BOEING'S PURCHASE of Rockwell's defence business underlines - if any extra emphasis were needed - just how rapidly the major US aerospace prime contractors continue to consolidate. It also provides an embarrassing reminder of how far the European industry - hidebound by the legacies of state ownership and national politics - continues to lag behind its US counterpart.
Europe is already as much as five years behind and, as the USA forges ahead, the gap appears to be widening ever further. Yet Europe's aerospace leaders, encouraged by the prospect of a long-overdue restructuring in France and some constructive talks on Airbus Industrie, seem confident that the glacial pace of progress is about to change - but are they right to believe that they can catch up?
The sheer scale of US consolidation has so far been almost unimaginable in Europe. A $3 billion acquisition such as Boeing's would be among the largest ever carried out in Europe. In US terms, it is a routine piece of tidying up when put alongside the mega-mergers of Lockheed Martin/Loral or Northrop Grumman. Further deals are already mooted. Harry Stonecipher of McDonnell Douglas, once in its own talks with Boeing, is talking confidently of weighing into the acquisition market with up to $6 billion to spend. Nor do US legislators seem seriously inclined to call a halt.
The bulk of the European industry has had to fight almost insurmountable obstacles to reach far smaller deals. All agree that the consolidation must take place at a European level, yet talk of ceding national assets, especially in defence, to "foreign control" is largely regarded as heresy. Attempts at cross-border mergers, let alone acquisitions, have proved fraught in the extreme.
A classic example is the mind-numbing series of delays to, which Matra and British Aerospace were subjected in their efforts to create an Anglo-French missile merger. The blocking centred around a certain government's refusal to countenance the deal, unless another government bought a certain product. In the USA, the emphasis would have been on getting the companies together as quickly as possible.
A few of Europe's aerospace leaders (and a handful of politicians) have given public vent to their frustration at the region's inability to keep up with US consolidation. Most also modify their comments with expressions of optimism that consolidation is at last ready to roll. Yet it has been difficult to gauge the real mood within Europe's boardrooms.
Now, however, the world will know a lot more of those leaders' views about where the European industry is going, and how it will regain some competitiveness against the US colossi. Flight International and US information-technology group CSC have been canvassing the views of the chief executives and senior strategists who are setting the direction for Europe's major aerospace companies. They have been asked (in confidence) their views on the future structure of their industry, and on how they would like to see it develop. They have been asked to identify where they see the best opportunities for expansion.
The sum of their views will be disclosed at this year's Farnborough air show. While we cannot even hint at those views yet, the world should not be surprised if it turns out that those most frustrated by Europe's painstaking efforts at modernisation are the industry's leaders.
Source: Flight International