With Daimler planning to unload shares in European aerospace giant EADS, the government in Berlin is in a strategic pinch: How can it preserve its interests in the Franco-German company in the longer term? Officials at EADS are reportedly suggesting the introduction of a golden share that would give Germany and France vetos on important decision-making.
When it comes to European aerospace giant EADS, the balance of the company between its European partners is always a delicate one. Tail planes for Airbus jets are manufactured in Spain, wings are developed and produced in Britain and aircraft are assembled in Toulouse, France, and Hamburg, Germany. The situation is similar with the company's complicated shareholding -- the partners vie to preserve their state interests. But between no partners is this balance of power as touchy as it is between Germany and France, the two largest stakeholders.
So when Daimler announced a few weeks ago that it intended to shed half its remaining shares in the company, the news sent a collective shudder through the German government. Daimler began unloading EADS shares in 2006, dropping from a 30 percent holding at the time to 15 percent today. Almost five years later, Berlin still hasn't managed to come up with the long-term strategy for retaining influence in the company, which is often described as a European champion, an emblem of the advantages of pan-European cooperation.
Now, German Chancellor Angela Merkel's cabinet is reviewing scenarios under which it could convince automobile manufacturer Daimler to maintain its EADS shares. Although the German government has no direct ownership in Airbus, it does have considerable influence over Daimler when it comes to control of EADS.
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In addition to Daimler's 15 percent, a consortium of German private and government-owned banks also hold 7.5 percent of EADS shares, but Daimler has control of their voting rights. The consortium purchased the shares four years ago in order to give the government in Berlin time to find a permanent solution to the control issue, but they have only pledged to maintain that holding through 2012.
Chancellor Angela Merkel plans to discuss the new shareholder structure at EADS with Economics Minister Brüderle and Finance Minister Wolfgang Schäuble on Wednesday in order to seek a solution for maintaining the balance between Franco-German interests.
In France, the government preserves its influence in EADS through its own direct holding in the giant as well as through cooperation with media company Lagadere. Now both Daimler and Lagadere have expressed their intent to unload shares and a new solution must be found for this delicate balance of interests between Paris and Berlin in two countries that, while representing the economic motor of Europe, are often pitted against each other in direct political and industrial competition.
