German government warns EADS over French bias-paper

05 March 2012 defenceWeb (Reuters)

The German government has told aerospace group EADS to locate more of its activities in Germany or put Berlin's plans to buy part of Daimler's stake in the firm at risk, German business paper Handelsblatt reported.

The Germany's air and space travel co-ordinator Peter Hintze said in a letter to Airbus Chief Executive Thomas Enders that the Airbus parent should also ensure equal numbers of French and German nationals occupy positions in the top five leadership levels.

"The German government is deeply concerned by the concentration and centralisation of research and development competencies in the headquarters in Toulouse, which have to a large degree led to the current imbalance," the letter said, according to Handelsblatt, Reuters reports.

Germany is in talks to buy a 7.5 percent stake in EADS from Daimler to help maintain a Franco-German balance of influence over the aerospace company.

Hintze also noted that the government had provided 500 million euros for the development of the long-distance Airbus A350XWB plane, but was irritated that German airbus sites had not been developed as agreed.

This trend was "unacceptable and requires an urgent u-turn," Hintze said.

Hintze was not immediately available to comment.

EADS spokesman Alexander Reinhardt confirmed the company had received the letter, but declined to comment on its content.

EADS has been trying to resolve an internal power struggle between its French and German sides and limit government meddling.

EADS was formed in 2000 from French, German and Spanish assets as a counterweight to U.S. aerospace and defence giants.

It is controlled by a partnership of German carmaker Daimler, French media firm Lagardere and the French state. Maintaining a fragile balance of power has been a sensitive topic ever since.

EADS was plagued in its early years both by tensions between French and German interests and by in-fighting within the French camp, which weighed on the EADS share price.