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Aviation History
2003
2003 - 2524.PDF
BUSINESS FUNDING LMAASA lays off staff as woes mount The second half of October saw Lockheed Martin's Argentinian subsidiary, Lockheed Martin Aircraft Argentina (LMAASA), lay off its entire 900-strong work force for six days in an attempt to stem financial losses. Management opted for the temporary shutdown to gain time and reach an agreement with the Argentinian government, claiming that it did not have the funds to continue operations. Owing to a lack of supplies, LMAASA is unable to finish modernisation work on 10IA-58A Pucaras and five IA-63A Pampas, as well as overhaul work on nearly 100 air craft engines. Although LMAASA and the government negotiated a new contract in January, no offi cial agreement has been signed. The Argentinian government owes LMAASA around $47 mil lion - of which $35 million is debt that has been accumulated over the past 10 months relating to maintenance work on Argentinian air force aircraft and production of 12 AT-63 Pampa jet trainers. ACQUISITION FLIR moves to buy Indigo Sensor supplier FLIR Systems is to acquire infrared detector man ufacturer Indigo Systems for $165 million in cash, plus $25 million in stock options. FLIR outbid L-3 Communications, Rockwell Collins and others for the privately held company, which has estimated 2003 rev enues of $55 million. Fast-growing FLIR is a leader in the commercial forward-look ing infrared sensor industry, with sales this year expected to exceed $300 million. Founded in 1996, Goleta, California-based Indigo pro duces cooled and uncooled infrared detectors, camera cores and finished cameras. Its share holders must approve the deal. PRIVATISATION JULIAN MOXON / PARIS Snecma weathers crisis and heads for market More than 50% of French group expected to be sold off after release of 2003 figures French propulsion and equipment group Snecma is heading for privatisation in the second quarter of 2004 as it weathers an industry crisis it says is the "worst in 10 years". Chief executive Jean-Paul Bechat says the group, one of the last remaining out of the original 21 companies earmarked by Paris in 1993 for privatisation, will proba bly be offered to the market after the 2003 results are presented on 24 February. "Any potential investor would want to see the lat est figures before committing to purchasing shares," he says. Flight International understands that Bechat is to brief potential investors in the City of London the day after the results are published. He declines to speculate on how much of the company, now 97.2% owned by the French government, will be sold off, but industry sources believe it will be in excess of 50%. Bechat says that, although the aerospace industry "is going through a major crisis", Snecma is set to post 2003 sales slightly up on the €6.5 billion ($7.6 billion) figure for 2002, along with a small increase in profits. First-half figures revealed in September were, however, slightly below those for the same period in 2002, but Bechat says he "expects recovery in the second half, unless there is a disaster". Snecma has undergone a pro longed period of acquisition and consolidation under Bechat's seven-year leadership that has seen the company double in size and diversify into aerospace equip ment, now accounting for a third of consolidated sales. Its propulsion business was strengthened by the takeover in 2000 of small-engines company Turbomeca (through the acquisition of Labinal) and the development of its aircraft engine services business. This year has also seen the selection of the Snecma/NPO Saturn partnership to power the Sukhoi Russian Regional Jet and the long-awaited go-ahead for the Airbus Military A400M transport, in which Snecma part ners ITP, MTU and Rolls-Royce on the TP400-D6 turboprop. Several important contracts have also been won for the Airbus A380. Bechat is watching develop ments in European second-tier propulsion companies and admits to a possible interest in MTU after its sale by DaimlerChrysler to one of two private equity bidders. Bechat says the company is "not yet significant" for Snecma, but adds that "financial concerns are unlikely to stay in the propulsion business forever". INVESTMENT ALEXANDER CAMPBELL / PARIS GIFAS looks to North Africa as it considers expansion options French manufacturers are more likely to shift work to North Africa than eastern Europe, says aero space industry association GIFAS. Leading companies, such as Labinal and Snecma, already oper ate joint ventures in Morocco, and pressure to cut costs by manufac turing outside the euro zone will press more to follow them to Morocco and Tunisia, according to GIFAS managing director Guy Rupied. "The main problem at the moment is the US dollar rate," Rupied says. The currency has fallen 27% against the euro since 2001, putting euro-zone companies at a severe disadvantage. Eastern European countries are less expen sive but, says deputy managing director Olivier Gorge: "It is difficult to work in Poland or the Czech Republic or Hungary. They need to be trained to our standards and everything must be translated into German or English or Polish. It's easier to look at the Maghreb countries [Morocco and Tunisia]. It is not far from Toulouse to Tangiers. They are French-speaking and French-educated, and also low-cost- much lower than in eastern Europe." Gorge points at European Union programmes to train North African engineers in France as giving French companies another advantage in the region. Costs are also lower in Russia, but there are other disadvantages that will limit French involvement there. As Rupied says: "Russia has excellent technology, research and creativity, but the problem is their economy and industry are not organised. They are still based on the Soviet Union model, the legal position is not always very clear, and the rules are a little different." Co-operation on design and research is possible, he adds, pointing to Snecma's involvement with the Sukhoi Russian Regional Jet project, but "the design responsibility at least has to stay in France". ^V* Rupied: Currency strength putting euro-zone countries at disadvatage 28 4-10 NOVEMBER 2003 FLIGHT INTERNATIONAL www.flightinternational.com
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