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      06-25-2006, 08:01 AM   #6

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Airbus chief Noël Forgeard’s job is on the line but the embattled French prime minister is unlikely to help.

Airbus In A Tailspin
Members of French Government, Board Members of Diamler-Chrysler Implicated in Questionable Airbus Stock Sales.

By Richard Northedge/the Telegraph/UK (Filed: 06/25/2006)

One of the chief executives of the Franco-German defence group, Noel Forgeard, has landed himself in hot water by selling £4m worth of shares just weeks before its share price collapsed.

And Noël Forgeard should not rely on being thrown a lifeline by Dominique de Villepin, the French prime minister; the politician has no wish to be pulled down with the Airbus chief.Forgeard, the chief executive of the French Airbus group until last year, when he took the same position with its parent, Eads, is under fire for selling £4m of Eads shares in March, just weeks before the company revealed that technical problems on building the new Airbus A380 would severely delay deliveries.

The news caused Eads's share price to collapse by 26 per cent, reducing the company's value by more than £4bn.

Last week, as French insider dealing investigators arrived at Airbus's Toulouse plant, Forgeard, 58, was called to an uncomfortable meeting in Munich with his co-chief executive, Tom Enders, and Eads's two chairmen, Arnaud Lagardère and Manfred Bischoff. But while Forgeard is being blamed for France's latest scandal, his two chairmen may yet be his saviours.

Forgeard was not alone in selling Eads shares before the price collapsed: DaimlerChrysler, represented on the Eads board by Bischoff, and media group Lagardère, whose chief executive is Arnaud Lagardère, did the same thing.Together, the two companies disposed of 15 per cent of Airbus's parent company, realising £1.3bn each.

There is no suggestion that either company had inside information on Airbus's troubles before selling - on the contrary, their lack of knowledge of the subsidiary's problems is the embarrassment - but the two chairmen find themselves tarred with the brush that has blackened their beleaguered chief executive.

Indeed, the links between the participants are as tangled as the wiring that is delaying the A380 superjumbo. Forgeard was Lagardère's managing director for six years before joining Airbus; his successor at Airbus, Gustav Humbert, previously worked at Daimler Benz Aerospace; and fellow director Rüdiger Grube sits on the DaimlerChrysler management board.

Eads's marketing director came from Lagardère and the head of defence previously worked at DaimlerChrysler - and both those directors exercised options and sold the shares at the same time as Forgeard.

Enders did not sell, however, and has undermined his co-chief by criticising the timing of his sale.
Last week Thierry Breton, the French finance minister, met the two chairmen to discuss the situation, concerned at the fall in value of the Paris administration's 15 per cent stake in Eads. But it was Breton's boss, de Villepin, who had to answer to the National Assembly.

Forgeard is a former adviser to President Chirac, who backed his promotion to head the Franco-German Eads last year.