of Defense is the U.S...
, is initially valued at $35 billion but has the potential to grow to $100 billion.
Under the contract, Northrop Grumman
Northrop Grumman
Northrop Grumman Corporation is an American global aerospace and defense technology company formed by the 1994 purchase of Grumman by Northrop. The company was the fourth-largest defense contractor in the world as of 2010, and the largest builder of naval vessels. Northrop Grumman employs over...
and EADS would build a fleet of 179 planes, based on the existing Airbus 330, to provide in-air refueling to military aircraft, from fighter jets to cargo planes. While final assembly of the craft would take place at an Airbus plant near Mobile, Alabama
Mobile, Alabama
Mobile is the third most populous city in the Southern US state of Alabama and is the county seat of Mobile County. It is located on the Mobile River and the central Gulf Coast of the United States. The population within the city limits was 195,111 during the 2010 census. It is the largest...
, parts would come from suppliers across the globe.
However, the award was protested by Boeing
Boeing
The Boeing Company is an American multinational aerospace and defense corporation, founded in 1916 by William E. Boeing in Seattle, Washington. Boeing has expanded over the years, merging with McDonnell Douglas in 1997. Boeing Corporate headquarters has been in Chicago, Illinois since 2001...
, the other bidder on the project, which was upheld by the GAO
Gao
Gao is a town in eastern Mali on the River Niger lying ESE of Timbuktu. Situated on the left bank of the river at the junction with the Tilemsi valley, it is the capital of the Gao Region and had a population of 86,663 in 2009....
. In response to the new contest, on 8 March 2010, Northrop Grumman
Northrop Grumman
Northrop Grumman Corporation is an American global aerospace and defense technology company formed by the 1994 purchase of Grumman by Northrop. The company was the fourth-largest defense contractor in the world as of 2010, and the largest builder of naval vessels. Northrop Grumman employs over...
announced it was abandoning its bid for the new contract, with its CEO stating that the revised bid requirement favored Boeing. On 20 April 2010, EADS announced it was re-entering the competition and intended to enter a bid with the KC-45.
EADS reported a 763 million euros loss for 2009 as a result of a 1.8 billion euros charge on the troubled Airbus A400M
Airbus A400M
The Airbus A400M, also known as the Atlas, is a multi-national four-engine turboprop military transport aircraft. It was designed by Airbus Military as a tactical airlifter with strategic capabilities. The aircraft's maiden flight, originally planned for 2008, took place on 11 December 2009 in...
project and a 240 million euros charge related to the A380.
Organization
- AirbusAirbusAirbus SAS is an aircraft manufacturing subsidiary of EADS, a European aerospace company. Based in Blagnac, France, surburb of Toulouse, and with significant activity across Europe, the company produces around half of the world's jet airliners....
- EADS SogermaEADS SogermaEADS Sogerma is a part of the division Airbus of EADS. It is engaged in the manufacture and development of aerostructures, cabin interior layout, airline seats....
- Airbus MilitaryAirbus Militarythumb|First [[Airbus A400M]] roll-out in [[Seville]] in June 2008Airbus Military is a business unit of Airbus, which is part of the EADS conglomerate...
- EADS Sogerma
- EurocopterEurocopter GroupThe Eurocopter Group is a global helicopter manufacturing and support company. It is the largest in the industry in terms of revenues and turbine helicopter deliveries. Its head office is located on the property of Marseille-Provence International Airport in Marignane, France, near Marseille...
- Astrium
- Astrium Satellites
- Astrium Space Transportation
- Astrium Services.
- Cassidian
- Cassidian Electronics - develops and manufactures sensors, radars, avionics and electronic warfare systems for military and security applications
- Cassidian Air Systems - develops manned and unmanned aerial systems (UAVs), mission avionics, electronic defence and warning systems
- Cassidian Systems - provides global security solutions such as command & control, lead system integration, TETRATerrestrial Trunked RadioTerrestrial Trunked Radio is a professional mobile radio and two-way transceiver specification...
and TETRAPOLTETRAPOLTETRAPOL is a digital professional mobile radio standard, as defined by the Tetrapol Publicly Available Specification , in use by professional user groups, such as public safety, military, industry and transportation organizations throughout the world....
communication systems for public safety, industry, transportation and defence. This line of business was the first one in the world to begin field tests with TETRA Enhanced Data Service (TEDS). - Eurofighter GmbHEurofighter GmbHEurofighter Jagdflugzeug GmbH is a multinational company that co-ordinates the design, production and upgrade of the Eurofighter Typhoon, this includes incorporating the jet engines designed and manufactured by EuroJet Turbo GmbH.Founded in 1986, it has its head office in Hallbergmoos, Bavaria,...
