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On the Record with
JEAN-PAUL BECHAT, CHAIRMAN & CEO, SNECMA GROUP

European industry must ban "juste retour" programs, where workshare is based on a country's investment, if it wants to be competitive and cost-effective.


"Yes, I would want to buy MTU if it is for sale! But their shareholder (DaimlerChrysler) would have to be convinced."

So says Jean-Paul Bechat, chairman & CEO of the world's fourth largest aero-engine group Snecma of fifth-ranking MTU.

Bechat has been saying that for more than a year, during which time Snecma appears to be no closer to being privatized by the French government (which would greatly help it embark on the acquisition trail) and there has been no hint that MTU might be put on the block.

Nevertheless, he is convinced that Europe's aero engine business will consolidate later, if not sooner, and that Snecma will play major role.

"If we want to participate it will be to buy companies or to merge with companies. To do that Snecma needs to be able to find funds or capital in the financial market or welcome new shareholders," Bechat says.

Bechat claims he has no say in privatization. "I am just here to manage the company," he notes with an apparently studied understatement of his role.

"My opinion is clear: I will be delighted to be able to pursue Snecma's co-development. Our previous mergers have been successful and improved our results year after year. But it is up to the owner (the French government) to decide."

Last year Snecma bought the Labinal group for its aerospace equipment and Turbomeca helicopter engine businesses, and also added nacelle manufacturer Hurel-Dubois.

The GE-Honeywell merger, whatever the outcome at the EU Commission, will leave the U.S. with just two engine manufacturers as Honeywell engines are either absorbed or divested, Bechat points out. "In Europe we still have six independent engine companies: Snecma, Rolls-Royce, MTU, FiatAvio, Volvo Aero and ITP of Spain.

"Six is a little too many. Consolidation will happen," he predicts.

"Everyone is interested in seeing industry in a new suit."
-- J.M.

That's the opinion of Snecma Group chairman and CEO Jean-Paul Bechat, who considers the practice inefficient and wasteful.

"We must stop it, even-or especially-in space programs," he told Show News.

Bechat says such multinational programs as the TP400 turboprop for the A400M European transport can be just as cost effective as single-company ventures-and, indeed, that this one will be.

"We have made an offer to Airbus military for a common European engine program that is competitive with the competition in its early stages," he says. "Airbus already knows the commercial costs from that early stage, when there were three bidders (Pratt & Whitney, Rolls-Royce and multinational team of Snecma, MTU and FiatAvio).

"Airbus has attained its cost target," Bechat says.

The TP400, he adds, will be designed to cost with modules assigned to companies on the basis of their expertise.

"We have very good examples of how partnerships can provide a good, successful product," he says. Snecma owns 50% of CFM International, which makes the world's best-selling CFM56; and Rolls-Royce and MTU already collaborate commercially on the V2500 turbofan.

In contrast, these consortia are very expensive if structured with percentages determined by market share. "In those cases companies see money available and the chance to develop technology. Very often each partner chooses the module or subassembly he has never done before in order to make his technical progress.

"But the TP400 is not structured like that," Bechat says. "From the beginning the assumptions will be made that this is a commercial program, using existing technologies, and will be shared according to the technical knowledge of the partners. Those assumptions are very clear, and I am very optimistic."

The three-shaft TP400 will be most powerful turboprop engine ever built in the West. Participating companies are Snecma, Rolls-Royce, MTU, FiatAvio, ITP of Spain (in which Rolls-Royce holds a 46.8% share), and Techspace Aero of Belgium (of which Snecma owns 51%).

Bechat says he's always been an advocate of having just one engine for the A400M. "This is a good solution for a common European program," he says.

By John Morris

   
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