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Aviation History
2004
2004-09 - 2650.PDF
BUSINESS SALES GRAHAM WARWICK / WASHINGTON DC Defence bonanza fuels US aerospace sales explosion Civil aircraft shipments relatively unchanged, but military spending rises by 15% US aerospace industry sales this year are expected to be up by at least $12 billion over 2003, and the Aerospace Industries Association (AIA) is forecasting a similar increase for next year. "At the end of last year we thought 2004 was going to be $1 billion better than 2003. Now we think it will be $12 billion better - and it could be $15 billion," says AIA chief executive John Douglass. "We are talking about $25-30 bil lion of aerospace and defence growth over two years." Higher US defence spending is the major reason for the growth. While shipments of civil aircraft remain roughly unchanged at $35 billion for 2004, sales of military aircraft, engines, parts and services increased 15% to $46 billion; mis siles by 10% to $14.8 billion; and space by 5% to $38 billion. "These numbers show a healthy industry that continues to show strength and fortitude," adds Douglass. "The industry downturn after the terrorist attacks of September 2001 was relatively modest and thankfully shortlived." Exports increased 6.5% to $56.8 billion, while imports declined for the third year, by 2.9% to $25 bil lion, giving the USA a positive aerospace trade balance of almost $32 billion. The decline in value of the US dollar was a major factor. "The dol lar made US products a bargain," says Douglass. US aerospace indus try employment hit a 50-year low of just under 572,000 in February, but has begun to recover and more than 20,000 jobs are expected to have been added by year end. The ageing of the workforce is an increasing concern, with the industry struggling to attract new talent. "We are beginning to see short ages develop in certain areas," says Douglass. Challenges for 2005 include the need to settle the dispute between the USA and Europe over govern ment aid for Airbus and Boeing. "The USA is no longer a party to the 1992 Large Commercial Aircraft agreement," says Douglass. "We have to deal frankly and quickly with the dispute. We do not want a trade war." The association is urging the sec ond Bush administration to make good on its first-term promise to reform the cumbersome and con- Douglass: downturn relatively shortlived fusing US export licensing process, which is "hurting US companies", Douglass adds. The association is also on the alert for further moves to introduce "buy American" in Congress. "Such laws hurt the US industrial base," he says. Correction We would like to point out that the photograph on page 28 last week should have been captioned with the name Wolfgang Driese, who is chairman of DVB Bank, and not Bert van Leeuwen, head of aviation research at the bank. DISPOSAL BAE to take back seat in future Gripen sales BAE Systems has confirmed plans to reduce its commitment to the Gripen fighter programme by partly disposing of its 35% stake in Saab, and will take a reduced role in marketing the aircraft, writes Craig Hoyle. Announced last week, the move to dispose of 15% of BAE's shareholding should be completed early next year and could net the UK firm up to £140 million ($270 million). Reduced support for the Gripen International joint venture, which will remain a 50:50 concern with Saab, will save several million pounds per year, it says. The decision to take a lesser rale in promoting the Gripen was announced earlier this year, when chief executive Mike Turner described BAE's involve ment in the project as "quite an expensive exercise". However, the step has also been viewed as signalling BAE's commitment to the four-nation Eurafighter Typhoon project and, longer- term, to the Lockheed Martin F-35 Joint Strike Fighter. It also reflects its strategy to focus on key business areas including its North American activities. BAE will continue to support selected Gripen sales efforts and will meet its offset commit ments to South Africa, it says. APPOINTMENT MTU appoints chief executive German powerplant specialist MTU Aero Engines, poised for a stock market flotation in 2006, has appointed Udo Stark as its new chief executive, replacing Klaus Steffens who has decided to step down following differences of opinion over the company's strategy. Stark, who currently chairs Frankfurt-based AGIV, takes over on 1 January. He was until 31 October chairman of Germany's MG Technologies. While MTU is refusing to detail the reasons for Steffens' decision to step down, it states that he has requested to be relieved of his position at the end of the year "on account of the divergent views of the company's further development". He will join the supervisory board from 1 January. Steffens has headed MTU for nearly five years. The firm was acquired last year from DaimlerChrysler by US private equity investor Kohlberg Kravis Roberts. TRADING JULIAN MOXON / LONDON SR Technics cuts costs as it braces for difficult conditions The largest company within the SR Technics group, SR Technics Switzerland, has revealed a major cost-cutting programme as the technical services supplier braces itself for the continuing slide in the value of the US dollar and what it terms "difficult market conditions". "International aviation is experiencing the greatest change in its history," says SR Technics Switzerland chief executive Tim Talaat. "The stubbornly low dollar is hampering the export of services from Switzerland. We have to focus rigorously on the permanent changes that are occurring and concen trate on high-value activities." A programme called "Forward" has been introduced to improve efficiency and operating results. The company admits that "some job losses" are likely, on top of the losses revealed by SR Technics Switzerland's engine services division in September. www.flightinternational.com FLIGHT INTERNATIONAL 14-20 DECEMBER 2004 27
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