Why Are These Two Heads Smiling?(Philippe Camus and Ranier Hertrich, CEOs of EADS)(Brief Article)(Company Profile)(Statistical Data Included)

Jet fighters screech overhead as Ranier Hertrich ponders the strangeness of his situation in a dimly lit room at Le Bourget air show in Paris. He is co-CEO of the European Aeronautic Defence and Space Company (EADS), the new all-European aerospace conglomerate, which makes him a partner in one of history's more interesting corporate marriages. Hertrich is German; his counterpart, Philippe Camus, is French. And they have been thrown together as co-CEOs in part because it would be too sensitive for a Frenchman or a German to preside alone over the first European armsmaker. "Can you imagine that Philippe Camus, for example, should sell the Eurofighter to the Germans?" Hertrich asks. "Or I would sell arms to [French Defense Minister] Alain Richard? Difficult to imagine. Maybe someday, but not now."

This big business is a uniquely political creature. Founded a year ago, EADS brings together both civilian and military airline manufacturers of Germany, France, Britain, Spain and Italy in one conglomerate with 100,000 employees. Its co-CEO arrangement has more in common with Eurocracies like the European Central Bank, where Germans and French agree to share top jobs, than with the solo boss of most multinationals. And its purpose is explicitly political: to free Europe from reliance on American weapons of war. Yet Camus and Hertrich also have a mandate to behave like classic CEOs--turn a profit, even push through painful layoffs and plant closings. At Le Bourget last month Airbus, the passenger-jet arm of EADS, announced a whopping $14 billion in new sales, putting it well ahead of rival Boeing for the year. So what is this two-headed monster: another bureaucracy in the new Europe, or a "real company"? "There are still two philosophies, still a clash of cultures that nobody can deny," says Klaus Becher, a senior fellow at the International Institute for Strategic Studies in London. "It's crucial for them to project an image of moving forward in a business sense."

They're working on it. Camus insists he has taken no political flak on an EADS campaign to shed 3,000 jobs and close two design facilities in France. He acknowledges, however, that the European aerospace industry would benefit from further consolidation in the jet-fighter market, which pits the new EADS Typhoon against the Rafale made by one of its own partners, Dassault of France. EADS owns a majority share in Dassault, yet lobbyists from both companies recently went ...