Wings and a prayer for Europe's defence

As the world's aerospace executives flock to Paris for the biennial air show extravaganza next weekend, the mood is largely upbeat as orders for new passenger aircraft flow in.

But the Europeans are uneasy. Airbus Industrie, still struggling to restructure, watches fearfully as arch-rival Boeing forges a merger with McDonnell Douglas that could plunge it - and Europe's defence industry - into deep trouble.

It's not Boeing alone that worries Europe. US aerospace companies have been through a series of mergers that reshaped the sector, creating arms and aircraft behemoths that dwarf European rivals. They are plundering military markets in regions such as South-east Asia and the Middle East where Europeans once dominated.

European industry leaders know they must respond. Scarcely a week passes without British Aerospace chairman Sir Richard Evans or Daimler-Benz Aerospace's Manfred Bischof stressing the need to build similar giants in Europe.

But political jealousies have made progress tortuous. No nation wants its defence companies controlled by another's, and governments have done little to co-ordinate procurement.

The key to reshaping Europe's industry is the four-member Airbus consortium. These companies - Aerospatiale, Daimler-Benz Aerospace, British Aerospace and Casa of Spain - have until now combined forces only for commercial aircraft. But industry officials say that transforming the partnership into a free-standing corporation will also be crucial in redefining Europe's military industry.

In January Airbus said they would transform their partnership into a free-standing corporation by 1999. By introducing a single management structure the group would cut costs and improve efficiency.

On Friday in Nice, France, Aerospatiale chairman Yves Michot said the group scrapped a key feature of the revamp by ending plans to transfer factories and other assets into the new group. That will water down the ability to control costs.

Even so, the restructuring is no longer limited to civil planes. Mr Michot said Aerospatiale persuaded its British and German partners that the talks should include work on a separate arm to manage both military and civil programmes.

Aerospatiale's "crown jewel" is its commercial aircraft design facilities, says the company's treasurer, Francois Auque. And the French company is loathe to separate that from its core operations, moving it into the new Airbus, unless the British place their "crown jewel - their combat planes," into the new grouping as well, said Mr Auque.

Any regrouping will be made more difficult by the Socialist election victory in France, which threatens both a planned merger between Aerospatiale and Dassault Aviation and the privatisation of Thomson-CSF.

In the past, the Socialists have opposed privatising defence companies. That may mean that the long-awaited sale of the government's majority stake in Thomson-CSF, Europe's largest defence electronics maker, is again put off. The sale was to be the keystone for a consolidation of Europe's defence electronics and missiles sector.

The merger of Aerospatiale, maker of civil planes, helicopters, rocket launchers, satellites and missiles, with Dassault, which makes military fighters, appears threatened as well.

The new Socialist government will make its intentions known when Prime Minister Lionel Jospin delivers a speech on his government's aerospace policy platform on 21 June at the end of the Paris show.

Many in the industry believe that Europe's aerospace industry is now so clearly threatened by its rivals from the United States that matters will have to move quickly.

Start your day with The Independent, sign up for daily news emails
ebooksA special investigation by Andy McSmith
Approved Food sell products past their sell-by dates at discounted prices
Jonny Evans and Papiss Cisse come together
Life-changing: Simone de Beauvoir in 1947, two years before she wrote 'The Second Sex', credited as the starting point of second wave feminism
peopleHer seminal feminist polemic, The Second Sex, has been published in short-form to mark International Women's Day
Arts and Entertainment
The beat is on: Alfred Doda, Gjevat Kelmendi and Orli Shuka in ‘Hyena’
filmReview: Hyena takes corruption and sleaziness to a truly epic level
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Evening Administrator

£8 per hour: Recruitment Genius: This Pension Specialist was established early...

Guru Careers: Executive Assistant / PA

£30 - 35k + Bonus & Benefits: Guru Careers: We are seeking an Executive Assist...

Ashdown Group: Graduate Application Support Analyst

£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...

Reach Volunteering: External Finance Trustee Needed!

Voluntary post, reasonable expenses reimbursed: Reach Volunteering: Would you ...

Day In a Page

Homeless Veterans campaign: Donations hit record-breaking £1m target after £300,000 gift from Lloyds Bank

Homeless Veterans campaign

Donations hit record-breaking £1m target after huge gift from Lloyds Bank
Flight MH370 a year on: Lost without a trace – but the search goes on

Lost without a trace

But, a year on, the search continues for Flight MH370
Germany's spymasters left red-faced after thieves break into brand new secret service HQ and steal taps

Germany's spy HQ springs a leak

Thieves break into new €1.5bn complex... to steal taps
International Women's Day 2015: Celebrating the whirlwind wit of Simone de Beauvoir

Whirlwind wit of Simone de Beauvoir

Simone de Beauvoir's seminal feminist polemic, 'The Second Sex', has been published in short-form for International Women's Day
Mark Zuckerberg’s hiring policy might suit him – but it wouldn’t work for me

Mark Zuckerberg’s hiring policy might suit him – but it wouldn’t work for me

Why would I want to employ someone I’d be happy to have as my boss, asks Simon Kelner
Confessions of a planespotter: With three Britons under arrest in the UAE, the perils have never been more apparent

Confessions of a planespotter

With three Britons under arrest in the UAE, the perils have never been more apparent. Sam Masters explains the appeal
Russia's gulag museum 'makes no mention' of Stalin's atrocities

Russia's gulag museum

Ministry of Culture-run site 'makes no mention' of Stalin's atrocities
The big fresh food con: Alarming truth behind the chocolate muffin that won't decay

The big fresh food con

Joanna Blythman reveals the alarming truth behind the chocolate muffin that won't decay
Virginia Ironside was my landlady: What is it like to live with an agony aunt on call 24/7?

Virginia Ironside was my landlady

Tim Willis reveals what it's like to live with an agony aunt on call 24/7
Paris Fashion Week 2015: The wit and wisdom of Manish Arora's exercise in high camp

Paris Fashion Week 2015

The wit and wisdom of Manish Arora's exercise in high camp
8 best workout DVDs

8 best workout DVDs

If your 'New Year new you' regime hasn’t lasted beyond February, why not try working out from home?
Miguel Layun interview: From the Azteca to Vicarage Road with a million followers

From the Azteca to Vicarage Road with a million followers

Miguel Layun is a star in Mexico where he was criticised for leaving to join Watford. But he says he sees the bigger picture
Frank Warren column: Amir Khan ready to meet winner of Floyd Mayweather v Manny Pacquiao

Khan ready to meet winner of Mayweather v Pacquiao

The Bolton fighter is unlikely to take on Kell Brook with two superstar opponents on the horizon, says Frank Warren
War with Isis: Iraq's government fights to win back Tikrit from militants - but then what?

Baghdad fights to win back Tikrit from Isis – but then what?

Patrick Cockburn reports from Kirkuk on a conflict which sectarianism has made intractable
Living with Alzheimer's: What is it really like to be diagnosed with early-onset dementia?

What is it like to live with Alzheimer's?

Depicting early-onset Alzheimer's, the film 'Still Alice' had a profound effect on Joy Watson, who lives with the illness. She tells Kate Hilpern how she's coped with the diagnosis