Andrew Doyle/MUNICH
MTU, Volvo Aero and FiatAvio are discussing a tie-up that could lead to the creation of a aero-engine concern rivalling Snecma for second spot behind Rolls-Royce in the European engine makers' league.
The talks are at a preliminary stage. MTU says no decisions have been taken over the structure of a deal. "We know all three parties are interested in principle, but have not discussed what a final agreement would look like," he says.
A strategic partnership could clear the way for DaimlerChrysler to reduce or eliminate its holding in Munich-based MTU to concentrate on automotive activities.
Outgoing MTU chief executive Rainer Hertrich, appointed co-chief executive of soon-to-be-formed European Aeronautic, Defense and Space (EADS), says "all of the alternatives" are being looked at as part of the talks.
MTU, a subsidiary of DaimlerChrysler Aerospace (Dasa), will become a standalone unit of parent DaimlerChrysler after Dasa merges with Aerospatiale Matra and CASA to form EADS. Hertrich says while Dasa has not revealed any plans to dispose of the engine company, "they would like to reduce their stake in MTU and this could be a way of fulfilling their wishes".
Consolidation among Europe's fragmented second-tier engine manufacturers has been slow, due in part to the complex web of programme partnerships with the "big three": General Electric, Pratt &Whitney and R-R.
MTU is a risk-sharing partner in P&W's civil engine programmes, the International Aero Engines V2500 and the Eurojet EJ200 which powers the Eurofighter. It is also one of the world's largest independent providers of maintenance, repair and overhaul (MRO)services.
Volvo Aero manufactures the Saab Gripen's RM-12 engine, based on the GE F-404 and has an extensive MRO business. FiatAvio is a partner in the EJ200, a subcontractor on the V2500 and is developing the gearbox for P&W's PW8000 geared-fan engine.
Source: Flight International
