Hertrich, Rainer 1949–
Co-CEO, European Aeronautic Defense and Space Company (EADS)
Born: December 6, 1949, in Ottengrün, Germany.
Education: University of Nuremberg, Bachelor of Commerce, 1977.
Family: Married; children: two.
Career: Siemens, 1969–1971, apprentice; 1977, Messerschmitt-Bölkow-Blohm, information processing supervisor, military aircraft division; 1979–1983, head, service division controlling department; 1983–1984, CFO, service division; 1984–1987, head, controlling and finance department; 1987–1990, CFO, marine and special products division; Deutsche Aerospace, 1990–1991, vice president, corporate controlling; DaimlerChrysler Aerospace, 1991–1996, senior vice president, corporate controlling; 1996–2000, head, aeroengines business unit; Motorenund Turbinen-Union München, 1996–2000, president and CEO; DASA, 1996–2000, executive committee member; DaimlerChrysler Aerospace AG, 2000, president and CEO; European Aeronautic Defense and Space Company (EADS), 2000– Co-CEO, chairman of executive committee, and member of board of management.
Awards: Officer of the Légion d'Honneur, French government.
■ Rainer Hertrich was the first German co-CEO of the European Aeronautic Defense and Space Company (EADS), Europe's largest aerospace firm as of 2004. A conglomerate formed by the 1999 merger of Germany's DaimlerChrysler Aerospace (DASA), France's Aérospatiale Matra, and Spain's Construcciones Aeronauticas SA, the company had two CEOs who represented the joint ownership of Germany and France.
The unique cross-cultural management structure of EADS had been dismissed initially as unworkable, but Hertrich and
his French counterpart, Philippe Camus, proved that a genuinely international organization was profitable as well as feasible. Hertrich had developed a solid reputation for improving the balance sheet of each division he had led. He maintained that record with EADS, which became the global leader in civilian aircraft manufacturing along with Airbus. Hertrich's next goal was to surpass Boeing, the leading aircraft manufacturer worldwide, by 2014.
"I prefer to view the future as something that is not yet set in stone," was Hertrich's life motto as told to a reporter for manager-magazin (January 12, 2003). More than a year later he revised it to say, "The future is in our hands" (Financial Times Deutschland, April 28, 2004). As a man who demonstrated the leadership qualities he admired—integrity combined with vision—his career path also reflected the duality of soaring into space while paying close attention to details on the ground. Although Hertrich had not yet obtained his own pilot's license as of early 2004, his involvement in aerospace companies had expanded from managing a local Bavarian heli copter firm to breaking new ground in reorganizing the global aerospace industry.
EDUCATION AND EARLY CAREER
Rainer Hertrich was born in 1949 in Ottengrün, a provincial town in Bavaria. His father was a schoolteacher who encouraged Hertrich to gain some hands-on training in a field before deciding on his life path. Hertrich began his professional career with an apprenticeship as an industrial clerk at Siemens from 1969 to 1971. His experience there encouraged him to study business administration, which he pursued at the Technical University of Berlin. He later transferred to the University of Nuremberg, from which he graduated with a degree in commerce in 1977.
After completing his university studies, Hertrich became a controlling supervisor in the information processing unit of Messerschmitt-Bölkow-Blohm (MBB), a German helicopter manufacturer. He was promoted in 1979 to head of the controlling department of MBB's service division. Four years later he became the division's chief financial officer. Hertrich moved again in 1984, this time to MBB's dynamics division as head of the controlling and finance department. An internal transfer to the marine and special products division in 1987 made him CFO and a member of the division management team. He was credited with greatly improving the division's financial balance sheet (Interavia Business & Technology, December 1999).
