Dassault is cautiously tightening its belt despite having just celebrated a record 2007 when sales surged and profits jumped 36% to €382 million ($563 million).
Speaking in Paris, chief executive Charles Edelstenne reported that while consolidated sales last year surged by 23.6% to €4.08 billion from €3.3 billion in 2006 - driven by a historic high tally of 212 Falcon business jets - the French airframer was preparing to combat a worrying economic downturn and an already crippling dollar/euro exchange rate.
Speaking to Flight International, Edelstenne said: "Fifty per cent of our production of civilian aircraft is in Europe and therefore paid for in euros but we are forced to sell in dollars both because our competition is in dollars and our customers invariably want us to quote in dollars. We lose out immediately."
"So my problem now is to face this new balance between the dollar and the euro. We will do that principally through subcontracting more of our production, 10% more production in either the dollar zone, in low-cost countries or even in countries like France which can offer low-cost production, all this in an effort to lower costs."
He said that as the value of dollar had decreased by around 15% Dassault would look to reduce costs by 7-8%, reflecting an attempt to correct the variance of operating within the euro manufacturing zone.
Edelstenne - who said he expects Dassault to deliver 90-100 aircraft this year - added that despite the current order book standing at a record €6.26 billion, 86% of which is for Falcon jets, 2008 is likely to be a "period of uncertainty" in terms of orders. "I am worried to observe that there is an economic slowdown in the USA and that this is spreading throughout the world," he said. "I am therefore preparing for the possibility of an impact from this crisis on our market."