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Aviation History
1997
1997 - 2286.PDF
NEWS ANALYSIS Missing the bandwagon? The Jospin Government is to reveal its strategy for French aerospace which will also determine the fate of Europe JULIAN MOXON/PARIS ATTHE END of this month, Lionel Jospin's new socialist Government is scheduled to reveal its plans for the re organisation of France's still large ly state-owned aerospace industry. Jospin's announcement, when it comes, is likely to prove a watershed for European aerospace, determin ing France's place in the region's consolidation. It is not just French industry which has been anxiously awaiting word of its fate. Players in Germany and the UK have also largely put their consolidation strategies on hold as they wait to see which way France will swing. What unites them all is the admission that major surgery to the structure of the region's industry is vital to survive the challenge from the emerging US giants. In the space of seven years, a dramatic US re-organisation has seen 23 com panies shrink into just three groups. Most observers believe that time is running out. While Europe dithers, even the monolithic Rus sian industry is undergoing a major regrouping which is starting to show through internationally, par ticularly in defence markets. There is now a real sense throughout the region that time is running out both for Europe and France. Some analysts now raise the previously unthinkable pro spect that unless it moves more decisively, France's flagship indus try may simply be bypassed by oth ers in Europe who feel that they cannot risk further delay. The process has not been helped by the confusing signals emerging from the Jospin Government, which follow a 30-month period of disarray propagated by the previ ous Government's bungled sell-off of Thomson-CSF and continued argument over the planned merger of state-owned Aerospatiale with privately owned Dassault Aviation. Added to this has been France's Will the rest of Europe laugh along with Dassault (left) and Jospin? "The Government... was considering handing its 4-5.9% stake in Dassault Aviation to Aerospatiale, a move designed to defuse Dassault president Serge Das- saulfs staunch resistance to a merger." intransigence over converting Air bus Industrie from a loose grouping of four partners into a properly con stituted company- a position which has grown from Aerospatiale's resis tance to handing over its research- and-dcvelopment assets to a new company, which would strip away its position as leader of France's civil-aero space industry. Having aban doned the idea of disposing of its 58.3% stake in Thomson-CSF to one of two official bidders - Alcatel or Lagardere -Jospin's administration seems to be looking at a remedy based on opening up its capital while preserving a "decisive national interest", likely to be 40%. A parliamentary report released on 3 September added to the fray by calling for a "complete restructur ing" of the defence industry, and sug gesting diat Thomson-CSF become die heart of a "centre of excellence" around which die rest of French, then Euro|iean, defence electronics could consolidate. It also raises die possibil ity of the Aerospatiale/Dassault merger being enlarged to include Thomson-CSF".. .togive real foun dations for our defence industry". Even widiin France, such an approach does not find universal approval. French securities compa ny Credit Lyon- nais Securit- ies/Cholet Du- pont produced a report in August accusing the French Govern ment of a "lack of clarity" in its plans. It suggests that the "long-term survival of business in the defence sector" would be better served by creating a missiles and satellites group through the consolidation of Aerospatiale, Alcatel and Matra, a civil and military group with Aero spatiale and Dassault Aviation and a professional-electronics group through Alcatel, Dassault Elec- tronique and Thomson-CSF. "Jospins announcement is likely to prove a watershedfor the whole of European aerospace." "This would strengthen their posi tion and allow the integration of European groupings," it adds. In late August, a new element was added when the Government said that the reform of Airbus had become a "priority", possibly even overtaking the Aerospatiale/Das sault Aviation merger in impor tance. In a move welcomed by Daimler-Benz Aerospace, the other, 37.9%, Airbus partner, it appears also to have moved towards commit ting Aerospatiale's civil-research resources to the new company. Furthermore, the Government suddenly let it be known that it was considering handing its 45.9% stake in Dassault Aviation to Aero spatiale, a move designed to defuse Dassault president Serge Dassault's resistance to a merger with non- privatised Aerospatiale. This would leave die military- and business-jet manufacturer with its desired inde pendence, while linking the two financially, as well as opening the French civil-aircraft sector to incorporation into Airbus. The addition of the new Airbus A319 Corporate Jet to the top end of Dassault's Falcon range has already been mentioned as a possibility. Re-organising Airbus Industrie and opening the French defence industry to European consolida tion are clearly tough questions for the Jospin Government. The issue is whether the Government will be brave enough to make a tough response, potentially flying in the face of its ideological commitment to state ownership and risking alienation from the French unions. The freezing of the former Gov ernment's privatisation plans did little to add confidence to an already ill-defined process. The hope now is that the administration will heed the advice received from European industry leaders during recent Parliamentary hearings and move forward with a solution aimed at European, and not solely French, consolidation. • 26 FLIGHT INTERNATIONAL 10 - 16 September 1997
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