After MBB merged with Deutsche Aerospace AG (DASA), Hertrich became DASA's vice president for corporate controlling, which allowed him to play a major role in creating the company's corporate structure. DASA was founded in 1989, bundling space and aeronautic elements of Daimler-Benz, MBB, MTU München, and Telefunken Systemtechnik. To buffer the financial repercussions of a strong American dollar, Hertrich initiated and led DASA's Dolores cost-reduction and productivity program. This program set the stage for DASA's later integration into EADS. The Dolores [DOllar LOw RES-cue] project earned Hertrich a reputation as a "rock-hard financer" (Financial Times Deutschland, April 28, 2004). "Without Dolores, DASA would not have achieved the profitability that would have enabled the 50-50 merger to EADS with a French company," Hertrich said (Financial Times Deutschland, April 28, 2004). To reflect corporate changes, DASA was renamed Daimler-Benz Aerospace AG in 1995 and subsequently DaimlerChrysler Aerospace AG, but its acronym remained the same.
A CROSS-CULTURAL BUSINESSMAN
Hertrich founded the first pan-European aerospace firm in 1991—Eurocopter, a merger of the commercial helicopter divisions of the French Aérospatiale company and the German DASA. Eurocopter subsequently became Europe's largest producer of helicopters.
Hertrich also became the president and CEO of Motorenund Turbinen-Union (MTU) München in 1991, which was an aircraft engine company located in Munich. Hertrich completely restructured the Bavarian company and turned it around financially. Hertrich considered this job the "most appealing and wonderful job" he had ever held, due to the direct contact with daily operations and autonomy that it allowed him (Financial Times Deutschland, April 28, 2004). Over time, however, he found himself more restricted as his decisions came to have greater impact.
While continuing to serve at MTU, Hertrich became the head of the aeroengines business unit of DaimlerChrysler Aerospace AG (DASA) in 1996. He also became a member of DASA's board of management. Four years later he was appointed president and CEO of DASA.
The European Aeronautic Defense and Space Company (EADS), an international aerospace consortium, was formed in 1999 from three companies: the German DaimlerChrysler Aerospace (DASA), the French Aérospatiale Matra, and the Spanish Construcciones Aeronauticas SA (CASA). Hertrich became one of two chief executives of the conglomerate, the other being Philippe Camus of France. EADS was Europe's largest aerospace firm at the time of its formation; it ranked second in the world to Boeing as of 2004. The company held 80 percent of Airbus, with BAE Systems owning the other 20 percent. EADS's other operations included helicopters through Eurocopter; jet fighter airplanes through a 40 percent stake in Eurofighter; satellites through Astrium; missiles through a 40 percent stake in MBDA; and commercial satellite launchers through Arianespace.
The shared chief executive position was designed to reflect France and Germany's joint ownership of EADS. This multinational structure was implemented at all levels of the company—each French employee reported to a German supervisor and vice versa. To ensure military trust by the host governments on the one hand and impartiality on the other, the company had headquarters in Paris as well as Munich, with legal registration in Amsterdam. EADS's role in Spain as well as France made Hertrich wish that he had paid more attention in school. He admitted that he would have liked to retake his Spanish and French language classes (manager-magazin, January 12, 2003).
Hertrich's experience with the formation of Eurocopter provided a precedent for EADS's worldwide impact. "EADS comprises on the prime level the major part of the aerospace industry of three countries: France, Germany and Spain," Hertrich said in a speech to the Aerospace Industries Association of America (AIA) Board of Governors in May 2001. "Following the merger with Marconi, BAE Systems has further consolidated the defense industry in the U.K., while also acquiring a strong foothold in the U.S." (May 24, 2001). To achieve EADS's goal of eventually surpassing Boeing, Hertrich focused on building strong economic and political relationships with firms in Russia, Japan, China, South Korea, India, and the United States (manager-magazin, May 6, 2004).
