This document discusses cultural differences between France and Germany that have led to conflicts at Airbus and its parent company EADS. When EADS was formed through a merger, measures were implemented to manage cultural issues, such as having dual executive presidents from each country and conducting business in English. However, clashes have still occurred due to differing concepts of collaboration, leadership styles, and educational systems between the two countries. An interview with EADS CEO Louis Gallois acknowledges the challenges of dual control but argues the future must be more European and hopes national conflicts do not intensify.

1. FRANCO-GERMAN CONFLICT AT
AIRBUS

3. EADS 1
M&A Failure Rate is around 50%
Cultural differences are an additional obstacle to sucess in
crossborder M&As
EADS implemented numerous measures to manage cultural
differences
◆ Organization & Structure
◆ Leadership & Teamwork
◆ Training & Careers

4. EADS 2
Symmetry was the guiding principle
 2 Executive Presidents
 2 divisions run by the French
 2 divisions run by the Germans
 2 sites for the HQ : Paris and Munich
 Respect for balance of nationalities and skills
 Expatriation bonuses
 English the working language
 EADS culture : team spirit
 Creation of multicultural work teams

5. EADS 3
A340 : sharing of tasks
◆ Aérospatiale : strategy, creativity
 Cockpit
 Wingbox
◆ DASA : cost containment, profit
 Fuselage
 Cabin interior

6. EADS 4
Multicultural teamwork involves the coexistence of different
concepts of communication and collaboration
◆ Cooperation
◆ Control
◆ Reward
 First, people discover and learn…
 Then, informal national groups emerge
 Finally, deadlocks in collaboration appear

7. EADS 5
Clash of 2 interpretations of the notion of collaboration
◆ Germany : logic of cooperation
 Teamwork to reach a common goal
 The French guy is seen as an individualist
 The idea of the unpredictability of the French is reinforced
◆ France : logic of competition
 Individual contributions to accomplish a common task
 The French guy feels deprived of his freedom of action
 He is put off by the need to work out a consensus

8. EADS 6
Origin of the clash : educational systems
◆ Germany
 Working in a group involves strong consensus
 Each member contributes equally to the result
 Motivation comes from within the group
◆ France
 The system emphasizes competition
 Consensus is not a necessary condition for action
 Motivation comes from outside the group

9. EADS 7
Clash of 2 leadership styles
◆ France
 Centralized power
 Autocratic management style
 Power is paternalistic, emotive, personal
 The boss must be consulted regularly
 He manifests his authority and power
◆ Germany
 Decentralized power
 Democratic management style
 Power based on function and competence
 The boss delegates a lot

10. EADS 8
Interview with Louis Gallois
• Are we nearing the end of dual control at EADS ?
Dual control created a French faction and a German faction. It slowed down
decisionmaking. But without these concessions EADS would never have
come into existence in 1999. Now we have to gradually move towards a
more normal type of governance. I don ’t have a miracle solution. The only
thing I am certain of is that the future of Airbus and EADS can only be
European.
• Is Power 8 an industrial or a political plan ?
Airbus has a constraint : to respect the balance among four countries, the
founders, France and Germany, joined by the UK and Spain. I think I have
respected that balance without compromising the efficiency of the plan. I
hope national conflicts will not get worse, on the contrary. They are a poison
for Airbus.
March 2007