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EUROPEAN RESTRUCTURING OR TRANSATLANTIC COOPERATION?

European restructuring or transatlantic co-operation? This is the question the aerospace community has to face after the British merger. Following the marriage of British Aerospace with GEC's defence division Marconi the situation concerning the integration of the European aerospace industries has proved to be more difficult than ever. After being crudely left out, DaimlerChrysler Aerospace (Dasa) claims that the chance of sharing equal rights has vanished forever. The French have allegedly discovered a certain nationalistic attitude in the British position, similar to a kind of fortress mentality. The French did not have too much trouble to discover this perspective, since it equals their own rather astonishingly.

At the occasion of the 50th anniversary of NATO european politicians used to talk of doing away with this somehow fortified mentality on both sides of the Atlantic. Yet, they suddenly have to face this phenomenon in their own yard now.

Therefore the question who actually is shaping today's economic policies, businessmen or politicians, has been answered pretty impressively. If companies' profits are involved, any friendship no matter how far politically motivated it may be, is simply overruled.

BAe's main reasons are not feelings of nationality, and GEC does not want to merely protect British interests either. Instead, the prime focus lies on the expansion of the companies' positions in international competition. Therefore BAe wanted to let competitors like France's Thomson-CSF and Lockheed Martin from the USA stand out in the cold while GEC wanted to sell off its branch of business as expensively as possible. Not only Dasa holds the opinion that BAe paid a price much too high, approximately 23 billion German Marks. But the merger resulted not from a wrongly understood patriotism but was reasonably created by the intention to gain the largest market potential possible in times of dwindling military budgets, all in order to continue to be able to pay dividends to the shareholders.

The possibility that the merger was initiated to compensate the possible failing of the oil-for-weapons deal with Saudi Arabia (Al Yamamah) is another tale. But even if this would turn out to be true, one single thought would have been a the top of the list for BAe : shareholder value.

The shareholder value appears to be safe for BAe shareholders, but time will tell whether GEC shareholders, who have become owners of the "new BAe" with their 36,7 percent share, will be happy to the same extent if Al Yamamah should fail.

But be it as it may. BAe has climbed the ladder of success and now ranks third largest aerospace company in the world after Boeing and Lockheed Martin and thus clearly dominates Europe.

This fact makes it impossible for France to lag behind. Very quickly Aerospatiale was made the fifth largest aerospace enterprise in the world, at least according to own releases, by merging it with Matra Hautes Technologies, a part of the Lagardère group. The fact that the privatisation ends at a government share of 46 percent appears to be negligible to the French. Experts noted that this time far to less money was paid than it would have been appropriate. But that happens to be the way if politics do business.

And Dasa? Recent events in France were only commented on by indicating the own company's private structure. Therefore, insiders value a return of the Germans to the negotiations table with BAe more likely than an acceptance of a potentially French dominated Franco-German alliance. But if there were apparently unsolvable disputes with the "small BAe" on the positions in the board of directors and on what equal opportunities really meant then an agreement under present conditions appears even less likely.

In the end, does Dasa finally have to play the American card given by its Chrysler connection? The Germans recently founded a military venture in Unterschleißheim in Bavaria together with the Lockheed corporation. During the last decade the United States' military budget has shrinked by 67 percent. Every European company that offers an entry into the market to US-enterprises is seen as an attractive party.

Has the restructuring process of the European aerospace industry ended before it even had a chance to begin?

Maybe the whole thing is not about a European solution, maybe the name of the game is globalisation. Concerning this development's consequences regarding the Airbus partnership, the popular saying "to do one thing does not mean to leave the other" is more than true.

From page 4 of FLUG REVUE 4/99