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War Profiteer EADS

Jürgen Grässlin

With hardly any arms-producing company are claim and reality further apart than with EADS. While - in the directive "integrity and transparency" - the Board of Directors declared ethical responsibility to underlie their actions, even dictators and sham democrats are equipped. A serious example of a purely profit-oriented business policy include arms transfers to Libya where in the war between the dictatorial regime of Gaddafi and the Western-dominated "alliance of the willing" EADS weapons are used on both sides. War is good for business - at EADS.

The European Aeronautic Defence and Space Company NV (EADS), based in Leiden, Netherlands, was founded on 10 July, 2000 and since then has become the leading aviation and aerospace group and the second largest arms company in Europe. The German Daimler AG, the largest single shareholder, and a consortium of the French State Holding SOGEADE, the French arms producer Lagardère and the French state, each holds 22.46% of the shares. Another large shareholder, with 5.47%, is the Spanish State Holding SEPI.

EADS comprises the divisions Airbus, Astrium, Eurocopter and Cassidian. "Everything that flies," is how the range could be succinctly identified. The spectrum of weapons ranges from combat and transport aircraft, to military helicopters, to nuclear weapons delivery systems and space rockets. The military products are complemented by drones, which are regarded today as a key technology in warfare.

In the second half of the last decade, EADS increased their arms transfers from 12.6 (2006) to 13.1 billion US dollars (2007), and in the following year to the exorbitantly high record of 17.9 billion US dollars. So the self-set target of sales growth, "particularly in the defence business", was more than met.

Like a phoenix from the ashes

In 2009, EADS had to take a break. The arms sales of the company, as calculated by the Stockholm International Peace Research Institute (SIPRI) fell from 17.9 billion US dollars (2008) to 15.9 billion US dollars (2009).

The balance was negatively impacted by the disaster of the new A400M military transport aircraft from Airbus Military. The A400M is supposed to meet the newly defined needs of European NATO forces in global crises and war missions with enhanced loading capacity, range and speed. Because of the explosion in costs by several billion euros, South Africa had to withdraw from the purchase of the originally planned eight A400M. Germany has reduced its order from 73 to 53 of the A400M transporters.

Nevertheless, in early 2011 euphoria is again spreading at EADS - precisely thanks to the well-thriving arms business. The Airbus division improved its EBIT (which is the profit before interest and tax) from a loss of €1.371 billion (2009) to a profit of 305 million euros (2010). While the civil activities by Airbus Commercial had to record a decline by 95 million euros, the arms deals by Airbus Military contributed crucially to the improvement of the financial situation: although the military division in 2009 had recorded a loss of at least 1.754 billion euros, the results in 2010 were at 21 million euros back in positive territory.

Claiming to act ethically, reducing export control risks

The EADS management wants to "ensure compliance with ethical business practices in all areas". This positive target is underscored by the code of conduct -- “integrity and transparency”. Accordingly, EADS is committed "to ethical behaviour and transparency". But when exporting, "compliance was reorganised to reduce export control risks". The Export Compliance Council, which is responsible for monitoring all export-related activities, started operation in 2009. In addition, EADS “took part in several initiatives to develop global standards”.

This sounds good, but with no other arms manufacturing company can claim and reality be further apart than with EADS. While the shareholders and the critical public at the Annual General Meetings in Amsterdam are silenced with ethics policies, EADS supplies - in addition to belligerent states, such as the USA, Great Britain, France or Germany - dictators and sham democrats around the world with weapons and military equipment.

The war against Gaddafi is good for business

Thanks to its rich oil reserves, Libya is in a position to pay for arms imports promptly. No wonder then that the dictatorial regime of Muammar al Gaddafi is one of the customers of European arms companies. EADS has maintained a representative office in the Libyan capital Tripoli. Since lifting the arms embargo in 2004, military jeeps, helicopters and anti-tank missiles of the type MILAN 3 were delivered.

Moral inhibitions at the EADS leadership? Ethical principles for arms transfers to dictators? Apparently non-existent. For decades, Libya has been one of the countries where human and civil rights are massively violated. The Libyan regime also enforced the death penalty in 2009. The regime of Gaddafi transferred 168 million euros for the MILAN missiles to EADS.

When British and their air forces attacked air bases and Libyan army positions I March 2011, EADS weapons were in use, too: Typhoon and Tornado combat aircraft. As is well known, war is good for business ...

From arms trade to ethically adjustable production?

For the past two decades, the Critical Shareholders of Daimler (KAD) have been at Daimler’s Annual General Meetings with actions, counter-proposals and speeches in favour of phasing out Daimler's arms production. Moral considerations play -- if any -- a marginal role at the general meetings of the EADS NV and Daimler AG. What counts is only the profit.

A sale of Daimler's stake in EADS to another arms manufacturer wouldn’t constitute a significant contribution to solving the actual problem. Who ever wants to get out of domed military production and the inhuman military exports must strive for defence conversion - the shift to a sustainable production of responsible civil products - and set aside weapons production. What might sound revolutionary could be realised at EADS in an exemplary manner, given the excellent order book in the civil sector and provided there was the appropriate will by the EADS management.

EADS's military projects, especially the Typhoon, expire in the coming years. The need is for forward-looking change. The highly qualified engineers of the aviation and aerospace giant could certainly benefit from their own know-how, as the following example demonstrates emphatically: in December 2010, EADS announced, the EADS division Astrium would be turned into a leading manufacturer of blades for wind turbines.

EADS thus enters into competition with the Danish leader LM Glasfiber. Its production centre in Germany speaks for itself: at the site of the former EADS/Airbus plant in Lemwerder blades for wind turbines are now manufactured. Meaningful developments couldn’t be symbolised any better.

Jürgen Grässlin is Federal spokesman for the German Peace Society - United War Resisters (DFG-VK) and Speaker of the Critical Shareholders of Daimler (KAD).