A major row has broken out between the French and German partners in Airbus Industrie over German claims that France is blocking progress on converting the consortium into a fully fledged company.

The chairman of the Airbus supervisory board, Edzard Reuter, has threatened to resign from the working group which is charged with transforming Airbus by the end of 1999 "-if I decide that, during the course of this year, the project has come to a standstill".

In a German newspaper, Die Welt, interview, he says that there is an "-urgent need to negotiate", demanding that the Airbus partners "-put their financial results on the table". This will allow an evaluation of each enterprise to be carried out before incorporating the partners' Airbus- related sites into the eventual company.

In principle, the working group is looking at incorporating design and development, production, procurement and customer-service functions of the four Airbus partner companies - Aerospatiale, British Aerospace, CASA and Daimler-Benz Aerospace (Dasa) - into a single, stand-alone, company. The issue of valuation has fast become one of the principal areas of argument between the two senior partners, Aerospatiale and Dasa, in the Airbus consortium.

Reuter, the ex-Dasa president, has now accused Aerospatiale, in particular, of delaying the valuation of its sites.

The accusation has been called "totally unjustified" by Aerospatiale, whose vice-president for civil aircraft, Claude Terrazoni - also a permanent member of the Airbus executive board - says that, in terms of the Airbus partnership, "-we do the most to evolve ideas and make contributions". He says that Aerospatiale has "-signed an accord on the future of Airbus and is present on the working group that is evaluating the sites".

Aerospatiale's position is complicated by the fact that it is in the middle of merger talks with Dassault Aviation, which are expected to be finalised by the end of this year. It is anticipated that this will lead to full privatisation of the merged group.

Aerospatiale has carried out an "exhaustive analysis" of its factories, to find out which are best suited for the future Airbus company, but Terrazoni adds that the valuation "-should include intangible assets as well", such as the knowhow which Aerospatiale has built up during its years of aircraft manufacturing. "If people think intangible assets are free, they are wrong," he adds. Reuter disagrees. In the interview, he makes it clear that companies should be valued "on their profitability and not on their substance".

The argument reflects the extreme difficulties inherent in changing the Airbus structure from a loose grouping of national companies with clearly defined manufacturing roles in the consortium to that of a company in which, hypothetically, the workshares are allocated on the basis of cost- effectiveness.

Theoretically, under the new arrangement, production and integration of the cockpit, now Aerospatiale's responsibility, could be moved to another site if the manufacturer is judged not to be cost-effective enough.

Terrazoni insists, however, that Aerospatiale's experience in system integration makes it "unique"in Europe. "That must come into the evaluation," he states.


Source: Flight International