Moving In on Dassault

Aircraft Manufacturer Marcel Dassault, 85, reputedly the richest man in France, always has been philosophical about the fate of the company he founded. "Nationalization," said Dassault last year, "would not after all be a bad thing. Severe unemployment lies ahead, and with a nationalized company, you can be sure that the state will somehow find a way to maintain the labor force." Dassault was talking about takeover by a left-wing government, should the Socialist-Communist opposition win the parliamentary election scheduled for next spring. Last week, however, a step toward nationalization came early, from a different direction. The government of President Valery Giscard d'Estaing announced that it was taking a 34% participation in Avions Marcel Dassault-Breguet Aviation (1976 sales: $1.2 billion) without compensating the company's two owners, Dassault and his 52-year-old son, Serge. The stock transfer will be covered by canceling debts that the company owes the state. Nonchalant, in the family tradition, Serge said: "I don't see what the state gains by taking part of the company, but why not?"

Why not, indeed. Last year the company accounted for 43% of French aircraft exports, worth $900 million, and earned profits of $35 million. As of the first of the year, it had turned out 1,312 Mirage III and Mirage 5 jet fighters (of which two-thirds were exported). Its export sales of warplanes, including the Mirage F1, the Alpha Jet and the Jaguar (built jointly with the British Aircraft Corp.), are unsurpassed by any other European military-aircraft maker.

In a strict sense, of course, Dassault-Breguet will not be fully nationalized. Under French law, however, the government's 34% holding of the stock will enable it to block any major corporate decisions the government does not like. For the time being, at least, Dassault will remain in charge of his empire, including Jours de France, one of the most profitable of French magazines, Chateau Dassault (a Saint-Emilion vineyard) and a variety of electronics companies. But there does seem to be little doubt that Dassault-Breguet's days as an independent company are numbered no matter what the political stripe of the next French government.

Faced with overpowering U.S. competition on world markets and suffering from the commercial flop of Concorde, the French aviation industry needs restructuring into a single, strong entity. Observers reckon that little by little, Dassault will be moved into the orbit of government-owned Aerospatiale, the biggest aircraft company in France (1976 sales: $1.8 billion). But Aerospatiale is ailing. Last year it lost approximately $125 million, thanks mainly to Concorde costs. Clearly this was a situation the government could not tolerate. Last week executives at Aerospatiale headquarters in Paris were jubilant. "Yes, we think our sales are going to be a lot higher next year." said a company official, adding up Aerospatiale and Dassault-Breguet figures to get a total turnover of around $3 billion.

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