Ramon Lopez/WASHINGTON DC Chris Jasper/LONDON

The US Department of Defense (DoD) says it needs more time to establish a new policy on transatlantic defence mergers. Deputy defence secretary John Hamre warns that it is "probably premature" to expect any major deals, despite merger pressures coming from Europe.

Europe's aerospace ministers have met in Rome, meanwhile, to accelerate the consolidation of the continent's aerospace sector. But sources say the evolving division of the European industry into two camps has changed the emphasis of discussions.

Hamre says that the USA needs more time to formulate a new approach. He adds that, although globalisation is a force with which the Pentagon must learn to live, transatlantic co-operation in the immediate future is likely to be limited to "partnerships, joint ventures and financing agreements" falling short of major mergers.

Hamre suggests that Europe needs to go through "the same digestive process" seen in the USA in recent years, and that the Pentagon must at the same time do a better job of defining policy on security-sensitive defence issues.

"He's not saying we're talking about years," says the DoD, "but, in fact, no-one knows what we're talking about." A US Defense Science Board study which is due to form the basis of Pentagon policy is still being written.

UK manufacturers, led by British Aerospace, are particularly keen to conclude transatlantic deals, with the announced merger of Aerospatiale Matra and DaimlerChrysler Aerospace likely to increase these merger pressures. The European Aeronautics, Defence and Space company (EADS) deal has in turn moved the goal posts of European consolidation, all but ruling out the formation of a single European aerospace giant.

That reality, according to government sources, was acknowledged at a recent meeting of ministers from France, Germany, Italy, Spain, Sweden and the UK, although the six were also buoyed by sectoral consolidation in missiles, space and defence electronics, as well as the clearer road to Airbus reorganisation.

The Rome meeting is also understood to have discussed European fighter manufacture, which was further complicated by the EADS deal.

Source: Flight International