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Snecma boss refuses to bow to demands for M88 price cuts

NEW CONTROVERSY is surrounding Bernard Dufour, the recently installed president of French engine- manufacturer Snecma, with his refusal to accept the defence ministry's demand for a 2% reduction in the price of a batch of M88 fighter engines.

Dufour caused a stir, shortly after he was named president in October 1994, by demanding (unsuccessfully), that the new European military transport, the Future Large Aircraft, be powered by turbofan engines, instead of turbo-props. Now, he is leading French industry objections to equipment price cuts demanded by the French defence minister, Francois Leotard.

The order is for a batch of 20 M88s for the Dassault Rafale fighter, worth around FR600 million ($110 million). Dufour contends that Snecma has already embarked on a 30% cost-reduction programme, and has reduced its workforce by 4,000, to 10,000, since 1989.

A French defence-industry grouping led by Dassault president Serge Dassault, Le Conseil des Industries de Defense, has called for immediate negotiations with the Government and the defence ministry to resolve the issue.

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