Cutting the umbilical chord

Implications: EADS will remain operating at sub-optimal levels as long as the politics continues to play a role in its structure. Every minute spent worrying about its ownership means a minute wasted from the central issue - running its business.

Analysis: The FT has a good story on this today. The key issue is this: "...the role of the core French and German shareholders. Between them, they control 45 per cent of EADS. The French government is influential but not decisive, with a 15 per cent stake, while Lagardère, the French media group, owns 7.5 per cent. Daimler controls 22.5 per cent. Suggestions that these investors should be able to veto who else could build up a strategic stake would be a significant step backwards."

I agree with the FT that once it is a public company, the "core" shareholders really should not have any issues with anyone building up a stake. A public company is not, as the FT states, a private club. If public funding of your risk is OK, then public ownership should be too.

After all, there is nothing to stop Dubai (or even Russia, Inc.?) buying a "strategic stake" in Boeing. Sure everyone would sit up and pay attention. But then, so what? 

It seems clear that there is a group within the higher echelons of EADS that despite talk of a simplified ownership structure that is apolitical, deeply desires the political umbilical chord to stay intact. This muddled thinking will almost certainly get in the way of rational management decisions. EADS needs to decide whether it is a public company, or not.