Italy's state-owned aerospace and defence group, Finmeccanica, is poised for yet another sharp change in direction after the resignation of its long-time president Fabiano Fabiani.

The move is expected to end attempts to privatise the whole group and lead to the sale or merger of individual businesses such as Agusta and Alenia defence units.

Fabiani, who has led the group for 12 years, resigned after a showdown with Michele Tedeschi, the head of Finmeccanica's owner, the giant IRI state-holding company.

Fabiani had been working to turn Finmeccanica, which was historically a holding company, into a diversified industrial group capable of being privatised as a whole - a process which is virtually complete. Tedeschi, however, is understood to be in favour of de-merging into smaller, specialised units, which would be easier to put into alliances or sell.

The differences came to a head as Finmeccanica revealed losses of L540 billion ($315 million) for 1996. This includes restructuring provisions of L575 billion, but IRI claims that almost half is from a poor operating performance.

A new strategy is still being drawn up by IRI, but is certain to have wide-reaching implications for the Italian defence and aerospace industry, 70% of which is now controlled by Finmeccanica.

Among the main candidates for sale is Agusta, only recently striped back to its core helicopter operations and absorbed as a group division. In a recent interview with La Prealtina, Agusta head Amedo Caporaletti suggest that Europe will inevitably be left with just two helicopter players and describes Westland, with which Agusta is already linked through the EH Industries venture, as a natural ally. "It is necessary to find the legal framework in which to forge an alliance," he says.

Alenia Difesa, Finmeccanica's defence-electronics division, would also be freed to forge ahead with alliance plans now being studied with GEC-Marconi.

Other group holdings, such as Fiar and missile company AOSM, which have not yet been merged into Finmeccanica, could also be sold relatively easily.

Source: Flight International