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Saab winds down turboprop production as talks continue

Max Kingsley-Jones/FARNBOROUGH

Saab Aircraft has completed a round of reorganisation as it winds down its turboprop production and expects to decide by the end of the year whether to sell the line to another manufacturer.

The Swedish company announced late last year that it was to withdraw from regional aircraft manufacturing, and this will see production of its 33-seat Saab 340 and 50-seat Saab 2000 turboprops ceasing by mid-1999 unless a deal is done to sell the line in Linköping. The move comes as part of the company's strategy to eliminate loss-making businesses and refocus on core sectors such as leasing and aerostructures.

Saab's managing director Bengt Halse says that, although discussions on the sale of the turboprop production line have previously been held with countries such as China and India, talks are now under way with manufacturers from "European countries". He says: "If someone gives us a plan that is financially beneficial, then we could sell the line," he says. Hulse adds that any deal to transfer the line must be examined closely to ensure that continued production does not affect the market values of the in-service Saab fleet.

Halse declines to name the manufacturers involved, but one candidate could be CASA, which is a production partner on the 2000, with responsibility for the wing. In the early 1990s the Spanish manufacturer dropped plans to develop its own regional airliner, the CASA 3000. Eastern European countries could also be contenders. Halse says that a decision will have to be taken before the end of this year if a deal is to be done, and privately believes that it is more likely that production of the turboprops will remain with Saab next year.

Meanwhile, the re-organisation of Saab's customer support, leasing and collaborative programmes divisions took effect at the beginning of September. A further change at the end of the year will see the Saab Aircraft division becoming part of the customer support operation.

With the production line closing, Saab is looking to expand its subcontract work to fill the void. It is already making components for the Airbus A340 under a contract with Aerospatiale, and has signed a memorandum of understanding with Airbus to be a risk sharing partner on the A3XX.

Hulse says that Saab is already working with Aerospatiale, British Aerospace and Daimler-Benz Aerospace on the project and expects to take a stake of between "2% and 6%" in the programme. Specific details of the agreement, such as the components to be manufacturered, are expected to emerge over the next year.

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