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REUTERS
Paris, Sept 18: French defence electronics group Thomson-CSF strengthened by the recent arrival of industrial shareholders such as Alcatel and Dassault Industries, said that it was planning a reorganisation aimed at boosting efficiency.
Chairman Denis Ranque told a news conference the reorganisation would entail a reduction in levels of hierarchy, as well as a rejuvenation of management, which is about to embark on a restructuring announced this week along with the half-year results.
The extent of the restructuring and the charges will be announced over the next two months, Ranque said.
Thomson-CSF reported a drop in net attributable profit to 275 million francs for the first half of 1998 from 551 million.
It said it may show a loss for the year after taking provisions for the restructuring needed to absorb the defence electronics assets brought into the group by Alcatel, Dassault and Aerospatiale in September.
The operation was engineered by the government as part of a consolidation of thefragmented French defence industry before the start of serious pan-European negotiations to create defence groupings capable of competing against US defence giants.
The restructuring aims to take advantage of synergies, particularly with Dassault's Dassault Electronique business, now wholly owned by Thomson-CSF.
"We have to confront the challenges of the future -- defence markets are shrinking, the US industry has gone through a massive restructuring, the European restructurings are gathering pace and they're under way in France," Ranque said.
He said the group's size -- it has 50 billion francs in annual sales -- and its new status as a private company -- although the state is still the largest shareholder with just over 40 per cent -- would allow Thomson to take its rightful place as the leader of Europe's defence electronics industry.
He said the reorganisation was also aimed at improving the results and quality of products.
"We have to react more quickly, eliminate layers of hierarchy andclarify the organisation," said Ranque, 46, former managing director of Thomson Marconi Sonar, a Thomson-CSF venture with Britain's GEC.
He was appointed to the top job at Thomson in January.
He said Thomson-CSF would be reorganised around eight business groups: radars and countermeasures, avionics, communications, information systems and services, optronics, aerial security systems and missiles and tubes and components.
Ranque said the cooperation with Alcatel, Thomson's largest private shareholder with 16 per cent, was proceeding smoothly and the companies were collaborating on technical matters in several areas.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
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