May 8, 2007


Sarkozy faces an economic test in ailing Airbus (Mark Landler, May 8, 2007, International Herald Tribune)

For those trying to predict how France's newly elected president, Nicolas Sarkozy, will lead his country's economy, one of the first critical tests is likely to come here, at the home base of Airbus, the proud but ailing European plane maker.

Beset by costly delays in its flagship A380 plane and trailing its archrival Boeing, Airbus has embarked on a wrenching overhaul that could result in thousands of lost jobs and the sale of several factories.

The retrenchment at Airbus is also forcing its French and German shareholders to rethink the politically delicate, increasingly combustible, ownership arrangements that govern the plane maker's parent, the European Aeronautic Defense and Space Company, or EADS.

How Sarkozy navigates these thorny issues may help clarify whether he is, at heart, a free-market reformer or an economic nationalist determined to prop up France's industrial patrimony.

Given his track record and the imperatives of French politics, several experts said, he is likely to be a bit of both. Sarkozy, they predicted, will give Airbus leeway to proceed with cost-cutting, while at the same time moving to strengthen France's influence over the enterprise.

That could raise hackles in Germany, which has long chafed at France's proprietary attitude toward Airbus.

Margaret Thatcher broke the miners, RWR the air traffic controllers--Mr. Sarkozy is French.

Posted by Orrin Judd at May 8, 2007 10:39 PM
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