Industrial Cooperation and Global Security: Threat or Support?
Mr. François Courtot
Senior Vice President International Development, SAFRAN
What is the subject? The subject is international cooperation, industrial cooperation within the framework of global security. I will make a presentation that is divided into three parts. First, I will speak on industrial cooperation from the industrial point of view. Then, I will talk about industrial cooperation versus global security: Threat or support? Certainly both. Then I will provide a conclusion.
THE INDUSTRIAL POINT OF VIEW ON INDUSTRIAL COOPERATION
People know perfectly well that industrial companies don’t go for cooperation because it is fashionable or because it is nice to do. We go for cooperation because we want to reduce costs, gain access to technologies, have access to better performance that can’t be achieved by one company alone, have access to financial means, including state means and self-investments, and of course, last but not least, have access to different markets. This last goal can include having access to a specific zone in which other companies have better influence than your company as well as have access to parts of the world in which there is protectionism, so being with a company from that area gives you the opportunity to reach it.
So industrial cooperation is a must, and it must be with partners and allies. But then the question is, what level of partnership can we have with these companies and countries? We need to have a high level of both finances and people. And we need to have balanced investments and balanced efforts on all sides. Industrial cooperation must be driven by technology and by performance. And we all need to persevere to achieve the final product. Within the framework of global security, we must realize that industrial cooperation is a very sensitive area. We also must be aware that it is a confidential area and, as Marwan Lahoud said, that it is linked to export constraints.
Before giving you a glance at the Safran experience in international cooperation, which allows us to think today that we are a quite credible group of global security producers, I am going to give you some highlights about our new group, which was created in May 2005. This new group, which was created from SAGEM and SNECMA, is a 10.4 billion-euro turnover group, 61% of which is coming from Europe (from main contractors such as Airbus, Eurocopter, and Dassault and exported to other countries), 20% from the U.S., and 9% from Asia. The size of our group is 56,200 people (45,700 in Europe, 6,700 in the U.S., and many others in 30 countries). The ownership of the group is a bit more than 38% public, a bit more than 31% the French state, and a bit less than 20% the employees. Of course, we are high-technology driven (mechanics and electronics) and we are working in four areas: Aerospace propulsion, aerospace equipment, defense and security, and communications.
Now I would like to give you some examples of the cooperation our group is engaged in. Some of the relationships are very old within Europe: In the U.K. with engines like Adour and the RTM322, in Sweden with the Sperwer Drone, and in the U.K., Germany, and Spain with the TP400 engine. Other cooperation is transatlantic, with the United States. For example, based on the very good relationship we had for the CFM56 engine, we built a very good relationship for space material. I am sure Al Volkman knows better than I do about all the cooperation with Pratt and Whitney for the space engine. We also had very strong cooperation with the FBI for the Fingerprint Reconnaissance system.
But a different type of cooperation exists with emerging countries. We are talking with Russia about engineering helicopters for the military and about engines for fifth-generation fighters. We have a very good relationship with India in the field of industrial cooperation. We are talking with Pakistan about a brand-new navigation and weapon system for the old Mirage III/Mirage V and we also are cooperating with the Gulf countries and Asia on homeland security and drones. Last but not least, in Singapore we are looking forward to their choosing the Rafale aircraft, whose armament and AASM missiles will not only be produced for but adapted to new needs of the Singapore forces. And while I am not mentioning China, which is a difficult topic, we must keep in mind that the country was and still can be a partner for some of our companies.
We say in France that global security is the “Loup dans la bergerie.” It can be a threat because different actors have to work together. To make it successful, we have to build a system and build confidence while taking into account different procedures that are not always current. We have to face the scattering of information and of course we have to be very careful about “know how” leaks. To reduce the risks, we need to move ahead very cautiously, including making each participant the owner of his or her input. The misfunctioning of one partner must also be contained only to that partner. We also must deal with the lessening of involvement by a country while a program is ongoing.
Of course, global security is supported by the building of confidence between partners and allies and through creating wider competencies to lower risks. With more countries’ budgets and more companies’ investments, we are also able to engage in bigger programs. And having one program instead of many will reduce the competition. With global cooperation we are better able to support the system by involving different companies, different national authorities, and different agencies. Currently we have traditional industrial partners such the European countries and the U.S., but we also are engaging with less-traditional partners such as India and Pakistan, and this is something that may be difficult to deal with as it affects global security.
International cooperation opens the door to weakening security because it makes security more difficult to control. But by putting “everybody in the same bath,” international cooperation builds economic and human solidarity that contributes to global security.