(46%) manufacturer of Eurofighter TyphoonEurofighter TyphoonThe Eurofighter Typhoon is a twin-engine, canard-delta wing, multirole combat aircraft, designed and built by a consortium of three companies: EADS, Alenia Aeronautica and BAE Systems; working through a holding company, Eurofighter GmbH, which was formed in 1986...
. - EADS 3 SigmaEADS 3 SigmaEADS 3 Sigma is the name since 2002 of the Greek 3 Sigma aerospace company. It was founded in 1987 with headquarters in Athens and production facilities in Chania, Crete...
a Hellenic company focused in the design, development, production and services provision of airborne and surface target drone systems. - MBDAMBDAMBDA is a missile developer and manufacturer with operations in France, Britain, Germany, Italy, and the United States. It was formed by a merger of Aérospatiale-Matra Missiles , Finmeccanica and Matra BAe Dynamics in December 2001. In 2003 the company had 10,000 employees...
(37.5%) develops and manufactures missiles
Other units
- EADS North America the U.S. holding company for the North American activities of EADS.
- American EurocopterAmerican EurocopterAmerican Eurocopter is a subsidiary of EADS North America, the United States subsidiary of EADS. American Eurocopter manufactures and markets a broad range of civil helicopters, and as of 2005 had almost a 50% share of the American market...
- Cassidian Communications (formerly PlantCML) is a provider of crisis communication, notification, and P25 land mobile radio systems.
- American Eurocopter
- ATR (50%) regional aircraft manufacturer
- EADS SocataEADS SocataSOCATA is a producer of general aviation aircraft propelled by piston engines and turboprops, including business planes, small personal or training aircraft, as well as the production of aircraft structures for other manufacturers such as Airbus, Dassault, Embraer, Eurocopter and Lockheed Martin...
- EADS CASAConstrucciones AeronáuticasEADS CASA was a Spanish aircraft manufacturer, previously Construcciones Aeronáuticas SA . It became the Spanish branch of EADS in 1999, and was absorbed by Airbus Military in 2009.-History:...
- EADS EFWEADS EFWEADS EFW is a subsidiary and business unit of EADS in Dresden. It is located at the Dresden Airport and became the centre of freighter aircraft conversion in the EADS group.- History :...
- EADS Innovation WorksEADS Innovation WorksEADS Innovation Works is a wholly owned division of EADS Company a global aerospace and defense company, headquartered in the Netherlands, whose business depends heavily on the development and integration of state-of-the-art technologies into its products.EADS-IW operates the EADS corporate...
(R&D) - ArianespaceArianespaceArianespace SA is a French company founded in 1980 as the world's first commercial space transportation company. It undertakes the production, operation, and marketing of the Ariane 5 rocket launcher as part of the Ariane programme....
(30%) - Dornier ConsultingDornier ConsultingDornier Consulting is an international consulting and project management company that operates in the fields of: traffic, transport, the environment and water....
- Dassault AviationDassault AviationDassault Aviation is a French aircraft manufacturer of military, regional and business jets, a subsidiary of Dassault Group.It was founded in 1930 by Marcel Bloch as Société des Avions Marcel Bloch or "MB". After World War II, Marcel Bloch changed his name to Marcel Dassault, and the name of the...
(45.76%) manufacturer fighters like the Dassault RafaleDassault RafaleThe Dassault Rafale is a French twin-engine delta-wing multi-role jet fighter aircraft designed and built by Dassault Aviation. Introduced in 2000, the Rafale is being produced both for land-based use with the French Air Force and for carrier-based operations with the French Navy...
or the Dassault Mirage 2000. - PatriaPatria (company)Patria is a Finnish company which produces a wide range of defence, aviation and aerospace technology. It carries on the firearms tradition of Valtion Kivääritehdas and the aerospace tradition of Valtion lentokonetehdas.-Patria Aviation:* NH90* Mini-UAVs...
