Financial Management : EADS

Résumé du document

The European Aeronautic Defense and Space Company or the EADS was created by the combined will of several states to be competitive in the space and aeronautics sector. Yet, at the beginning of the 1990s, many concentrations were developed on the American market like Northrop and Grumman which merged in 1993, Raytheon and BAE Business Jets in 1994 and Lockheed and Martin Marietta in 1996. This will expressed by the German, French and Spanish states resulted in a merger of three companies: the French aerospace company Matra SA, the Spanish Casa and the German Daimler Chrysler aerospace. The challenge was difficult because it was about "mixing" different economies and cultures. Moreover, the management was designed to be bicephalous, which means that the two Chief Executives Officers were of different nationalities, and had two different ways of management. For several years, EADS has been facing many challenges, like the delay of delivery of the A380, the competition with Boeing, illegal insider trading, the financial crisis and so on. The following report gives an overview of the EADS Company, its managing system, and finally we analyze its finance and provide some recommendations.

Extraits

[...] To make the EADS supplier base actively contribute to overall corporate targets, enhancing shareholder and customer value. To leverage full EADS purchasing power by aggregation of demand, managing and developing common supplier. To support purchasing efficiency and transparency by implementing state-of-the-art common tools, methods, processes and sharing best practices. Each EADS Division has its own sourcing function. Most of EADS' sourcing volume is provided by large companies. Sourcing activities focus on the EADS home countries France, Germany, U.K. and Spain, and on the U.S. Sourcing outside the E.U. and North America is still limited. [...]

[...] Corporate governance The merger of EADS was an alliance between three companies of different cultures and nationalities. The first thing to negotiate was the allocation of power between these different partners. Therefore they have decided of parity between French and German corporate executives. The company was led by a dual-headed management structure, with two chairmen, and two CEOs to provide the necessary balance and stability required. In 2007, they decided to implement a new and simplified management and leadership structure. [...]

[...] Even if the states would always want to keep an eye on this industry, it seems that the two states have already been agreed to reduce their shareholding by keeping a “golden share”, which a right of veto. Have a better integration in each EADS' division to avoid delivery problem. The management should be carried by one transnational and neutral person, so that the interest of all the countries could be taken into account. It is necessary to respect the plan Power8 and all its savings mentioned in it. V. [...]

[...] Control authority EADS has two control entity, the board of Directors and the executive committee, to look after the good functioning of the company. The Board of Directors is responsible for the management of the company. It consists of a maximum of eleven members appointed for five years and removed by the shareholders' meeting. Group strategy, budget, objectives, organization structure, alliances and investments are mentioned during this meeting. The executive committee is responsible for managing the day-to-day operations of the Company. [...]

[...] EADS presentation Creation of EADS and its activities Context EADS (European Aeronautic Defense and Space Company) was created on July through a sponsorship of three chiefs of government: José Maria Aznar from Spain, Lionel Jospin from France and Gerhard Schröder from Germany. This merger offered a major political interest. It was a question of endowing Europe with a giant in aeronautics to compete with foreign groups, especially Americans ones. The group EADS was formed by the merger of three companies: Aérospatiale Matra SA (France), Casa (Spain), and DaimlerChrysler Aerospace (Germany). Each of these companies was a leader on its home market. Further to this merger, the aeronautic European market counted four players: EADS, Thales, Finmeccanica and BAE Systems. [...]