Snecma has completed the takeover of rocket engine and advanced materials venture Société Européen de Propulsion (SEP), which now becomes a wholly owned group subsidiary. SEP, in turn, will take over Snecma's brakes subsidiary, Messier-Bugatti, to create what is claimed will be Europe's largest aviation and automobile braking company.
The restructuring was first outlined in 1996 by new group president Jean-Paul Béchat, who instituted an abrupt reversal of the strategy to return Snecma to its core aero-engine business (Flight International, 13 -19 November, 1996). Under his predecessor, Bernard Dufour, who was eventually forced to stand down, Snecma had been on course to sell its 51%holding in SEP - the remainder was held by other Government agencies -and put Messier Bugatti into the hands of US manufacturer BFGoodrich.
The SEP takeover comes at a time when the rocket-maker has revealed that despite a slight reduction in turnover to Fr5.03 billion ($1 billion), 1996 consolidated net profit will be up by 25%, to Fr159 million compared with 1995.
The restructured braking subsidiary will be have been created by the end of February, says Béchat, and will incorporate the activities of SEP subsidiary Carbone Industries, which already supplies the advanced carbon-carbon materials for a new range of brakes developed by Messier-Bugatti for future Airbus Industrie aircraft.
Béchat has also announced the creation of a new group services company through the merger of Snecma's own maintenance activities with those of its Sochata engine repair and overhaul subsidiary. The new Snecma Services has been formed primarily to take advantage of the increasing market for maintaining the large number of CFM International CFM56 engines in the field. Béchat agrees that a deal with Air France Industries, which also has a large CFM56 maintenance operation, "is an option", but he says that nothing concrete has been discussed.
The restructuring comes as the group reports the first signs of an upturn in its fortunes. Béchat reveals that Snecma, France's second largest aeronautics company, experienced a sales rise of 4% in 1996 and is predicting a further 20% growth for this year as the recovery in engine orders begins to take hold. That would leave the group showing sales of around Fr22 billion ($4.1 billion).
Group sales fell by 25%over the four years of recession, while the engine business, which accounts for almost half of the group, had a 40%fall between 1991 and 1995. Béchat says that all the group businesses, except for the engine component, will "-either break even or go into profit" over the year.
The military business continues to decline, however. It accounted for less than 29% of sales in 1996 and may be as low as 20% in 1997, says Béchat. He adds that Snecma is "ready to participate" in the funding of engines for an initial batch of Dassault Rafale fighters for the French air force to help export prospects pending full service entry of the aircraft. Export hopes also centre on the Larzac engine which powers the Russian MAPO Mig-AT trainer.
Relations with General Electric, co-manufacturer of the CFM56, have improved considerably since Béchat's arrival. "There is much less tension now," he says. Snecma has agreed to join the proposed 445kN (100,000lb)-thrust version of the GE90 engine for growth Boeing 777s, and is also set to participate in the new Pratt &Whitney/GE GP7000 engine for the forthcoming Boeing and Airbus high-capacity aircraft. Agreement on Snecma taking a risk-sharing stake in the planned GEXX for the stretched A340-500/600 will come "very soon", says Béchat.
Source: Flight International