European aerospace group EADS took aim at Berlin and Brussels over jobs and trade on Thursday, showing a renewed confidence after overcoming past cost problems to post better-than-expected results.
Chief executive Louis Gallois defended plans by his successor, Airbus chief Tom Enders, to focus more of the group's activities near Airbus headquarters in Toulouse, southern France, despite misgivings in the German government.
Gallois, unveiling his last results before retiring in June, confirmed that a German official in charge of aerospace policy, Peter Hintze, had written to Enders calling for more activities of the company, set up in 2000 by French, German and minority Spanish interests, to be based in Germany.
The call appeared to rekindle national rivalries which destabilised the group and often roiled its stock in the past, but the chief executive was keen to dispel fears of a new period of instability despite offering few details.
"This letter is certainly not appropriate and certainly not in accordance with governance of a listed company," Gallois said as EADS doubled its dividend and reported higher 2011 profits.
"Together with Tom Enders and the executive committee we are working without flags on the table. Nobody inside the company wants to change that. We will continue that way without external inference," Gallois said.
The spat between EADS and Germany is the most serious since relations were strained by cost overruns and delays on the A400M airlifter, Europe's largest military project, in 2009.
EADS also urged Berlin to speed up decisions on military procurement which have left a gap in the portfolio of its defence division.
EADS was originally set up in 2000 on strict power-sharing lines between French and German interests, with Spain as a junior partner, and for years was beset by in-fighting.
Analysts say Gallois has overcome many of the internal disputes and focused attention on stabilising the A400M and the A380 superjumbo, which triggered a crisis over delays in 2006.
Gallois did, however, confirm that Airbus would have to pay EUR€105 million (USD$138 million) to repair cracks in parts of the wings inside dozens of A380s.
EADS predicted a big jump in operating profit to EUR€2.5 billion in 2012 as it posted better-than-expected 2011 earnings on the back of brisk demand for Airbus passenger jets and progress in bringing costs under control on its A380 superjumbo.
Figures unveiled on Thursday showed Airbus appears to have put a lid on recurring costs on the A380 - seen as a vital step if Airbus is to match the fatter margins of its main rival.
Investors pushed shares in EADS up 10 percent.
CHINA TRADE WARNING
In a rare move, the company publicly took on the European Commission over emissions rules, while exposing growing fears that China could carry out a threat to retaliate by cancelling plane orders, dragging the airline industry into a trade war.
Airbus set out plans to increase production of its A330 to record levels for a wide-body jet, but made clear this was at risk if the European Union remained isolated in an international row over plans to charge airlines for emissions.
It said it would increase production of the popular A330 to 11 a month in the second quarter of 2014, provided opposition from China and others did not derail aircraft orders.
China has threatened retaliation over plans to charge airlines through the European Union's emissions trading scheme.
Gallois said the planned production rate depended on demand from Chinese airlines, pointing out that any Chinese aircraft orders must be ratified by the Beijing government.
Hong Kong Airlines was reported this week to be ready to scrap a USD$4 billion order for 10 A380s over the row.
EADS posted a 38 percent increase in 2011 operating profit to EUR€1.696 billion on revenue that rose 7 percent to EUR€49.13 billion. Net income rose 87 percent to EUR€1.03 billion.
The results, which contrasted starkly with weak earnings from Europe's largest airline by revenue, Air France-KLM, reflected higher deliveries and improved pricing at Airbus, which like rival Boeing enjoys strong demand from emerging markets.
Airbus said it would devote maximum energy to securing its next big project, the A350 carbon-composite passenger jet, which it described as "very challenging". It said the A350's schedule was tightening but it did not include new provisions.
The aircraft's biggest customer, Qatar Airways, said on Wednesday it did not want to see further delays beyond a six-month slippage in the earliest deliveries already announced.
