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Tue, May 26, 2009

Thales Aerospace to Idle French Plants For Two Weeks

Though most of France reportedly take most of August as vacation anyway ... Thales, the French Aerospace and Defense Electronics Group, says it will suspend operations in its aerospace plants for two weeks during the month in an effort to save money and reduce inventories.

Paris-based Thales' head of aerospace operations, Jean-Georges Malcor, told reporters at a briefing ahead of June's Le Bourget Paris Air Show that delays in the Beoing 787 Dreamliner (pictured below) program is one of the reasons for the surplus inventory. 

Malcor said the company hopes to avoid squeezing its suppliers, many of which are small companies, but that many of its customers are demanding lower prices and easier payment terms.  "They are stretching the thing to the maximum," he said, adding "the main issue is cash."

Thales has about 800 suppliers, down from a peak of around 4000.  Malcor said he would like to see some additional consolidation of suppliers, but did not way what an ideal number might be.

According to The Wall Street Journal, Malcor told reporters the company is working through the crisis in the commercial aircraft sector by relying more heavily on its military business, which remains stable.  Thales' first-quarter revenue was unchanged from a year earlier at EUR2.3 billion, as new orders fell 24%.

FMI www.thalesgroup.com

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