The Thomson-CSF privatisation gave Lionel Jospin's new French Government a tailor-made opportunity to show its commitment to European aerospace restructuring. It flunked the chance. Instead it seems to have made a narrow national decision, which stands to do as much harm as good for the cause of European integration.

Whatever the arguments over the merits of the decision within France, it has unquestionably sent out completely the wrong signals to the rest of Europe. Even on the most generous interpretation (and there is more interpretation than fact at this stage), the package looks like an exclusive French affair - and far from apologising for the fact, it is being trumpeted as one of the decision's key benefits.

Alcatel Alsthom, Dassault Industries, Aerospatiale and Thomson-CSF will merge bits of their defence-electronics/space businesses to create sizeable new national leaders, but none, as yet, has a full-blown European alliance in place. There have been broad references to these groupings providing a focus for future European consolidation, but that is heavily reliant on others of Europe's aerospace manufacturers sharing the French Government's, at present, rather hazy vision of the future. On past reckonings there is little evidence that the likes of privately owned British Aerospace or Daimler-Benz Aerospace will be keen to play ball with the new French national champions. Both had backed Lagardère's plans for a "European" solution, which had seemed close to winning the previous Government's approval.

Neither is it clear that Thomson-CSF has in fact been privatised. The state will retain the largest single shareholding, a veto over key decisions and the right to select a president to head the new grouping. Alcatel, a commercial privately owned grouping, appears to be in the driving seat, but it will hold that position at the state's behest rather than as of right. Judging from the comments coming from Jospin's ministers, the Government hopes to sell the package to the French public on the grounds that the state is still largely in control.

That may impress the voters at home, but it is unlikely to fill potential partners with confidence. Even Lagardère, with more experience than most of the twists and turns of French defence policy, shrugs off its defeat, saying that the level of state influence anyway made it incompatible with the group's broader European goals. That may be no more than sour grapes and Lagardère, plus its partners, may soon be stepping over each other to link up with the new French groupings. The danger is that they may equally do nothing of the sort. The partners already have a near world-beating missiles union, without the need for Thomson-CSF, and could pursue the same in satellites.

At worst that could result in two or more rival groupings fighting for the centre-ground of European aerospace/ defence electronics. It is an unnecessary battle which the industry does not need. At best, it will create the further delays which the industry can ill afford as it attempts to close the gap with its large and lean US competitors. At worst, it could destroy the consensus which has painfully been put in place over the past few years that European consolidation must come first. Some already warn that divisions within the region could risk pushing European companies into the arms of US partners.

It is still not entirely clear where exactly France does plan to go next in its industry restructuring. The more optimistic view is that, contrary to appearances, there is indeed a grand plan. By creating new national giants, it is argued, France will have the strength and security it needs at home in order to be more creative in finding solutions abroad. If that is indeed the ambition, then it smacks of the kind of national politics which will do more to hinder than to help progress towards restructuring.

Europe's aerospace industry still has a mountain to climb in establishing itself as a viable competitor to the US industry and to the looming presence of Asia. It will not achieve that goal if it is burdened by aspirations of national supremacy. There is little enough room at the top anyway. A mad scramble to reach the peak could jeopardise the whole expedition.

Source: Flight International