SENIOR GOVERNMENT figures in the UK and Germany have warned that Europe's defence and aerospace industries will have to consolidate to face the challenge posed by restructuring in the USA.

UK defence secretary Michael Portillo, speaking to the UK's Parliamentary Aerospace group, warned that industry "...faces a very tough challenge from the USA, where something amounting to a revolution has taken place."

Although normally anti-European, Portillo indicates that the UK Government recognises the need to support consolidation within the region's defence sector.

"We need to enable UK companies to enter into European partnerships," he says, although he adds that such moves have first to make "industrial logic".

"We will have to make a better job than we have so far of collaboration," he warns, flagging up the fact that the European industries' "...unit costs have been vastly higher than those of the USA".

In Bonn, Government aerospace coordinator Norbert Lammert has called for a radical restructuring of the European aerospace industry.

Lammert - the parliamentary state secretary to the economics minister - warned the cabinet that Germany's aerospace sector can continue to exist only, as part of an integrated European industry. He stresses that Airbus Industrie, in particular, needs to undergo dramatic changes to switch from a consortium into a normal company, to face the challenge from the USA.

Source: Flight International