Julian Moxon/MADRID
For a 75-year-old national aerospace company on the verge of being sold to one of four European suitors, it would seem reasonable to assume that the atmosphere is one of uncertainty.
Yet, to visit CASA's headquarters in Madrid is to see the opposite. There is no hint of gloom, despite the inevitable change of direction that will come when the bidding is over and the company has passed into French, German, Italian or UK ownership.
CASA chairman Alberto Fernandez (left) explains: "Our view is that a company with a solid business strategy and good financial performance does not need to change when there is a change of ownership. We believe that, as long as you perform well, you should be allowed to go on as you did before."
The figures speak for themselves. Last year, CASA hit a profits high of Ptas7.7 billion ($49.9 million), a 20% increase on 1997, while sales went up by 8.3%, to Ptas167.7 billion. Orders stood at Ptas270 billion, with a Ptas553.7 billion backlog (Flight International, 14-20 April). "We have $500 million of cash, our profit is 8% of sales and we're generating money," says Fernandez. CASA will make "a lovely bride" for its new owner, he believes. "Our target is to increase sales to Ptas 260 billion by 2002."
The good health is the result of a "positive strategy of growth, coupled with the development and application of new technologies" since Fernandez took over the chairmanship in September 1996 after a 26-year career with CASA, the last eight as senior vice-president of finance and purchasing at the Airbus Industrie consortium.
Today, CASA's portfolio includes its long-standing core activity in light/medium military transports, in which it claims world leadership. The company has spent around Ptas30 billion developing the C-295, are-engined, stretched derivative of the CN-235. The first production example flew in December and the orderbook is soon to be opened with an expected order for nine from the Spanish air force. The C-295 and CN-235 are chasing a market estimated at about 300 aircraft over the next 10 years. "We expect to take at least 60% of that," says Fernandez.
CASA is also a 13% partner in the seven-nation A400M military airlifter, having campaigned successfully to carry out final assembly at its Seville plant. While Fernandez is optimistic that the programme will go ahead, "one thing is certain - the prospects of the workshares staying as they are today are zero".
Apart from "four difficult years" in the late 1980s and early 1990s, CASA has been profitable, the company claims. During that time, it saw its cash resources dwindle to virtually nil. A drastic restructuring plan was put into effect, which included Ptas47 billion of government recapitalisation and reducing the workforce from 11,000 to 7,400. "We also benefited from the improved dollar exchange rate and the strong increase of Airbus sales," says Fernandez.
Further success has come from development of the mission systems business, mainly in maritime patrol and surveillance, and aerostructures, where the company's carbonfibre expertise is considered a key capability. "We plan to boost all these business areas substantially over the next few years," says Fernandez.
Space is another growing business sector - "one of our jewels" - with sales worth Ptas14 billion last year, 93% of which is exported. The Spanish company also has a 13% stake in the Eurofighter consortium, where it leads the structural team, again contributing its experience with carbonfibres.
The sale of CASA "is just another component of European restructuring", says Fernandez. Restructuring never was going to take the form of a "big bang", but rather "a very fast evolution which will continue for years to come. No-one can predict what form it will take. After all who could have predicted the British Aerospace/ GEC-Marconi and Aerospatiale/ Matra mergers a year ago?"
CASA, with a 4.2% share of Airbus work, will hold a stake in the Airbus Single Corporate Entity (SCE). "We want to keep a minimum of 4.2% in the SCE," says Fernandez. "Airbus is the wonder programme of Europe and everyone wants to be on board."
Although the SCE shareholders will give up their rights as suppliers, Fernandez believes the hard-won specialisations of each of the major shareholders should be retained, so that CASA, for example, will continue to manufacture horizontal tailplanes.
"There is tremendous competition within Airbus to capture work and cut costs, and Airbus keeps lowering the bar to keep it competitive," he says. CASA is producing its fourth generation of horizontal tailplane. "That's about one [generation] every four years, which means we have more specialisation in that area than any other company. Specialisation is Airbus' greatest asset and it should be kept at all costs," Fernandez suggests.
Privatisation by government shareholder SEPI, believes Fernandez, will take place "before the end of the year". He has no thoughts as to his preferred owner.
"We work on major programmes with all four companies and we have a good relationship with all of them. We consider that we will gain, not lose, through privatisation."
Source: Flight International
