Julian Moxon and Gilbert Sedbon/PARIS
THE FRENCH Government has taken its first steps towards pushing through sweeping changes in the structure of the aerospace and defence industries, including the merger of Aerospatiale and Dassault Aviation.
The moves, many of them announced by President Jacques Chirac on French television on 22 February, centre on a total restructuring of the defence industry, elimination of the ground-based nuclear deterrent and the creation of a professional army in place of the conscription-based force.
The Government made it clear earlier in the week that it wanted France's two largest aircraft manufacturers, Aerospatiale and Dassault, to merge, and announced the creation of a steering committee charged with creating a single group within two years. The committee has been told to report by June on how to achieve this.
Together, Aerospatiale and Dassault would command a place in the league of the world's top ten aerospace companies, with a turnover approaching $11 billion. The product line would run from business jets and fighters built by Dassault to helicopters, missiles, space and civil-aircraft programmes related to Airbus and Aero International (Regional) contributed by Aerospatiale.
Chirac says that restructuring would improve the competitiveness of France's defence industry, making it "at least the second best" in the world.
The President has not confirmed fears of significant delays in the Dassault Rafale fighter programme, and promises that the Eurocopter Tiger attack and NH Industries NH 90 transport-helicopter programmes would be preserved. Sources close to Dassault, have said however, that they expect the production start-up for marine versions of the Rafale, will be pushed back by at least 30 months to the end of 2000, while that of the air force version, will be delayed by three and a half years, to the end of 2005.
Defence procurement for 1996 has been cut officially by around 10%, to Fr95 billion ($19 billion), but industry executives say that in reality this is likely to become a cut of up to 25%.
Part of this will come from the closure of the Plateau d'Albion land-based nuclear-missile sites and the termination of the Hades short-range missile programme. The greatest savings will result from the reduction in the size of the army, from 500,000 to 350,000 by 2001. Chirac has restated France's commitment to the multi-national Eurocorps.
The Government hopes that its attempts to force Aerospatiale and Dassault together, coupled with its intended privatisation of Thomson SA, will kick-off the rationalisation of the French aerospace industry. How this will occur in practice remains unclear, since there are considerable obstacles to bringing the privately owned Dassault into an alliance with state-owned, indebted Aerospatiale.
Two previous attempts to merge the two have failed, and Dassault, a profitable company, has already forged a potentially significant alliance with British Aerospace on fighter-aircraft development.
Aerospatiale has recently strengthened its ties with Daimler-Benz Aerospace in missiles and satellites, adding to the existing Eurocopter helicopter alliance, and is in the middle of a successful restructuring programme directed by its president, Louis Gallois.
See Business, P16
Source: Flight International
