The French aerospace and defence industry faces difficulties because of the weakness of the dollar, according to Philippe Camus, president of industry association Gifas. The current euro/dollar exchange rate of around $1.30 is "unacceptable", Camus told the association's annual conference in Paris, adding: "We have entered the danger zone."
Camus called for increased support for small- and medium-sized companies, given the difficulties posed by the weak dollar: "The state will have to rally round by providing financial support and encouraging a national effort in favour of innovation."
Further outsourcing of production from western Europe is inevitable if the dollar remains weak, he added. "Manufacturers themselves are making enormous efforts – taking steps to reduce costs, innovate, streamline, be particularly incisive as regards exports and do their utmost to protect the integrity of procurement chains between main contractors and suppliers." Camus also called for further support from the French state in the field of research and development.
The industry saw "a satisfying year in a difficult environment", in 2004, according to Camus. Turnover in the aerospace and defence, defence electronics and security sectors grew 3.2% in 2004 to €26.3 billion ($34.1 billion). Gifas arrives at its estimation through a survey of 90% of the French aerospace and defence sector. The industry's order book rose to €38 billion, with 75% of orders for export, their highest ever level.
The civil sector saw a 6.9% increase in orders, accounting for 67% of the year's total, while military orders fell by 3.9% to account for 33%.
Turnover is expected to grow "by a few percent" in 2005, and "activities should continue to increase...globally the industry will need more capacity", according to Camus. But he added that double-digit growth is unlikely.
HELEN MASSY-BERESFORD/PARIS
Source: Flight International
