When EADS management announced the closing of the Sogerma site in Mérignac, last May 12th, it provoked a major polemic and attracted the ire of its employees, social partners and the government.

Qualifying the announcement as brutal, the press recalled the company's background and its establishment in the region, and also mentioned the financial difficulties that the company had been going through for several years.

Within this complex context, the press interviewed Sogerma's leaders and social partners, who denounced the lack of a government industrial policy and criticized the fact that certain contracts had been confided to a less expensive company in Portugal.

The press also emphasized the concern of both the employees and the unions about the restructuring plan recommended by the EADS management. No doubt there would have been less indignation had the EADS group not announced such good semi-annual results at the same time.

The media wrote up and commented on statements by Mr de Villepin and Mr Borloo and Mrs. Alliot-Marie. The first two talked about the government's willingness to try to save jobs at Sogerma, and how they were trying to get EADS' management back to the discussion table, in order to find an acceptable solution for all the employees before the end of June.

The Minister of Defense, Mrs Alliot-Marie, pointed out that Sogerma had not found a viable business model that would have enabled the company to adapt to changes imposed by the world economy, thereby staying competitive. Moreover, she indicated to the press that the recent orders placed by the French army, as requested by EADS' co-president, Mr Noël Forgeard, at the end of discussions with the government, would not be sufficient to save Sogerma.

Quite apart from the emotional upheaval that the closing of the local company brought about, the press questioned the real reasons behind Mr de Villepin's intervention. They saw it as a way of his getting back into the social sphere after the CPE crisis, and a means of sprucing up his image after the upset over the Clearstream affair. The press also wondered how the government could act so surprised and so indignant at the Sogerma announcement, since, as an EADS shareholder holding 15% of the capital, they had ratified the decision to close the site down.

This social crisis has uncontestably tarnished EADS' media reputation, and it is now seen as a company with little respect for the employees of Sogerma. The management of the group has been criticized for brutally announcing the site closing in Mérignac and for a restructuring plan considered to be unsatisfactory.

Sogerma's fate has yet to be decided.

Sylvie Testard-Ramirez, Managing Director, Echo Research France
Analysis and commentary by Echo Research: www.echoResearch.comon the basis of 387 articles which appeared in the daily national press online between May 1st - 29th 2006.

1 June 2006