As Paris is swept by talk of the prospect of the European defence and aerospace industry consolidation, Tim Ripley spoke to Hughes Europe chairman Robin Beard about the pending merger of Hughes Aircraft into Raytheon and future prospects for transatlantic partnerships. Founded by the reclusive millionaire and aviation pioneer Howard Hughes in 1932, Hughes Electronics is divesting itself of its defence segment and is waiting approval from US regulatory authorities for the final go-ahead.

 

Q How does Hughes view the transatlantic business relationship?

A In the new environment, we want to develop relationships with Europe. For US firms wanting to do business over here, you have to team with a strong ally in European Industry.

 

Q What sort of relationships are you looking for?

A The basic philosophy is I'd rather be a sub-contractor and get 30% of the action than a prime contractor and get 0% of the action.

You see a Matra BAe Dynamics, and possibly DASA, relationship in the missile business. It is important we have discussions with competitors who may not be part of that team. We could possibly work together with them, and bring technology and US market access.

 

Q What is the future of the company's defence arm if it gets the go-ahead?

A The defence segment - Hughes Aircraft Company - will do well. It has a good reputation. After the integration, I am not sure how the end structure inside will look.

 

Q Does this mean the Hughes name will continue to be used?

A At least for the time being.

 

Q How will the civil segment of the business develop?

A Hughes Electronics will be on its own. It has satellites, direct television. There is a world-wide expansion of direct television business - a great deal of activity.

We are strong competitors there. We are the largest manufacturers of satellites; we build more than anyone else.

We're into network systems, telephones, personal computers.

 

Q What have been your main areas of interest at Paris this week?

A Hughes Aircraft Company has been my main focus of activity, because forty per cent of our business currently deals with defence. This is where we talk, explaining specific relationships with our European friends.

 

Q From your experience of consolidation with Hughes, how should Europe proceed?

A Europe must be prepared to take the pain of downsizing.

The more efficient it is, the more competitive it will be and we will not be able to achieve real partnership.

Mergers are great but it has got to mean something. Putting two names together does not mean more efficiency. We are looking for good solid partners.

Source: Flight Daily News

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