Europe's top aerospace groups that make up powerhouse Airbus Industrie said Friday that they have agreed in principle to create a unified aerospace and defense company to combat fierce competition from the United States, especially from world leader Boeing Co.
But the commitment from France's Aerospatiale, British Aerospace, Germany's Daimler-Benz Aerospace and Spain's CASA sets no timetable and offers few details on the much-needed consolidation.
They added that much more work is needed to pull off the consolidation of Europe's fragmented civil and military aerospace sectors and therefore they have set no timetable--even though governments have asked them to do so.
One of the few practical steps put forward is a repeat of past plans to transform the successful commercial Airbus Industrie partnership into a single corporate entity. The new Airbus enterprise would be formed in 1999, creating an independent company with its own assets.
Alarms have been ringing in Europe as U.S. defense companies have been strengthening their capabilities through mergers and acquisitions.
The four European firms said Friday they have sent a confidential report to their governments.
"The report submitted today reflects to a large extent an agreement in principle on the aims, scale and operational structure of a future unified European company resulting from a reorganization of the partners' activities," the statement said.
Britain and France welcomed the report, but made it clear that the sector is only at the start of its overhaul.
British Defense Minister George Robertson and President of the Board of Trade Margaret Beckett said that there "are still a number of measures that require further work."
The European Commission and German and Spanish governments all welcomed the plan.