Strong euro forcing work abroad - Dassault Aviation

Dassault Aviation could move some production abroad in order to shield the French jet maker from the sharp fall of the dollar against the euro, the company's chief executive told Le Monde newspaper on Saturday.

Charles Edelstenne told the paper Dassault Aviation would keep its assembly lines in France but needed to produce more components outside the euro zone and would tell staff in January how it planned to tackle the soaring euro.

Dassault lost out to Lockheed in October when traditional French ally Morocco rejected its multirole Rafale jet in favour of the cheaper U.S.-built F16s.

Edelstenne said his company coped with the euro's rise over the past few years, but a further 30 percent decline in the dollar against the euro over the past two years was hurting.

"We cannot cope with such a difference by producing and buying in the euro zone," he told Le Monde.

"The natural step will be to delocalise to dollar or low-cost zones, as has been done in the automobile industry."

"We are preparing measures to adapt the company to the new situation created by the latest slide of the dollar. They will be announced to staff in the first days of January," he added.

Edelstenne said assembly lines and high technology activities would be kept in France but "outside of that, everything could be delocalised."

That could include the production of certain structural elements and some research department tasks currently carried out in France, he said.

"One could imagine setting up non-strategic activities in low-cost countries. But obviously that is out of the question for the design of the aircraft," he added.

Edelstenne warned that the euro's strength was badly damaging his company's competitivity: "In the long-term it could lead to the complete disappearance of certain industries."

Source: Reuters

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