Andrew Doyle/MUNICH
Germany's DaimlerChrysler has declared that the European dream of creating a single aerospace and defence company out of the continent's disparate national manufacturers is dead. It says that its aerospace division (Dasa) will instead pursue a deal with Spain's CASA and a possible transatlantic tie-up.
DaimlerChrysler chairman Juergen Schrempp blames UK and French domestic consolidation for killing off plans for a European Aerospace and Defence Company (EADC), but says he remains committed to expanding Dasa.
Fellow German automotive giant BMW has also reaffirmed its commitment to the aerospace sector via its BMW-Rolls Royce joint venture, which it says is set to break even by 2002.
Unveiling DaimlerChrysler's group financial results for last year, Schrempp said: "The dream is over for the EADC."
He hinted at lingering bitterness over the collapse of Dasa's planned merger with British Aerospace, foiled by the UK company's tie-up with GEC-Marconi, and dismissed any possibility of a deal with Aerospatiale while the French company - poised to absorb Matra Hautes Technologies - remains under partial state ownership.
Schrempp adds that Dasa is "evaluating its options" for mergers or acquisitions. He stresses that these include transatlantic permutations.
Meanwhile, Dasa has confirmed that it will bid for a stake in CASA, a move almost certain to put it in competition with BAe and other major companies. CASA is a small but significant player, holding a 4.2% stake in the Airbus consortium and participating as a full partner in the Eurofighter programme.
Dasa more than doubled its operating profit in 1998, to DM1.22 billion ($668 million) from DM555 million a year-earlier. Net income for last year was DM1.1 billion.
BMW R-R has also reported improved financials, causing its parent company to predict break-even by 2002. The corporate and regional jet-engine manufacturer reduced its annual loss to DM458 million last year from DM662 million in 1997. Turnover in 1998 was up by 38% to DM723 million.
BMWfinance director Helmut Panke says the venture's result is especially encouraging since the DM500 million spent on research and capital depreciation was "higher than the negative bottom line", so that it made a gross profit on each engine sold.
BMW and R-R are discussing the future role of the joint project within the UK company's product portfolio, with options under examination including the extension of the 14,000-23,000lb-thrust (60-100kN) range and additional risk-sharing partnerships in other engine programmes.
Source: Flight International
