Matra and British Aerospace started to discuss pulling together their respective guided-weapons units in 1992. It was to take four years of difficult negotiations, coupled with the occasional bout of brinkmanship, to conclude the deal.
Despite the trials and tribulations, including those that still continue as two very different corporate cultures are forced together, the fundamental rationale for the merger is, if anything, sounder today than it was in 1992.
The pending acquisition of Hughes by Raytheon, having already bought Texas Instruments' defence business, will create a missile house which is set to capture more than a 20% share of the world market for air-to-air missiles (AAM) alone over the next ten years.
Faced with competition on this scale, the driver for European consolidation within its fragmented missile sector is thrown into stark relief - it is simply a matter of survival.
While the senior management of Europe's missile houses collectively chant the mantra of consolidation, however, turning words into deeds is proving considerably more difficult. BAe and Matra's talks teetered on the brink of collapse in 1995. BAe's attempts to forging a similar tie with Thomson-CSF failed in 1991, while Aerospatiale and Daimler-Benz's (Dasa's) attempts to merge their respective missile units has also so far come to nought.
Dasa's missile unit, LFK, is now being proferred for sale, with Aerospatiale and Matra BAe Dynamics looking for an acquisition to provide critical mass.
It is not particularly to difficult to divine why consolidation in the missile sector, and European defence consolidation, is considerably more difficult to achieve in comparison to the rampant restructuring of US competitors.
National interests
European manufacturers have to run the gauntlet of conflicting national interests as well as resolve the potential clash of corporate egos. Matra and BAe encountered this particular difficulty in addressing the Royal Air Force requirement for a conventional air-launched stand-off missile for the Panavia Tornado GR4 and Eurofighter EF2000 combat aircraft.
Having set off on the wrong foot in addressing the project (Matra offering an Apache derivative, with BAe teamed with GEC-Marconi on the Pegasus), BAe was to jump ship in eventually leading the Storm Shadow bid, the missile being a derivative of the Matra Apache.
After managing to pull together a single bid for the RAF's requirement, Matra and BAe were then hampered by French governmental bullying over the UK's choice of weapon. Senior officials within the French defence establishment were to threaten that should the Matra missile not be chosen by the UK Ministry of Defence (MoD), then the proposed merger would Ìnd no favour in the political corridors of Paris.
Given that the UK Government and the MoD's stated policy was one of competition, the French noises off-stage were inflammatory, to say the least.
Storm shadow chosen
In the event, Storm Shadow was picked by the UK MoD - leading some of the losing competitors to voice concerns that politico-industrial considerations had outweighed military ones. Senior MoD procurement officials have also admitted that in purely operational terms, Storm Shadow was not the top of the list, although its performance was judged "acceptable".
In industrial terms, launching Matra BAe Dynamics on the back of a major MoD procurement project has clear attractions. The Storm Shadow/Apache EG family of stand-off weapons will meet both RAF and French air force requirements, providing an immediate two-nation stamp of approval for the export arena.
Having secured the Storm Shadow programme, Matra BAe Dynamics' next UK target is the RAF's Future Medium Range Air-to-Air Missile (FMRAAM) - probably more important than the stand-off missile competition.
While that competition was between seven bids of varying credibility, the FMRAAM battle is a straight fight between a Matra BAe Dynamics led-team and Hughes. At stake is the next generation of active radar beyond-visual range missiles for the EF2000, Rafale and Saab JAS39 Gripen, for domestic and export markets.
While it is inconceivable that should Hughes lose, the US Air Force and Navy would look to procure a European AAM, a Matra BAe Dynamics defeat would effectively tie European combat-aircraft manufacturers to a derivative of the Hughes AIM-120 Advanced Medium Range Air-to-Air Missile (AMRAAM) for the foreseeable future.
The Matra BAe Dynamics team for Meteor, as its FMRAAM bid is called, reads like a roll-call of those missile units of companies which could conceivably end up within an enlarged missile house including Alenia, Dasa, GEC-Marconi, and Saab. This, however, is dependent on the Meteor hitting the target initially, otherwise the merger which appears to be a guiding light for the rest of Europe may turn out to be only a flash in the night sky.
Source: Flight International
