Qioptiq logo Raytheon Global MilSatCom

FRENCH GOVERNMENT SEEKS TO BAIL OUT GIAT

11 Oct 02. French Defense Minister Michele Alliot-Marie said Friday she is awaiting proposals from Giat Industries Chairman Luc Vigneron for turning around the state-owned loss-making battle tank company to clinch partnerships with European rivals.

“I have asked the (Giat) chairman to think about it,” Alliot-Marie said at a press conference with the foreign press in Paris. Alliot-Marie said Giat would first need to regain its status as “a credible company” before it can explore tie-ups with European partners.

Previous restructuring plans systematically overstated future demand for Giat products and underestimated the need to cut jobs, even as the company botched key export contracts, she said. Demand for heavy battle tanks has vanished in Europe since the collapse of the Soviet Union. Armies across the continent are now buying more reactive military hardware, such as aircraft, she said.

Giat’s rivals in Europe include Krauss-Maffei Wegmann in Germany and Alvis of the U.K., which recently completed the accquisition of Vickers Defensefrom Rolls-Royce PLC (London:RR.L – News). Giat posted a net loss of EUR203m in 2001 on revenue of EUR792m. The company has trimmed its workforce to 7,000 in 2001 from 10,000 in 1998.

Back to article list