In addition to serving as EADS's co-CEO, Hertrich also headed the company's aeronautics division, which operated a number of civil and military aviation-related businesses that included the manufacture of helicopters (Eurocopter), regional aircraft (ATR), and general aviation aircraft (Socata) as well as aircraft maintenance and conversion, repair and overhaul, and aerostructures (Sogerma/EADS EFW). In terms of Hertrich's management style, one reporter commented, "[Hertrich] is approachable and has a good sense of humor, qualities that will serve him well" (Interavia Business & Technology, December 1999).
SERVING THE PUBLIC
Hertrich was elected president of BDLI, the German aerospace industries association, at the end of 2001. During his many speeches and public appearances, he never failed to request donations for his favorite organization, Aviation Sans Frontières (Aviation Without Borders). When asked what he would do with EUR 5 million, he said he would invest some of it in EADS stock but also set aside a portion to support this nongovernment organization that provided emergency medical transport, delivered medicines, and assisted other nonprofit humanitarian groups (Financial Times Deutschland, April 28, 2004).
Hertrich counted the founding of EADS and its initial public offering in July 2000 as his major successes. Additional financial rewards were expected in 2008 through the assignment of a lucrative British defense contract.
In January 2004 EADS's 40-percent partner AirTanker was set to become the industrial partner of the £13 billion UK Ministry of Defence air-to-air refueling program, covering a 27-year service period. It was the largest private financing initiative for military defense in history. EADS was to provide Airbus 330-200 multi-role tanker transport (MRTT) services for the Future Strategic Tanker Aircraft (FSTA) program in order to meet the Royal Air Force's requirement for next-generation tanker aircraft. "We will start deliveries in 2008, until 2011," said Hertrich in an EADS press release. "And later on, we will continue to reap a positive impact from the contract, through the services and dividends from AirTanker" (January 26, 2004).
The private financing initiative offered a risk-sharing plan for all entities involved in the contract. Hertrich compared the contract to a car lease: "The financing is done by banks. We … deliver an aircraft to the tanker consortium, and the tanker consortium just provides tank capacity to the U.K. Government. This means that the aircraft, the maintenance and the pilots are all included. It's the sort of contract you would use in automotive leasing. So, it's a new way for governments to obtain better risk-sharing from industry, and reduce the financial impact on their budgets (CEO-Direct transcript, n.d.)."
In his leisure time, Hertrich liked to attend opera performances and go on mountain hiking trips. He also enjoyed skiing and good food. And while his pilot's license remained on the back burner, he could at least soar through the sky with his hang-gliding certificate.
See also entries on G.I.E. Airbus Indrustrie, DaimlerChrysler AG, Daimler-Benz Aerospace AG, European Aeronautic Defence and Space Company EADS N.V., Messerschmitt-Bölkow-Blohm GmbH., and Siemens AG in International Directory of Company Histories.
sources for further information
CEO-Direct transcript, "Co-CEO Rainer Hertrich Comments on FSTA Impact," n.d., http://www.eurobusinessmedia.net/transcript.php?id_article=29.
"EADS Welcomes the Selection of AirTanker for Final Negotiations for the Royal Air Force's Future Strategic Tanker Aircraft Programme," EADS press release, January 26, 2004, http://www.eads.net/frame/lang/en/1024/xml/content/OF00000000400004/3/07/557073.html.
Hegmann, Gerhard, "Rainer Hertrich: Der Riesenflieger bei EADS," Financial Times Deutschland, April 28, 2004.
Hertrich, Rainer, "Rainer Hertrich: Einund Aussichten," manager-magazin, January 12, 2003, p. 106.
——, speech to the Aerospace Industries Association of America (AIA) Board of Governors Conference, May 24, 2001, http://www.aecma.org/Whatsnew/Hertrich_at_AIA.htm.
"In zehn Jahren so groß wie Boeing," manager-magazin, May 6, 2004, http://www.manager-magazin.de/unternehmen/artikel/0,2828,298554,00.html.
Szandar, Alexander, "Dateline Berlin," Interavia Business & Technology, December 1999, p. 6.
—Maike van Wijk