Chris Jasper/OXFORD
EADS (European Aeronautic Defence and Space) is in talks with France's Thomson-CSF over a possible defence electronics deal, having identified the field as one into which it wants to expand to counter its high exposure to fluctuations in the civil airliner market.
But Thomson chairman and chief executive Denis Ranque is lukewarm about such a move. He claims he is happy with his company's own positioning following the recent takeover of the UK's Racal, and sees no reason to return to the mˆl‚e of European consolidation.
The civil sector accounts for 76% of EADS' turnover, and the company's co-chief executive, Rainer Hertrich, says its main strategic aim is to address what he admits is an over-reliance on Airbus sales.
"The real issue that we need to address is our smaller ratio of military to commercial sales," he says. "That's partly due to the high Airbus sales growth - but we are also weak in the military area." Hertrich adds that Airbus' steep sales curve and future Eurofighter sales will provide "built-in profitability" and therefore "a breathing space" during which the company will reposition.
Tom Enders, EADS' executive vice-president (VP), defence and civil systems, says the new company (formed from DaimlerChrysler Aerospace, Aerospatiale Matra and CASA) is considering three possibilities in an electronics deal with Thomson: disposals, acquisitions or a joint venture.
Enders hints that while certain EADS operations, such as airborne radars, could be sold off, the main thrust of any move will be to build up defence electronics.
Ranque appears less keen. "I believe we are totally ready for success, but EADS still has some homework to do before entering into this discussion. And in defence electronics Thomson-CSF holds all the power here in Europe."
Mapping out a strategy for repositioning EADS in the global marketplace it now seeks to serve, Hertrich and executive VP, strategic co-ordination, Jean-Louis Gergorin, revealed a range of planned initiatives in addition to defence electronics moves:
EADS plans to secure a firmer foothold in the US. Having lost out to BAE Systems in the bidding for Lockheed Martin's Sanders electronic warfare business in a teaming with L-3, Hertrich says: "We need to get some US buys and we are looking at that now." Last week EADS secured a second joint venture (on a high-altitude, long-endurance UAV) with Northrop Grumman, one of 14 planned technology-based alliances between the two companies. Hertrich lists securing Airbus suppliers/investors in the US as a "top priority", saying the A3XX project will be used "to increase our manufacturing presence there". EADS is prepared to contemplate a merger between its Eurocopter business and the future Agusta Westland, with Gergorin predicting that the European helicopter industry will undergo further consolidation. Plans to jointly market ATR turboprops alongside Embraer regional jets should be sealed by the end of the year (EADS owns part shares in both companies), while Gergorin suggests the evolution of the regional market could cause Airbus to consider initiatives with the Brazilian manufacturer. EADS has also teamed up with Embraer to offer Mirage jets for Brazil's fighter requirement via the part-owned Dassault. EADS plans to establish a presence in the former USSR, with Gergorin saying Antonov may yet be brought into the A400M project, which has defeated its own An-70 in various European bids, and that talks are ongoing with Antonov and other Ukrainian and Russian companies over participation in the A3XX. EADS may position its Astrium space business (a joint venture with BAE) "closer" to that of Lockheed Martin following Boeing's purchase of Hughes Space and Communications. Boeing is al-ready the space market number one, while Lockheed and Astrium rank two and three. The European Military Aircraft Company will be established by the end of the year with Italy's Alenia, which is also due to join Airbus.Source: Flight International
