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Aviation History
1996
1996 - 1703.PDF
BUSINESS KLM tries to pacify Northwest KEVIN O'TOOLE/LONDON KLM HAS MOVED to patch up its strained boardroom relationship with Northwest Air lines, proposing that the carriers be locked into their alliance agree ment for up to five years at a stretch. LTnul now, the agreements have been ratified annually, but KLM chairman Pieter Bouw has pro posed that this be changed to a rol ling agreement, renewable every three to five years. KLM says that Bouw discussed the issue during a "positive" recent meeting with Northwest president John Dasburg, and that he has agreed to consider the proposal. The discussions appear to be part of a concerted attempt by KLM to put the alliance back on course after 1995's bitter boardroom row over shareholders' rights, which led to Bouw quitting his seat on the Northwest board. A further casual ty has been the postponement of talks on creation of a cargo alliance. At the centre of that dispute has been Northwest's fears that KLM is attempting to gain "creeping con- Bouw: rolling proposal trol". KLM has always denied the charge and says that Bouw made the point again in his discussion with Dasburg. "KLM doesn't want con trol, but the comfort of continuity in the alliance," says the carrier. In another display of co-operation, KLM has also concluded a deal to sell back the bulk of its preference shares to Northwest. The shares, which do not hold voting rights, were acquired by KLM in 1989 when it took part in the Northwest buy-out. KLM stresses that the preferred stock holding was "...always in tended as a purely financial transac tion", with no strategic im plications. The sale should net KLM around S3 87 million. Although the stock repurchase is being greeted as a sign of growing trust between die carriers, it does not have direct implications for the shareholder-rights dispute. KLM says that it is pressing ahead with its court challenge to the "poison-pill" measure adopted by Northwest. This effectively bars any one shareholder from holding more than 20% of voting rights. KLMholds 18.8%, buthas options to convert its remaining preference shares in 1998, taking the total up to 23.5%. KLM has been angered that these options may be rendered worthless by the poison pill. • Aerospatiale/Dassault given new date JULIAN MOXON/PARIS THE FRENCH Government has tightened up the timescale for agreement on a merger between Aerospatiale and Dassault Aviation, with January 1997 now set as the new deadline. Dassault Aviation has agreed to the new date, promising that".. .die technical, financial and industrial conditions for the fusion will be in place before 1 January, 1997". The original plan had focused on com pleting the tie-up by 1998. A joint Dassault Aviation/- Government statement was re leased on 1 July, the day after the original deadline for a framework accord. It ensures that the initially strong objections to the merger by Dassault president Serge Dassault have effectively been overcome. One industry source says, however, that a "great deal of work" remains to be done before a final agreement, covering all areas of the deal, can be forged. The overall corporate structure has yet to be agreed, although most sources speculate that it will be along the German Workforce: 38,000 Ownership: French Government 62%, So- gepa (state holding company) 20%, CDR- Credit Lyonnais 17.8% (state-owned bank) Sales: Aircraft Fr23.3 billion Helicopter Fr9.4 billion Space & Defense Fr8.6 billion Missile Fr5.0 billion Maintenance Fr2.8 billion Total Fr49.2 billion Net loss: Fr981 million • •M.-MJIIMW^M?! Workforce: 9,300 employees Ownership: Dassault family 49.9%, Sogepa (state holding company) 45.76% Sales: Military aircraft Civil aircraft Other Total Net profit: Fr6.4 billion Fr4.0 billion Frl.2 billion Frll.6 billion Fr401 million lines, with a non-executive chair man, possibly Serge Dassault, heading a supervisory board, while the day-to-day running of the busi ness is led by an executive board of directors, headed by a chief execu tive, who is likely to be an outsider. A key issue is over merging the different accounting systems of pri vately owned Dassault and state- owned Aerospatiale. Once these problems have been tackled, how ever, the two groups will become a single company able to offer an almost complete line-up of aircraft, missiles and spacecraft. There is little overlap between product ranges to cause conflict at an operating level, a fact expected to avoid any European competition concerns. Dassault's fighters and corporate-aircraft businesses will fit with Aerospatiale's civil aircraft, missiles, helicopters, light aircraft and space operations. Dassault Electronique and Dassault Sys- temes are not included. • GEC-Marconi raises profits GEC-MARCONI HAS im pressed analysts with an unex pectedly strong rise in profits, and the GEC group claims that is has now resolved the contract-overrun problems which have dogged its defence-electronics arm over the past year. The GEC unit ended the finan cial year to March with operating profits up at £291 million ($450 million), a rise of £86 million on 1994/5. Sales also grew strongly, to top £3 billion. The improved operating perfor mance was marred, however, by a provision of £48 million to cover "a contractual dispute". GEC does not identify which programmes are involved, but difficulties on projects such as the Phoenix reconnaissance drone and the Eurofighter EF2000 radar are among likely candidates. GEC says that"... solutions have now been found for the technical problems, and progress has been made with the associated commer cial agreements". The group does not anticipate any further charges. Acquisitions, led by naval ship builder VSEL, contributed $383 million to sales and £60 million to profits. VSEL also helped to take the GEC-Marconi orderbook up by 24%, to £6.2 billion. GEC also pleased financial mar kets by announcing that George Simpson would leave his present post as chief executive at Lucas In dustries to take over as group man aging director in early September. Simpson is shepherding Lucas into a merger widi US automotive- parts manufacturer Varity, raising speculation that the Lucas Aero space business may eventually be put up for sale. • NEWS IN BRIEF • MALI SALE The West African state of Mali has become the latest in the region to outline plans for airline privatisation, in cluding that of its domestic carrier, Malitas, on a list of planned asset sales through to 1998. FLIGHT INTERNATIONAL 10 - 16 July 1996 15
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