EADS, the European defence and space giant, has finally adopted a conventional corporate structure, but it took a summit between the leaders of France and Germany yesterday to get an agreement.

After seven years of negotiations, EADS is scrapping its dual chairman and chief executive hierarchy, which had been blamed for causing confusion and inefficiency in the organisation.

The compromise was achieved before a meeting between President Sarkozy, of France, and Angela Merkel, the German Chancellor, yesterday at the headquarters of Airbus, the EADS subsidiary, in Toulouse.

Under the deal, Louis Gallois, the co-chief executive and head of Airbus, will become the sole head of EADS. Tom Enders, the former German paratrooper who was the other co-chief executive, effectively takes a demotion to become head of Airbus.

Arnaud Lagardère, the head of the French media empire that bears his name, will step down as co-chairman but will remain a non-executive director. Rüdiger Grube, who was appointed to the EADS board by DaimlerChrysler, its largest shareholder, will be the sole chairman.

The convoluted co-chairman and co-chief executive structure was set up to maintain a power balance between French and German influence in the company, which has more than 116,000 employees across Europe.

The Germans and other partner countries, including Britain, had been pushing to simplify the structure to allow EADS to operate more like a regular company. France had blocked such moves, fearing that a dilution of its influence could lead to job cuts or a loss of Airbus work.

The restructuring deal became possible only when the French secured Mr Gallois, who is politically well connected, as chief executive.

However, aerospace analysts said that although the deal appears to favour the French, it places long-term power in German hands. It will be a German that takes over Airbus, which accounts for 80 per cent of EADS’s revenues of €40 billion (£27 billion) a year, as the aircraft manufacturer cuts jobs and closes factories.

Restructuring Airbus is EADS’s top priority and Mr Enders may face less political interference, particularly in France, as he tries to turn around the ailing manufacturer.

In addition, Mr Gallois is 63 and has made no secret that working for EADS will be his last job. Analysts expect that Mr Enders has been given some assurance that he will become sole chief executive when Mr Gallois retires or is elevated to chairman, possibly in a couple of years’ time.

A source close to Airbus said: “The Germans aren’t doing this for the benefit of the French or for Louis Gallois. As usual, it is a pragmatic response to the problems of EADS and Airbus. Their man is being sent in to fix the Airbus situation – and when that’s done he will become chief executive of the whole company.”

Airbus is implementing the Power 8 restructuring programme, which aims to save €2 billion a year by cutting more than 10,000 jobs. About 1,500 jobs will go in the UK and Airbus is seeking buyers for its factory at Filton, near Bristol.

As part of the management changes announced yesterday, the French and Germans will remove the two nonexecutive directors that they each appoint. This will allow EADs to appoint new board directors, including a British executive to fulfil a promise made to the UK last year.

Russia, which owns 5 per cent of EADS through the VTB bank, is expected to push for board representation, as is Spain and investors from the United Arab Emirates, who bought a 3 per cent stake last month.

Step up, step down

Louis Gallois, Chief executive, EADS

Becomes sole head of one of Europe’s largest companies after an early career spent in the French bureaucracy. From 1972 he worked in the French Ministry of Economy and Finance, then for the Ministry of Research and Industry and also in the Ministry of Defence. In 1989 he became chairman and chief executive of Snecma, the aircraft engine manufacturer that is now part of Safran. Three years later he was appointed chairman and chief executive of Aerospatiale, the French aerospace and defence group, and merged the company’s helicopter business with Dasa’s unit to form Eurocopter, which is now part of EADS. Aerospatiale itself merged with Dasa, of Germany, and Casa, of Spain, in 2000 to create EADS. In 1996 Mr Gallois was appointed chairman of SNCF, the French railway operator, before replacing Christian Streiff in October 2006

Tom Enders, Chief executive, Airbus

The former German paratrooper continues to hurl himself out of aircraft. The former army major has made more than 1,000 jumps, prompting jokes that he was being “parachuted in” to save the troubled Airbus division. He joined MBB (Messerschmitt-Boelkow-Blohm), a division of Dasa, in 1991 after his army career, which finished in the planning staff of the German Defence Ministery. He became company secretary of Dasa in 1995 and led its corporate strategy team from 1996. With the merger of Dasa, Casa and Aerospatiale in 2000, he became head of the defence and security division. In 2005 he became co-chief executive of EADS, but yesterday took what is effectively a demotion to run the Airbus division

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