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The BBC's John Terrett
"Two main political issues dominate the Paris air show"
 real 56k

Monday, 18 June, 2001, 17:12 GMT 18:12 UK
Tech firms fight for 'star wars' trade
Fabrice Bregier, managing director, MBDA
Fabrice Bregier: important to get involved in star wars programe
By the BBC's John Terrett at the Paris Air Show.

Necks may be craned upwards to watch the flying, but on the ground at the Paris Air Show, other issues dominate the agenda.

First, there are reports that EU regulators have effectively shot down plans by US giants GE and Honeywell to merge, by demanding concessions that the firms say are just too great.

John Weston, chief executive, BAE Systems
John Weston: "Significant issues"
Le Bourget airport is awash with rumours and speculation about the outcome of the EU probe, and the impact it will have on the aerospace industry.

John Weston, chief executive of BAE Systems, says he is watching events closely.

"Clearly for all of us as industrialists... there are some significant issues for us if we end up in a situation where the European and US regulators look at these things in a different way," he said.

Jockeying for position

And the other hot topic is the proposal by US president, George Bush, for a stars wars-style nuclear missile protection shield.

Analysts say Mr Bush got a better reaction than expected from European government heads at the weekend.

And the region's leading edge defence firms are already jockeying for position hoping for a serious payday.

Tri-national defence conglomerate MBDA is one enterprise anxious to be involved.

It will be very improtant for us to join it," Fabrice Bregier, managing director of MBDA, said.

"It will be extremely important to develop new technologies, to maintain key skills and jobs in Europe."

Defence analysts say behind closed boardroom doors, missile makers can hardly believe their good fortune.

Independent analysts Paul Beaver said:

"The European companies... are already knocking on the door of the Pentagon and saying 'look, we have existing systems.

"'Even if you do not use us for your American national system, for theatre missile defence, you really should look at the technologies that we have got'."

But others are more cautious questioning whether 'Son of Star Wars' will fly.

"Defence companies are experts at following the money," Jon Kutler, chief executive at Quarterdeck Investment Partners

"Right now they are being told that this is where the money is, so they are trying to position themselves to take advantage of it."

But while there may be short term gains for firms involved in research and development, the programme may eventually be crippled by it expense, he added.

"By the time the programme gets rolling, it probably will die as being prohibitively expensive when there are substantial other places to spend money in today's environment."

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