On the Record with Dr. KLAUS STEFFENS, PRESIDENT & CEO, MTU
It would be simplistic to assume that DaimlerChrysler has hung
a 'For Sale' sign on its MTU subsidiary, says Dr. Klaus Steffens,
president and CEO of the world's fifth largest manufacturer of aero
engines. But there is no doubt the acquisition of FiatAvio by Finmeccanica
and The Carlyle Group of U.S. investment bankers will affect MTU's
future.
MTU and FiatAvio have long been regarded as a perfect fit, to
the extent that due diligence examinations were carried out. But
the final push was never made.
"DaimlerChrysler is indeed concerned because clearly there
are changes to be expected with FiatAvio," Steffens told Show
News. "We always said that FiatAvio would be a very important
partner or element in the consolidation of the European aero engine
industry, which was going to happen sooner or later. One of the
more logical groupings is FiatAvio and MTU, so we certainly have
reason to be concerned about what is happening."
DaimlerChrysler, he said, is assessing the options. "It must
not lose the initiative in that process," Steffens said. "
It could be that it keeps us, I don't know. Consolidation can work
in many, many ways."
MTU is highlighting its technological achievements and challenges
here at Paris. Among them:
The seven-stage high-pressure compressor currently under
test in the PW6000 engine for the Airbus A318;
The "very challenging" low-pressure compressor
for the TP400-D6 turboprop for the Airbus A400M. "It
is so challenging because it has to have very high stability
and efficiency, and must handle both left hand- and right
hand-turning propellers," explained MTU CEO Dr. Klaus
Steffens;
Its 22.5% participation in the GP7000, for which it designed
and has successfully tested the low-pressure turbine. MTU
also has the spoke frame, and manufactures the high-pressure
turbine that incorporates new technology in its cooling
as well as in the industrial processes;
The environmentally friendly CLEAN demonstrator program
(in collaboration with Snecma and others). MTU provides
the high-speed low-pressure turbine, and the heat exchanger
that is key to developing a recuperated engine. "Over
the long haul, the recuperated engine with its heat exchanger
is the only remaining option we have left to improve the
thermodynamic cycle of aircraft engines," said Steffens.
The concept aims to drastically reduce noise levels, fuel
consumption and emissions.
The German automaker, which is still working to make a success
of the five-year-old merger between Germany's Daimler-Benz and Chrysler
of the U.S., aims to divest its non-core activities. MTU has been
a cash cow but this could change as the airline crisis impacts its
revenues, which are expected to fall as much as 25% from last year's
2.2 billion euros.
Steffens makes no secret that an ideal consolidation would include
Volvo Aero
with FiatAvio and MTU as their activities and partnerships with
each other and the major engine makers are complimentary. "All
three are sitting in the same sized boats," he said. "
Logically these companies always contemplate more intensively what
they can do together than with bigger ships where we can't see the
flight deck from our smaller boats."
From an operational point of view ownership is not as important
as who partners with whom and on what, he added.
MTU's strong ties include alliances with Rolls-Royce on military
programs such as the Eurofighter Typhoon's EJ200 engine, Pratt &
Whitney on commercial programs including the PW6000, PW800 and IAE
V2500, and GE on numerous commercial and some military programs.
MTU recently achieved its strategic goal to provide a high-pressure
compressor to the commercial airline market with its contribution
to the PW6000, and it has a 22.5% stake in the GP7000 engine being
developed by GE and Pratt & Whitney in the Engine Alliance for
the Airbus A380. "For us, this engine is the paramount commercial
program for the decades ahead," Steffens said.
