Takes on Rival Boeing - Europe Wants Aerospace Unity
     P A R I S,  Dec. 9 - The leaders of France, Germany and Britain
 have called for an integrated European aerospace and defense elec-
 tronics industry capable of competing with U.S. giants such as
 Boeing Co.
    French President Jacques Chirac and Prime Minister Lionel Jospin,
 German Chancellor Helmut Kohl and Britain's Prime Minister Tony
 Blair jointly asked British Aerospace Plc., Aerospatiale and Daim-
 ler-Benz Aerospace to present a clear plan with a detailed timetable
 before March 31, 1998.
     While saying that the transformation of civil airplane builder
 Airbus Industrie into an integrated company should be an important
 part of the first stages, the leaders did not make clear whether
 they want to see one integrated European group comprising all civil
 and military aerospace activities as well as defense electronics.
     France has so far been working on the idea of a civil and mili-
 tary aerospace group around Airbus and a defense electronics group
 around Thomson-CSF.
     Industry analysts said other European groups that may become in-
 volved in the integration are General Electric Co. Plc. of Britain,
 Siemens AG of Germany, CASA of Spain, Saab of Sweden and Alenia of
 Italy as well as Lagardere Groupe, Alcatel Alsthom and Dassault in
 France.
                            Some Stand United
   A number of joint ventures and projects already exist. Apart from
 the Airbus grouping, British Aerospace and Lagardere's Matra are
 allied in missiles while Alenia, CASA and DASA are joined in the
 Eurofighter combat aircraft project, which rivals France's Rafale.
     France, which unlike its German and British partners still has a
 big state stake in its aerospace and defense industry, recently al-
 lowed a link in defense electronics between Thomson-CSF,
 Aerospatiale, Alcatel and Dassault.
     In the statement, the leaders said they've agreed on the need
 for an urgent reorganization of the European aerospace and defense
 electronics industry.
     The process should include both civil and military aerospace and
 would have to lead to "a European integration based on a balanced
 partnership."
     The leaders said the industry integration would "allow Europe to
 improve its commercial position in the world and reinforce its
 security and guarantee that it plays fully its role in its own
 defense."
     French Defense Minister Alain Richard said on Monday that France
 wants to use the restructuring of Airbus to overhaul the defense in-
 ustry activities of the three main partners.
                    Slouching Toward Consolidation
     Aerospatiale and Daimler both hold a 38 percent share in Airbus,
 British Aerospace has 20 percent and Spain's CASA 4 percent.
     The restructuring plan would be "the first stage of a larger
 consolidation of the three major Airbus partners," Richard said.
     A second phase could also involve the defense activities of
 three other European countries with sizeable industries - Spain,
 Italy and Sweden, he said.
     "Our preference is that these six countries together form the
 natural scope for cooperation," Richard said.
     The partners are due to have the restructuring plan in place by
 the beginning of 1999.
     "There are four big areascivil aviation and transport,
 helicopters, space and missiles," Richard said.
     "You could add a fifth area to that, which would be combat
 fighters, but that would first need the settlement of a Franco-
 French problem," he said, referring to a planned merger between
 Aerospatiale and Dassault Aviation.
     Richard said there was room for two French satellite makers,
 one centered around Aerospatiale and the other around Thomson-CSF.
     The Airbus partners are working toward converting the present
 partnership into an integrated company, owning and managing its own
 assets to increase competitiveness and meet the threat from rival
 Boeing.
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