THE FRENCH AEROSPACE industry may see little cause to thank defence minister Charles Millon for proposals to make swingeing cuts in the country's military spending.
Yet if the budget cuts at last succeed in provoking the industry into a long-overdue bout of restructuring, then Millon will have done more good than harm both for the French defence sector and for the wider cause of European aerospace integration.
In fact, Millon's proposals do no more than face up to the harsh realities already confronted by almost every other Western Defence industry around the world - witness the savage round of rationalisation which has taken place in the US and UK industries following the end of the Cold War.
French attempts to shield its own military industrial base was never a viable long-term strategy. The delay may have its political attractions in avoiding painful job cuts and plant closures, but it also has its price. While other industries have been forced to become leaner and fitter to survive, France has done relatively little by way of rationalisation. It now faces a race to catch up.
True, much of the French industry has made some attempts to tackle over-manning through short-time working and temporary layoffs, but this falls far short of the drastic permanent job cuts made in other industries.
The strategy appears to have been to keep capabilities in place ready to take advantage of better times ahead. The truth is that there is little prospect of a major upturn and that, even if markets do eventually begin to recover much of the capacity and the workforce will not be needed.
What is needed is a drive for new levels of efficiency and productivity which seems to sit ill alongside a religious commitment to guaranteeing long-term stability for the workforce.
Where attempts have been made to cut jobs, they have too often become bogged down in tortuous and inconclusive discussions with unions, in an attempt to avoid damaging strikes.
Millon himself criticised Aerospatiale's recent proposals for up to 3,000 job cuts as being "...merely information presented to the unions" and not part of a genuine restructuring plan.
Efforts to consolidate into a smaller number of larger and more focused operations have also fallen foul of political infighting in what is still a largely state-owned industry.
The underlying problem is that, while the French Government was prepared to continue to support the status quo by maintaining military budgets, there has been little incentive for industry to take painful decisions. Now it seems that the Government may be about to provide that incentive.
The extent of the new realism now spreading through the Government is revealed in the report prepared for the parliamentary debate on the defence budget, which preceded Millon's budget announcements. With refreshing disregard for traditional wisdoms, it foreshadows what amounts to a total and rapid remaking of the defence industry.
The report criticises the pursuit of too many costly programmes at the expense of industrial efficiency. Even once-hallowed programmes, such as the Dassault Rafale fighter, appear now to be under threat. It also acknowledges the possibility that some of the industry may disappear altogether, previously a taboo subject.
Perhaps most encouraging is a clear recognition that France, in common with every other nation in Europe, is no longer capable of maintaining an independent national capability, but needs to work towards integration on a European scale.
Politicians in the UK and Germany have already begun to signal a new preparedness to end national duplications by pushing their industries towards genuine European structures. The emergence of a slimmer, fitter and less nationally minded French industry can only help.
Millon and the French Government will no doubt come under intense pressure to modify the sharpness of their proposed revolution as the debate goes on over the next few months. If they want to create a strong defence industry in France and Europe they should stick to their guns.
Source: Flight International
