UPDATE 1-Reuters Forum-DaimlerChrysler CEO irked by A380 delays


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By Tim Hepher and Benoit Van Overstraeten

PARIS, Sept 27 (Reuters) - The head of European aerospace group EADS's top industrial shareholder, car firm DaimlerChrysler, expressed frustration on Wednesday over the latest problems with the troubled A380 superjumbo and called for regular updates on the Airbus parent firm's strategy.

"The development that you saw was definitely not what we expected to happen," DaimlerChrysler CEO Dieter Zetsche said at a Reuters automotive forum, referring to the third set of delays to strike the $12 billion Airbus project, disclosed last week.

Zetsche also endorsed warnings by EADS over the need to keep the company under tight Franco-German control after the recent snap purchase by Russia of a 5 percent stake, but said early experiences of Russian cooperation were encouraging.

Europe's biggest aerospace firm, EADS is clawing its way out of a three-month crisis caused by A380 delays, a costly redesign of another Airbus project, the A350, a Boeing sales spree and management rows. All contributed to a share collapse in June.

Airbus dismayed airlines customers and its suppliers again last week by acknowledging that problems in wiring the mammoth A380 had created a backlog for the third time in a year.

"The aerospace industry has had tremendous consolidation and EADS was a major driver in this regard, and nobody believed EADS could become as successful a company as it was," Zetsche said.

"Some people thought Boeing would be dead five years ago with this competition; the reality has proven very different. Some people now think EADS is in tremendous long-lasting trouble; the future might prove that not to be right either.

"But it is definitely a very competitive industry and the time between decisions being made and their impact on the success of the company is even longer than in the car industry. Therefore of course it is in our interests to be kept updated on what the strategic direction is ... And certainly we were happier two years ago than we are today."


EADS was formed in 2000 from a merger of French, German and Spanish aerospace and defence interests.

Zetsche reiterated that DaimlerChrysler, which is reducing its 30 percent EADS stake to 22.5 percent, was potentially interested in reducing this still further. But for now the car firm had committed to owning at least 15 percent.

DaimlerChrysler's shareholding is matched by an equal French interest, split between the French government on 15 percent and industrial shareholder Lagardere , which is also in the process of offloading 7.5 percent, in step with the Germans.

Asked about weekend comments by Russian President Vladimir Putin, suggesting a deal on production in exchange for assurances on Moscow's rights as a new shareholder, Zetsche said the parties could only act within EADS's corporate governance rules. These split key powers between the French and Germans.

"Any further influence going beyond shareholder rights could only be political influences, and those should be addressed politically, and that is what I think was talked about between Chirac and Merkel and Putin a few days ago," Zetsche said.

France, Germany and Russia discussed EADS at a summit on Saturday. Putin told a news conference afterwards that EADS had nothing to fear from the share purchase, which he described as a purely commercial operation with no aggressive motives.

But the two co-chairmen of EADS issued a frosty warning earlier this month that the Franco-German power-sharing pact inside Europe's biggest aerospace firm could not be altered.

"I don't have the feeling that the German or French governments would disagree with the positions that the chairmen of EADS took too," said Zetsche, who was speaking at a Reuters event coinciding with the Paris car show.

The unexpected share-buying over the summer by Russian state bank VTB came as Moscow has sparked concern in Europe by flexing its financial muscles, most recently in a standoff with western oil firms in the eastern Sakhalin region.

European aerospace officials and some politicians have expressed concern that any increase in Russian influence on EADS could torpedo the group's long-standing drive to gain a foothold in the U.S. defence market.



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