French aircraft-maintenance company Sogerma says that it is close to completing re-negotiation of its contract with Israel Aircraft Industries (IAI) on risk-sharing supply of the fuselage and empennage for the Galaxy business jet.

Talks were re-opened following the decision by Sogerma's new president, Henri-Paul Puel, to "-honour, but renegotiate" the original deal after it became clear that the French company would have lost "significant" amounts of money on the contract.

Under the new terms, Sogerma will supply the Galaxy fuselage and empennage from its Rochefort plant, north of its Bordeaux headquarters. The first nine fuselage shipsets will be built by IAI, while Sogerma will produce the same number of empennages. Thereafter, the French company will supply both subsections itself.

According to Sogerma, the original contract was costed on the basis of subcontracting work out, but "-we found we couldn't place work at sufficiently low costs commensurate with high quality".

Following a drastic efficiency-improving re-organisation, conducted since Puel joined in October 1996, Sogerma decided to carry out final assembly of the components itself - although it is still looking for suitable suppliers, and says that it is likely to agree with Aerospatiale, which owns 63.6% of the company, to make some components. Work on the first prototype has begun, says Sogerma.

While details of the new contract are not revealed, Sogerma is negotiating on the basis of "-being able to make money on a significant number of sales". IAI foresees a market for about 200 Galaxys.

Sogerma took over the contract after Yakovlev, IAI's original partner, was forced out by difficulties at its Saratov site.

Source: Flight International