The Airbus Industrie partners are preparing for a tough round of negotiations over the value and scale of assets which are to be pooled when the consortium becomes a fully fledged company, but little firm progress is expected until Aerospatiale has sealed its own merger with Dassault Aviation.

A memorandum of understanding, which was promised by the end of 1996, was finally signed on 13 January, pledging to turn the consortium into a stand-alone company. In principle, it would incorporate the full range of design and development, production, procurement and customer services functions now carried out by the existing four partners.

No firm decision appears to have been taken, however, over exactly which assets will eventually be pooled. A statement by the partners says only that the issue of what is transferred to the new company will depend on "-how far the assets are essential for the described functions and their detailed valuation".

High-level working parties are understood to be preparing to begin tackling the valuation issues, which is always the most problematic in any merger, with the aim of completing the study by the end of this year.

Sources close to the talks admit that any firm decisions are likely to have to stay on hold until after Aerospatiale has tied up its pending merger with Dassault Aviation, expected to be finalised in the first half of 1997. The two companies themselves are involved in highly sensitive negotiations over valuation, which sources concede will have to be agreed first before Aerospatiale can throw itself into detailed discussions over Airbus restructuring.

There are also continuing doubts over how much of its Airbus operation Aerospatiale is willing to relinquish. Around 30%of the French group's workforce and closer to 40%of its sales come from Airbus - representing a transfer of up to some 11,000 jobs and $4 billion turnover if the whole operation were put into the new company.

The assets are centred on the final assembly lines at Toulouse, as well as aerostructures plants at StLazare and Nantes.

German partner Daimler-Benz Aerospace (DASA)has been the most public supporter of a full merger of Airbus work from design through to assembly, although it has not yet specified how much of its own assets would be transferred. DASA Airbus employs a workforce of 13,000 at five plants in Germany, with commercial-aircraft sales in the region of $2.5 billion.

British Aerospace is openly talking about the possibility of contributing the whole of its BAe Airbus operations, based on the wing design and assembly plant at Filton and the manufacturing operations at Chester. That would involve around 4,000 jobs, although the group says that another 2,500 people who are working elsewhere within the group on Airbus programmes would not be included. BAe does not disclose the value of its Airbus work, but it is estimated to be in the $1-1.5 billion range.

The aim is for the new company's ownership to continue to reflect the existing shares held by the partners, with Aerospatiale and DASA both holding 37.9%, BAe taking 20%and CASA of Spain 4.2% of the shares. That will require compensation for companies which contribute more than their share in assets, although details of how this may be achieved have yet to be laid down.

Source: Flight International