Sarkozy says France is ready to inject cash into EADS

France's new president, Nicolas Sarkozy, said his government is prepared to inject new cash into EADS, the parent of struggling European plane-maker Airbus, if new shares are issued.

Photo: Sarkozy says France is ready to inject cash into EADS

"The French state will do its duty if there needs to be a capital increase," said Sarkozy on a visit Friday to Airbus headquarters here. But he ruled out either a partial or total nationalization of EADS.

Sarkozy said his aim is to help Airbus fund the development of its A380 and A350 planes.

He said EADS' problems were more due to its shareholders than its management. He said he will return to Toulouse soon with German Chancellor Angela Merkel.

He also guaranteed that an Airbus plant in Meaulte in northern France would not be closed as part of the plane-maker's restructuring plan. In addition, he said he wants to outlaw so-called golden parachute payoffs for departing executives. He said a proposed law would be tabled perhaps as soon as July.

"I do not accept the idea that people who failed have the assurance of leaving with a fat cheque," Sarkozy said.

There was a public outcry in France at news that Noel Forgeard, the former co-chief executive of European Aeronautic Defence & Space Co., stands to pocket Ђ8.5 million (US$11.5 million) after he was sacked in mid-2006, even though EADS' financial situation has deteriorated.

Airbus is a priority on Sarkozy's long "fix-it" list. Sarkozy, who arrived ahead of schedule in Toulouse, was having lunch with workers, meeting with union representatives and viewing the plant during his two-hour visit.

Airbus was a leading issue in the campaign that led to Sarkozy's May 6 election. On his first day in office on Wednesday, when he traveled to Berlin to meet with Merkel, he said it was urgent that Germany and France address Airbus' problems.

Sarkozy sandwiched the trip to Toulouse, in southwest France, between the morning announcement of France's new government and the first Cabinet meeting of his new administration, in the late afternoon.

Under a restructuring plan announced by Airbus in February, 10,000 jobs will be shed across Europe - mostly in France and Germany, where the bulk of the company's operations are based.

The restructuring plan, known as Power-8, is meant to make up for losses caused by the weak dollar and a EURO 5 billion (US$6.7 billion) profit shortfall due to the two-year delay in rolling out Airbus' much-touted A380 superjumbo.

Sarkozy has said he does not feel bound by current proposals to cure Airbus ills.

The head of MEDEF, a union representing France's bosses, suggested Friday that the duel French-German leadership setup running Airbus' parent company EADS is not the best tool for governing.

"It is obvious that, when running a team, it is best to have a chief, a leader who is clearly designated and recognized by all," Laurence Parisot said on France-2 television.