SNECMA'S LOSSES MORE than trebled in 1994 as the French engine manufacturer bore the brunt of heavy restructuring costs and new programme costs. Sales are also expected to plummet.
The group finally revealed that it had lost nearly Fr2.2 billion ($440 million) in 1994, confirming earlier projections of a heavy deficit. The result compares with a loss of Fr692 million in 1993.
The size of the deficit reflects efforts by Snecma's new president, Bernard Dufour, to make a clean sweep on the costs of restructuring. Nearly Fr1.8 billion was put aside to cover workforce reductions and continue the policy of short-time working.
Heavy product-development costs were also taken in full on the 1994 accounts, including the setting up of a test bench for the General Electric GE90 turbofan, in which Snecma has a 25% risk-share.
Dufour admits that Snecma had over-expanded, leaving it badly exposed in the current recession. The company had planned to build 2,000 engines in 1994, but only made 600. The bulk of deliveries came from the CFM International venture with GE, with 400 CFM56 engines.
Snecma's overall revenues slipped by nearly 5% in 1994, down to Fr10.4 billion, and the group expects a more dramatic slump in 1995 as sales plunge to only Fr8.8 billion.
A review of the distribution of the locations of some of Snecma's subsidiaries is under way, with the likelihood of plant relocations or even closures. Reports suggest, that the Hispano-Suiza thrust-reverser plant at Bois-Colombes will be closed, while electronics subsidiary Elecma may be integrated into Snecma's Villaroche plant.
Snecma also has to decide about the launch of a new 190kN (43,000lb) engine, although this is likely to be dependent on what has been described as "substantial" state support.
Success in the business-jet market helped Dassault Aviation to push up 1994 group profits by one-third, to reach Fr328 million. Deliveries of Falcon business jets virtually doubled, to reach 45 aircraft. Group sales were down by 5.3% because of weaker defence markets, but are expected to improve in 1996 as Dassault delivers the first of 60 Mirage 2000s to Taiwan.
First deliveries of the Rafale fighter will start in 1997. President Serge Dassault says that 1995 should be "the last of the low years" for sales.
Source: Flight International
