France wants missile firms to link up

Sept. 15, 2010 at 12:59 PM
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MARSEILLE, France, Sept. 15 (UPI) -- France wants to consolidate the missile sections of three companies to boost their market chances, the country's defense minister has said.

"I have asked the chief executive of the National Arms Procurement Office to conduct a broad study on the missile sector so we can preserve an area of sovereignty," French Defense Minister Herve Morin was quoted as saying by at a two-day defense conference in Marseille this week. "I hope that this study will allow us to encourage the link up that is indispensable for the three national actors in this industry."

The three companies are MBDA, Thales and Safran, a senior industry executive told France wants to pool their resources so they can compete better with U.S. military giants in the emerging export markets. At home, the companies are facing overall defense budget cuts of up to $6 billion.

A European defense giant, MBDA, co-owned by BAE Systems (37.5 percent), Finmeccanica (25 percent) and European Aeronautic Defense and Space Co. (37.5 percent), employs nearly 10,000 people and in 2009 produced more than 3,000 missiles.

It's product range includes a series of missile systems for land, sea and air use, among them the Meteor, a highly successful beyond-visual-range, air-to-air weapon with an active radar seeker.

France's Thales Group, one of Europe's largest defense companies with more than 60,000 employees, owns a missile unit that makes short-range missiles. Safran, from Paris, specializes in defense, aerospace propulsion and equipment and via its Sagem division sells a series of guided bombs. It employs 55,000 people.

Paris in the past months urged Thales and Safran to join forces in several sectors. The government, which owns a 27 percent share in Thales and a 30 percent share in Safran, has cut research money for projects in which companies do overlapping work to convince them for greater cooperation, but Thales resists such a move out of fear to lose its core business.

"I don't underestimate the difficulty of the task but I do believe very firmly in the need for this operation," Morin was quoted as saying. "The directors of Thales and Safran know it very well, just as they know sooner or later they must go ahead with a tidying up of borders. They have asked for more time to find grounds for an agreement."

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