Julian Moxon/PARIS
FEW WOULD DENY that US manufacturers have made most of the running in the race to adapt their aerospace industry to the shrunken markets of the post-Cold War world. Next to the phenomenal speed with which the USA's manufacturing industry has cut itself down, the efforts of European companies to reshape seem paltry.
Or do they? While it has admittedly taken longer - five years instead of the two or three, which have been typical in the USA - France's biggest avionics manufacturer, Sextant Avionique, has managed to pull off what senior vice-president, civil business, Jean-Paul Lepeytre unabashedly calls a "profound" regrouping and restructuring operation, "...which has left us slimmer, stronger and much better able to live with the intense competition out there".
The avionics units of French aerospace giants Thomson-CSF and Aerospatiale were merged in 1989 to form Sextant. "This in itself was a major restructuring move," says Lepeytre. "It was a sign that there was a need for a re-organisation of the electronics industry in France. We knew then that we had to adapt very fast to the way the market was evolving."
Since then, the equivalent of seven companies has been regrouped, the 30 sites which each company had in operation have been reduced to ten and the combined workforce has been cut by 30% - no mean feat for a pair of state-owned manufacturers in a country with highly restrictive labour laws.
All this has taken place against the same background of global market decline, which has affected avionics companies worldwide. "In 1990, the civil market was supplying the needs of 700 new aircraft with 100 seats or more per year. Now it is less than 400," says Lepeytre, who points out that one of Sextant's primary customers, Airbus Industrie, has seen average annual sales decline from 150 to 120 aircraft. The military market, which now accounts for half of Sextant's sales (down from 60% five years ago), has fared no better, shrinking by one-third, according to Sextant senior vice-president, military, Guy Baruchel. The evidence is in the figures - the company's sales in 1995, at Fr4.9 billion ($885 million), were at virtually the same level as those for 1994.
MARKETING CHANGE
Adjusting to the change meant a complete revision of marketing strategy. In 1990, Sextant was in the habit of advertising itself as a "high-technology" company, supplying much of the avionics for the Airbus range, and constantly developing new products, such as its airliner head-up display and satellite-based navigation and landing system.
This remains true. The priority has now changed, however, to reflect the demand for better customer service. "We began investing heavily in customer support, because we were aware that this was imperative if we were to develop a worldwide customer base," says Lepeytre. Service centres were opened in Miami, Florida, in 1992 and in Singapore two years later, along with an office in Beijing in 1995, "...to give us our first permanent presence in China, to support Airbus sales and to promote our products", he adds. The company also built an international logistics centre in 1993 just outside Paris. "Taken together, about 25% of our total investment in the last four years has been in customer support," says Lepeytre.
The military business has followed a similar strategy, although the nature of the activity demanded different actions. "We concentrated on things like reducing reaction and repair time and on improving distribution," says Baruchel.
The remaining operational centres were also re-organised to give each a more clearly defined role, supporting a particular technology, or function. So, for example, the Bordeaux site now concentrates on development of man-machine interfaces, such as head-up and head-down displays, while Velizy takes care of flight systems, Valence of navigation products and Chatellrault laser gyros.
"We had now dealt with two areas of our development: restructuring and customer support," says strategy director Gerard Delalande. "The next stage was to evolve the way we offered our products from providing discrete systems, such as computers, navigation and visualisation equipment, to supplying complete systems, if possible under a risk-sharing arrangement."
Airbus, Dassault and Eurocopter represent about 80% of Sextant's sales today "...and they will remain our main clients", says Delalande. Efforts will be concentrated on increasing business from the remaining 20%, however. "By the year 2000, that figure will be doubled. It is not a hope, but a certainty," he adds.
COMPETITION SUCCESS
His confidence results from the company's success in winning several competitions, but which have yet to result in major earnings. Sextant's selection as risk-sharing supplier of the flight-control system for the Bombardier Global Express, and the avionics for the Bombardier de Havilland Dash-8 Series 400 are the most prominent recent examples. Other contracts include the avionics for the Russian MiG-AT trainer, and for the South African Denel Rooivalk attack helicopter and, with Thomson, the upgrading of the avionics for Spanish Dassault Mirage F1 fighters.
The arrival of global satellite navigation has provided another opportunity, mainly through the Thomfans alliance between Sextant and Thomson-CSF under which, each supplies airborne and ground equipment for communications, navigation and surveillance/air-traffic management applications. The selection of Thomson subsidiary Wilcox Electric as prime contractor for the US wide-area augmentation system (WAAS) is not in itself likely to yield much business for Sextant, "...but at least it allows us to be present", says Lepeytre..
In Europe, Thomson stands to win prime contractorship for virtually the entire satellite navigation-augmentation system, which will enable aircraft flying over European airspace to make full use of US global-positioning-system (GPS) navigation satellites. Sextant has already tested successfully the GPS receivers which will be needed for the WAAS, and has carried out extensive worldwide tests of its GPS-based automatic-landing system aboard an Airbus A340.
"In 1990, the business we did was mainly based on contracts from within France," says Lepeytre, adding that "...today, we have new business in North America and South Africa, and tomorrow it will be Asia". The increasing activities of Airbus, Sextant's involvement in the Eurocopter EC 120 and in the development of space systems are "...helping to establish a real presence in Asia", Lepeytre says.
Source: Flight International
