ThalesRaytheon Systems JV Announced

Touted as a "new era in trans-Atlantic relationships," Thales' chairman Denis Ranque and Raytheon chairman Daniel Burham announced Monday that the two firms have created ThalesRaytheon Systems, a new 50:50 joint-venture that will compete for air threat detection and command/control/communication system contracts.

Thales' Reynald Seznec is chairman and Raytheon's Phillip George is CEO of Messy-based TRS, which officially began operations on June 1, 2001. TRS, with annual sales of $600-million, has 1,300 employees in two subsidiaries, one in Paris and one in Fullerton, California.

"Together, we are invincible in air defense, C3 and ground-based radar systems," Burham said. "This joint-venture is good for our companies, our countries and transatlantic co-operation," he explained. "I've never seen anything in such perfect alignment," Burham added.

"As we say in French, this is 'en premier', the very first time for a transatlantic [joint] venture to build a perfectly balanced venture," Ranque said. "We are in an unrivaled position," he continued. "We're looking forward to $1 billion in revenues, thanks to our large order book."

TRS was formed for four reasons, according to Ranque. Air defense threats that cross borders create the need for new approaches to global security and better inoperability between armed forces. Defense contractors need to look ahead for new technologies, well in advance of today's government requirements. The business model needs to be changed in response to new requirements. TRS wants to be a "good citizen" in both the U.S. and Europe so that it can operate under a common security agreement.

TRS, however, isn't going to tread on Thales' and Raytheon's "legacy" programs, such as surface-to-air missiles systems. TRS' focus will be on strategic air defense radars and command/control, not weapons systems.

"This is not a product joint venture," Ranque explained. While Thales and Raytheon are complete partners in TRS, they'll remain fierce competitors in other areas.