THAT BRITISH AEROSPACE and Dassault, are working together on defence projects, is welcome but is not in itself remarkable. After all, they have been partners before, not least on Sepecat, the joint parent of the Jaguar fighter-bomber. What is remarkable is that, this time, the companies are co-operating on their own behalf, not at the behest of government customers.

In short, there is at last evidence that industry is preparing to take a lead on consolidation rather than waiting for governments to act.

There are now few doubts within the European industry that it must co-operate to survive. European Governments too are realising that no single nation can seriously pretend to be able to support a full defence capability on its own. There is also little doubt about the urgency to act. While Europe toys with consolidation, the USA is forging ahead to create formidably competitive and highly efficient giants such as Lockheed Martin.

The US defence market now has no more than five major companies sporting a full military-aircraft and helicopter capability, with a similar number in the missile arena. Europe still has twice that number, with all the inefficiencies and duplications which that implies. Yet, while the problems are clear enough, progress towards true cross-border co-operation has been painfully slow.

It is important here to make a distinction between industrial "co-operation" and government-inspired "collaboration". Recent European defence-procurement history is littered with examples of companies working on the same projects, not necessarily because they wanted to, but because their customer or sponsoring governments insisted that they do. These involuntary partnerships have more to do with the concept of procurement-driven work share than with commercially driven partnerships. This can easily be seen in the tortured histories of projects such as the Eurofighter 2000, where there have been too many arguments over who is going to get which part and not enough on which partner is best at making that part.

Governments, which are after all, run by national politicians, can be expected to do little else than fight for the home camp and attempt to impose their own ideologies. Take France and the UK. The French industry is now suffering from having had too much Government strategy, which has kept it from facing up to the need for consolidation, while the UK has suffered from having no industrial strategy at all, leaving it at the mercy of market forces.

Industry may need support from government, but it does not need the sort of "work-sharing"-based collaborations which nation- al politics bring. True partnerships come when companies are drawn together by the attraction of building something for a profit - as in the latest venture between BAe and Dassault.

True, the aircraft programmes most likely to benefit in the short-term from the technologies which this partnership may develop are themselves programmes which have been developed under the work share-driven system, rather than a commercial system - the EF2000 and the Dassault Rafale. Unlike those projects, however, which are not built on the premise of long-term co-operation extending beyond the manufacturing period, the BAe/ Dassault venture could have a long-term future.

It may even lead to there being a permanent, non-project-specific, link between the two. That would be a truly momentous development for the European industry.

That is an essential difference between Europe and its arch-competitor, the USA, which although it is admittedly free of trans-border cultural restrictions which inhibit alliances, has achieved mergers of the scale needed in Europe. A Lockheed Martin or Northrop Grumman is not in a totally different league from a BAe Dassault or a DASA Aerospatiale: it is just that they already exist because they have a home market to which they can adapt. In Europe, they remain pipe dreams - but perhaps there is just a glimmer of fire now.

Source: Flight International