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Last Updated: Monday, 26 June 2006, 21:26 GMT 22:26 UK
Chirac admits to 'Airbus problem'
President Jacques Chirac
President Jacques Chirac said action was needed
French President Jacques Chirac has acknowledged "management problems" at Airbus's parent company but stopped short of criticising senior executives.

Mr Chirac said changes would take place at EADS, after the firm revealed costly delays to its flagship A380 plane.

However, Mr Chirac said he would not "prejudge" the position of embattled chief executive Noel Forgeard.

He sold EADS shares just weeks before the delay to the A380 came to light but has denied any wrongdoing.

Technical delays

However, regulators are investigating dealing in EADS shares while Mr Forgeard has shouldered much of the blame for the way news of the A380's problems was communicated to investors.

Airbus revealed earlier this month that technical delays to the A380 meant it would deliver far fewer planes next year than planned.

The problems could cost it up to 2bn euros in lost earnings by 2010.

The French government, which owns 15% of EADS, is under pressure to force immediate management changes at the Franco-German group.

It is probable that we have to do something and something will be done
President Jacques Chirac

Its management structure - two chief executives and two chairmen from France and Germany - is considered inefficient.

"There is a problem which EADS has encountered with its two chairmen and two chief executives," Mr Chirac said in a television interview.

"It is probable that we have to do something and something will be done," he added.

Investor lawsuit

During weekend meetings with shareholders, French Finance Minister Thierry Breton said the firm's management crisis needed to be resolved quickly to restore confidence in its operations.

He set a Tuesday deadline for proposals to remedy its problems.

It also emerged on Monday that a shareholder group has started legal action seeking $10bn (5.5bn) in damages from EADS.

The Association of Active Shareholders said it had begun a "French-style class action" against EADS over delays to its A380 deliveries.




SEE ALSO
Woes continue at embattled EADS
20 Jun 06 |  Business
Airbus faces further A380 hitch
13 Jun 06 |  Business
Airbus confirms super-jumbo delay
01 Jun 05 |  Business

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