(26.8%) - Premium AEROTECPremium AEROTECPremium AEROTEC is an aerospace manufacturing business, headquartered in Augsburg in Germany. It is a subsidiary of EADS.-History:Premium AEROTEC started as a division of EADS; it was spun off as a wholly owned subsidiary in September 2008....
Corporate governance
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 Division) and Stefan Zoller (Cassidian).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. 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
Rüdiger Grube
Rüdiger Grube was the Chairman of EADS between April 2007 and April 2009. He holds an engineers’ degree in aircraft construction and engineering and a doctorate from the University of Hamburg....
and Arnaud Lagardère
Arnaud Lagardère
Arnaud Lagardère, born in Boulogne-Billancourt, France, on March 18, 1961, is the son of Jean-Luc Lagardère, the former chairman of Matra and Hachette...
. The other board members are Louis Gallois, Thomas Enders, Hans Peter Ring, Juan Manuel Eguiagaray, Michel Pébereau, Bodo Uebber, François David and Michael Rogowski.
In late 2004 Noël Forgeard
Noël Forgeard
Noël Forgeard is a French industrialist and former joint CEO of EADS.-Appointment:From April 1998 until June 2005 Forgeard was CEO of the aircraft manufacturer Airbus SAS.In late 2004 he was nominated as the next French CEO of EADS...
(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
Paris Air Show
The Paris Air Show is the world's oldest and largest air show. Established in 1909, it is currently held every odd year at Le Bourget Airport in north Paris, France...
, the appointment was confirmed by the EADS Board of Directors on 25 June 2005. At the same meeting the Board, in consultation with partner BAE Systems, named Gustav Humbert
Gustav Humbert
Dr. Gustav Humbert is the former Chief Executive Officer and President of Airbus SAS, and a former member of the EADS Executive Committee.- Airbus :...
as President and CEO of Airbus.
Financial information
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". The latter is owned by SOGEADESOGEADE
SOGEADE is a French holding company.It was created solely to hold French interests in newly-founded EADS.French government holds a veto right since foundation...
(27.38%), Daimler AG (22.41%), SEPI
SEPI
Sociedad Estatal de Participaciones Industriales is a large state-owned Spanish industrial holding company. It is the successor of Instituto Nacional de Industria. The company controls all stocks owned by the Spanish State...
(5.46%) and Dubai Holding
Dubai Holding
Dubai Holding is a holding company that belongs to the Government of Dubai . It manages and controls 20 companies, which operate in real estate, hospitality, finance, healthcare, energy, research, education, entertainment, media, internet, tourism and biotechnology...
(3.12%). SOGEADE is owned by the French State and Lagardère
Lagardère Group
Lagardère is a French-based multinational conglomerate headquartered in the 16th arrondissement of Paris. The group once covered a broad range of industries but is now largely focused on the media sector, in which it is one of the world’s leading companies...
, while SEPI is a Spanish state holding company. France also owns 0.06% of publicly traded stock.
In October 2005 the British Ministry of Defence
Ministry of Defence (United Kingdom)
The Ministry of Defence is the United Kingdom government department responsible for implementation of government defence policy and is the headquarters of the British Armed Forces....
warned European politicians to stop, as it sees it, interfering in the corporate governance of EADS. The UK Defence Procurement Minister Lord Drayson
Paul Drayson, Baron Drayson
Paul Rudd Drayson, Baron Drayson PC is a British businessman, amateur racing driver and politician. He was Minister of Science in the Department for Business, Innovation and Skills until May 2010, where he replaced Ian Pearson. In June 2009 he was additionally appointed as Minister of State for...
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."
On 4 April 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." Lagardère will reduce its holding by an identical amount. However, Caisse des Dépôts et Consignations
Caisse des dépôts et consignations
The Caisse des Dépôts et Consignations is a French financial organization created in 1816, and part of the government institutions under the control of the Parliament. Augustin De Romanet is the board chairman and chief executive...
, 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.
On 30 August 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
Vneshtorgbank
Bank VTB , former Vneshtorgbank, is one of the leading universal banks of Russia and the largest in terms of authorized capital....
. Now its share is nearly 6%. In December 2007, Vneshtorgbank
Vneshtorgbank
Bank VTB , former Vneshtorgbank, is one of the leading universal banks of Russia and the largest in terms of authorized capital....
sold EADS shares to another state-controlled bank Vneshekonombank. EADS sharers are to be delivered by Vneshekonombank to the charter capital of JSC "United Aircraft Corporation
United Aircraft Corporation
United Aircraft Corporation may refer to one of the following:* United Aircraft Corporation, formerly United Aircraft and Transport Corporation; now known as United Technologies Corporation....
