Europe still has a long way to go to match the strategic power of big US alliances.
Julian Moxon/PARIS
Only an optimistic visionary would have come out of the Paris air show maintaining that the European aerospace industry had begun seriously to re-organise itself. After all, the much-touted Aerospatiale/ Daimler-Benz Aerospace (DASA) missiles/ satellites alliance failed to materialise, as did the missiles accord between Matra and British Aerospace. While the latter seems virtually doomed, however, the former remains very much on the cards. Only political issues (mainly surrounding Germany's interest in taking a stake in the French Helios 2 observation-satellite programme) remain to be settled.
Competition from the US aerospace industry, fresh from its own comprehensive - and rapid - re-organisation, was only too evident at Paris. The newly formed Lockheed Martin, for example, fielded a phalanx of executives at the show said to number more than 200, primed to seek business opportunities in every corner of the industry. The daily flying display, also left no doubt about the health of the US industry - more new aircraft of US origin were seen at Paris, than for the past 20 years.
Against this, the European response seems paltry. This is not least because of the enormous problems, from which US companies are spared, of bringing together enterprises based in different countries, with different legal systems, languages, and corporate structures. It is hardly surprising that US-style strategic mergers are almost unheard of between European companies, alliances more often being based around specific programmes.
It was with a palpable sense of relief, then, that the accord giving Airbus Industrie management of the European Future Large Aircraft (FLA) military transport was signed. "At last, we feel we're part of a visible management structure", says a senior executive from DASA.
Notwithstanding the fact that the FLA deal was signed only at the eleventh hour (after a "problem" over Italy's share in the Airbus Management subsidiary), the deal brings together more European aerospace companies than any other in the history of continental alliances. Alenia of Italy now becomes a member of the military branch of the consortium, and it must be only a matter of time before it becomes a civil shareholder as well.
The agreement between BAe and the Aerospatiale/Alenia ATR consortium, to create the Aero International Regional alliance to support, market and, eventually, develop regional turboprops and jets, ends a long-running effort to consolidate the seriously oversubscribed regional-manufacturing business.
At last (and assuming Brussels gives the green light), there is a shift in the landscape which presages a single Airbus-like European regional-aircraft manufacturer. The involvement of DASA, and its partner Fokker, will, however, remain a dream until the question of co-operation on a 100-seat aircraft, commonly perceived to be the most important regional programme needing development, is solved.
Less apparent, but nevertheless on the cards, is an alliance between the two German engine manufacturers, MTU and BMW. On the face of it, this should be straightforward, the German Government having consistently supported such a move, to save it having to divide badly needed research funding between the two. The move is also popular within the companies, MTU having been created from BMW after the Second World War. There are still some MTU employees who once worked for BMW.
The problem with a marriage between the two centres on the relationship each has with arch-rivals Rolls-Royce and Pratt & Whitney. BMW and Rolls-Royce have created a strong small-engines relationship around the BR700 series, with new products in the pipeline and a healthy order book. MTU has long been associated with P&W, both through the International Aero Engines V2500 consortium and other purely P&W programmes. Fifty per cent of its civil business is with General Electric, however. MTU points out, therefore, that it is well able to cope with different engine programmes under the same roof. "It would be a step-by-step process," says the company, asked about a possible alliance. "But clearly it makes no sense for there to be two German engine manufacturers," it adds.
Another development which emerged at Paris, but which had been coming for some time, was the creation of a single Italian missiles business from the formerly disparate elements of the industry. Alenia president Giorgio Zappa is the first to point out that the move was carried out urgently, "...to prepare the missile industry for alliances". Aerospatiale's missiles division president, Jean-Louis Fache, agrees that there is a need to consolidate. At Paris, he revealed that "...talks have already started" with Alenia, although the alliance with DASA was the "first priority".
Other consolidations in the missile industry, may lead from this although, given national priorities, old feuds and current arguments, (such as the row started by Matra President Noel Forgeard over the Aerospatiale/DASA alliance, in which he asserts that Matra not Aerospatiale should be DASA's partner), will ensure that unity is not an over night phenomenon. Only the next Le Bourget will tell.
Source: Flight International
