French Government in conjunction with the assistance of French aircraft manufacturers Airbus, Dassault, Safran and Thales. Have made a dedicated investment fund this summer to support poorly SMEs. This fund will offer them equity capital because of its instrumental nature in the overdue alliance of the supply chain.
Small and Medium Enterprises Are At Stake
The French Government’s COVID-19 bailout package is novel in various ways. It’s incredible because it includes the generation of a funding plan that junctures the industry’s cooperation. The struggle of variety of small and medium enterprises (SME) to survive under epidemic, is at stake. Many of these suppliers endowed heavily before the crisis to support aircraft production ramp-ups by original equipment manufacturers. However, currently, unfavorable conditions have prevailed enough to bring these suppliers at risk of bankruptcy because of drastic decline in production.
Capitalization through France’s big four
Airbus, Dassault Aviation, Safran and Thales (France’s big Four) will collectively capitalize the fund as 226 million dollars. After what were most likely complex negotiations, the French aircraft manufacturers have decided to contribute
Airbus – €116 million
Safran – €58 million
Dassault – €13 million
Thales – €13 million
Contribution of France Government
The French Government will contribute through €200 million by issuing a request for proposals to find a managing company for the fund. It’ll contribute an extra €100 million, making an accumulated €500 million available from the start. The fund itself is planning to raise the same amount, bringing the total to €1 billion.
Benefits of Capitalization to the companies
France’s big Four have pooled resources by developing such a financial partnership, for the first time. The establishment of this partnership aims to support the entire industry to emerge once more. At the same time, these French big Four i.e. Airbus, Daasault, Safran, and Thales will cultivate advantages from this financial networking. First, their contributions should help prevent dominant suppliers from going bankrupt. Secondly, they may enjoy a rapid supply chain thanks to consolidation. The purpose of collecting this fund is to generate a small number of larger companies, each focused on a category of components or processes.
Employee Exchange Program
This Government initiative additionally creates an employee exchange program. An OEM going through under workload situation may deliver technicians or engineers to an SME. The latter would use the OEM’s expertise to improve its own skills.