" in 2008.
On 3 October 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 http://business.timesonline.co.uk/article/0,,9067-2388196,00.html.
In 2008, EADS had arms sales equivalent of $17.9 billion, which constituted 28% of total revenue.
Cluster bomb allegation
In 2005 the Norwegian Government Pension FundThe Government Pension Fund of Norway
The Government Pension Fund of Norway comprises two entirely separate sovereign wealth funds owned by the Government of Norway:* The Government Pension Fund - Global...
recommended the exclusion of several companies producing cluster bomb
Cluster bomb
A cluster munition is a form of air-dropped or ground-launched explosive weapon that releases or ejects smaller sub-munitions. Commonly, this is a cluster bomb that ejects explosive bomblets that are designed to kill enemy personnel and destroy vehicles...
s or components. EADS and its sister company EADS Finance BV were among them, arguing that EADS manufactures "key components for cluster bombs." The criticism was centered around TDA, a joint venture between EADS and Thales S.A.. TDA produced the mortar ammunition PR Cargo, which can be considered cluster ammunition, however this definition has since been successfully battled by EADS. EADS and its subsidiaries are now regarded as fulfilling all the conditions of the Ottawa Treaty
Ottawa Treaty
The Ottawa Treaty or the Anti-Personnel Mine Ban Convention, officially known as the Convention on the Prohibition of the Use, Stockpiling, Production and Transfer of Anti-Personnel Mines and on their Destruction, aims at eliminating anti-personnel landmines around the world. , there were 158...
. According to the new point of view, 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"). 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.
Bribery
In 2003 Tony YengeniTony Yengeni
Tony Sithembiso Yengeni is a South African politician. He was an anti-Apartheid activist and joined the African National Congress in 1976 and later its armed wing, Umkhonto we Sizwe. He has served as member of the South African parliament for the ruling ANC...
, former chief whip of South Africa's African National Congress
African National Congress
The African National Congress is South Africa's governing Africanist political party, supported by its tripartite alliance with the Congress of South African Trade Unions and the South African Communist Party , since the establishment of non-racial democracy in April 1994. It defines itself as a...
, was convicted of fraud relating to an arms deal with South Africa, in which EADS were major players, 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
Siphiwe Nyanda
General Siphiwe Nyanda SSA SBS CSL DMG MMS MMM is a South African politician, former minister of communications from 2009 - 2010.He was a South African military commander...
. In March 2003, the Regional Court of Transvaal
Transvaal Province
Transvaal Province was a province of the Union of South Africa from 1910 to 1961, and of its successor, the Republic of South Africa, from 1961 until the end of apartheid in 1994 when a new constitution subdivided it.-History:...
completely withdrew the charges of bribery against the former head of EADS South Africa. In September 2004, the Munich
Munich
Munich The city's motto is "" . Before 2006, it was "Weltstadt mit Herz" . Its native name, , is derived from the Old High German Munichen, meaning "by the monks' place". The city's name derives from the monks of the Benedictine order who founded the city; hence the monk depicted on the city's coat...
prosecutor's office issued a formal order on dismissal regarding the bribery charges against him due to his innocence in relation to the said car sales (file no. 572 Js 39830/01).
Insider trading investigation
On 2 June 2006 co-CEO Noël Forgeard and Airbus CEO Gustav HumbertGustav Humbert
Dr. Gustav Humbert is the former Chief Executive Officer and President of Airbus SAS, and a former member of the EADS Executive Committee.- Airbus :...
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.
The French government's actions are also under investigation; The state-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.
In June 2008, law firm Coughlin Stoia Geller Rudman and Robbins
Coughlin Stoia Geller Rudman and Robbins
Robbins, Geller Rudman & Dowd LLP is a law firm in San Diego, California. The firm was formed in May 2004 when Milberg Weiss Bershad Hynes & Lerach split with the New York office, becoming Milberg Weiss Bershad & Schulman....
announced that a class action has been commenced on behalf of an institutional investor in the United States District Court for the Southern District of New York on behalf of U.S. citizens who purchased the publicly traded stock of EADS.