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On the Record with
JEAN-PAUL BECHAT, CHAIRMAN & CEO, SNECMA GROUP
"We don't expect to replace all the suppliers on the Boeing 7E7,"
jokes Snecma Group chairman and CEO Jean-Paul Bechat when asked
about his group's successes on the new Boeing airliner. But the
truth is that French participation in this least American of all
Boeings is at an all-time high.
Snecma's Messier-Dowty landing gear subsidiary scored a major win
when chosen to design, supply and integrate the main and nose landing
gears. Sister company Messier-Bugatti is competing for wheels and
brakes, Snecma's Labinal will supply the wiring, and Snecma Moteurs
is hoping to join GE Aircraft engines on the GEnx engine for the
aircraft.
Other global wins of late include major participation in the 555-passenger
Airbus A380, the landing gear on the Airbus A400M transport and
a leading role in developing its turboprop engines; the SM146 engines
on the Russian Regional Jet. And then, of course, there is Snecma's
50% in CFM International, supplier of the best-selling airliner
engine in history.
This seemingly larger global role isn't a change of direction but
the harvesting of a strategy of industrial rationalization launched
in Europe 10 years ago with Snecma at its core, explains Bechat.
"In 1994 we decided it was not realistic to have one landing gear
company in France and another in the UK, wasting time on competition.
But with rationalization it was possible to create a major player
with the resources to innovate and develop new technology."
Snecma's empire includes Turbomeca and Labinal, Messier-Dowty and
Messier-Bugatti in landing gear and wheels and brakes respectively,
and more recently a grouping of Hurel Dubois and Hispano Suiza into
a leader in nacelles and thrust reversers. Snecma Moteurs makes
up 62.5% of the business, and equipment the rest.
"We want to be in a business if we can be one of the top players,
and then one expects to bring economies of scale and technology
to these competitions," says Bechat.-
The Snecma he brings to Farnborough this year is the first public
outing for the company since the French government floated about
one third of it on the stock market earlier this year. Bechat expresses
satisfaction that the IPO was oversubscribed by a factor of two,
but insists that the company has not changed.
Even before the share offering Snecma was run on the same basis
as a public company, he says. "It is no different now, it just has
different shareholders." It can, however, move faster if opportunities
arise for consolidation now that stock as well as cash can be used
for mergers and acquisitions. "The government was always very supportive
before, but without financial support," he says.
Yet consolidation may no longer be Snecma's main strategy.
"It seems to me the main activity has already been done, and for
engines it is almost finished," Bechat says. Italy's Avio and MTU
of Germany are in play with investors, but they may have missed
the boat. "I am not sure the window of opportunity is still open
for them," he says. While Snecma was once interested, further consolidation
in engines is no longer part of its strategy.
Equipment manufacturing is another matter. "There are still opportunities
to consolidate there," says Bechat. "There are two main customers—Airbus
and Boeing, yet in some fields of activity there are still four
or five players. Some of them will find they can no longer be competitive
as the number of new platforms diminishes."
Snecma last week reported an 8.1% increase in first-half sales
to 3.274 billion euros compared with 6.431 billion euros for the
whole of 2003.
—John Morris
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