Julian Moxon/PARIS

Newly formed Thomson-CSF's defence electronics group is to undertake a major reorganisation in a bid to raise productivity and profitability and reduce costs.

According to company president Denis Ranque, the measures have been designed to "-improve our range of products, systems, services and equipment and to maintain our technology".

Thomson-CSF achieved an operating margin of only 5.6% in the first half of 1998 - less than half that of many of its European rivals. Since then, the company has absorbed Dassault Electronique and taken a 49% stake in Alcatel Space and Aerospatiale's satellites business. Turnover rose slightly over the previous half-year, at Fr16.4 billion ($2.73 billion), while orders were virtually the same, at Fr72.3 billion. Debt was reduced from Fr222 million to Fr140 million, including a Fr 70 million provision for restructuring.

A study, expected to take around three months to complete, is due to be launched on 1 October, to look at ways of improving performance. Ranque has already initiated major changes, removing two management levels and moving to a less centralised, more horizontal, organisation, with eight operational units reporting directly to him. These will be airborne systems, avionics systems, communications systems, naval systems, information systems and services, optronics, air security and missile systems and tubes and components.

Ranque rejects the idea of further integration of the defence electronics industry in Europe. He believes that a single European entity grouping together the entire defence electronics industry would be too weakened in the event of failure to capture a major contract against a US competitor. "With the kind of monolithic contracts awarded today, you are courting disaster and risking the jobs of thousands of workers every time if you do not win," he says.

Source: Flight International