November 24, 2020

Heir Apparent at EADS Stirs Controversy With Web Video

Some media commentators are calling the video of the 50-year-old heir and chief executive of the Lagardère empire an embarrassment.

The nearly three-minute video — more Fashion TV than the financial news — has received more than half a million hits since it was posted on the YouTube video-sharing site Wednesday. It was shot as Mr. Lagardère and Jade Foret, a 20-year-old fashion model, posed recently for photos to accompany a cover story in the weekend magazine of Le Soir, a Belgian newspaper. The video shows Mr. Lagardère and Ms. Foret kissing and embracing as they discuss how they met and fell in love this year.

While the video is unlikely to ruffle many feathers within Mr. Lagardère’s publishing business, which includes magazine titles like Elle and Paris Match, it has been viewed with consternation in the more buttoned-down world of aerospace and arms making. And it has placed the Frenchman in the spotlight at a sensitive time for the board and crucial shareholders of EADS, formally European Aeronautic Defense and Space, and its Airbus subsidiary, who have come under pressure from management to create a new governance structure.

Louis Gallois, the EADS chief executive, said in June that he and other top group managers were pressing for a new arrangement that would allow any investor to buy or sell shares freely in the company, while still preserving the delicate balance of influence between France and Germany in its governance.

A shareholder pact that dates from the group’s creation in 2000 stipulates that the French and German stakes in EADS must be equal.

Currently, Mr. Lagardère’s company owns a 7.5 percent stake in EADS while the French government holds 15 percent. Daimler, the German automaker, owns 15 percent and an alliance of German private and public sector banks holds 7.5 percent.

But both Daimler and Mr. Lagardère have made clear in recent years that they do not view their EADS holdings as core to their operations, and the French and German governments have struggled to broker a sale of the shares to other investors in a way that would preserve the ownership balance.

A management revamping brokered in 2007 by Nicolas Sarkozy, the French president, and his German counterpart, Angela Merkel, placed Mr. Gallois, a Frenchman, at the helm of EADS and Thomas Enders, a German, in charge of Airbus, the group’s largest business unit, for five years. The chairmanship of the group was awarded to a German under the proviso that Mr. Lagardère — also a close friend of Mr. Sarkozy — would take over that post in mid-2012.

But in recent years, Mr. Lagardère, who holds a seat on the EADS board, has appeared increasingly uninterested in his company’s aerospace assets. They are a legacy of his father, Jean-Luc, the former chief of Matra, a military contractor that was merged into Airbus.

Many in the French and German news media have reacted to the video with scorn. The German business daily Handelsblatt and the French newspaper Le Monde described it as embarrassing and disturbing, while Libération, another French daily, likened the video to a soap opera. Challenges, a French newsweekly, found it “stupefying.”

Mr. Gallois told The Wall Street Journal as recently as last month that he expected the board would appoint Mr. Lagardère chairman next year. Alexander Reinhardt, an EADS spokesman, would not be drawn into answering what implications, if any, could follow from the video controversy.

Ramzi Khiroun, a spokesman for Mr. Lagardère, did not return calls requesting comment.

Article source: http://www.nytimes.com/2011/07/23/business/global/heir-apparent-at-eads-appears-in-internet-video.html?partner=rss&emc=rss

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