Snecma Group Business Information, Profile, and History

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Because continuous improvement is not a haphazard process, Snecma aims to achieve progress through a structured, professional framework. In our drive to improve efficiency, we are applying our proven aerospace industry professionalism to progress initiatives.

History of Snecma Group

Snecma Group is considered the world's oldest manufacturer of aircraft engines. It is the fourth largest after GE, Pratt & Whitney, and Rolls-Royce. Of Snecma's two core businesses, Propulsion accounts for a little more than two-thirds of total business. Equipment--a category including landing gear, braking systems, nacelles and thrust reversers, and power transmission--provides the remainder. Revenue from engine and landing systems support services accounts for about 13 percent of sales. The company's CFM International joint venture with GE Aircraft Engines brings Snecma $500 million a year for its share of spare parts business alone.

Pioneering Origins

France has produced its share of aviation pioneers; no less important than the airframe designers and the pilots were the people who produced engines powerful enough and light enough for powered flight to finally take wing.

The technology for the first airplane engines was developed at the same time as early automotive engines. A steam engine powered an early flight attempt by Clément Ader in 1890. Internal combustion engines provided a better power-to-weight ratio, yet most of the early engines sold to aircraft designers were derived from those found in automobiles.

In 1906, Santos Dumont made the first gasoline-powered flight in Europe using a V-8 Antoinette engine producing up to 50 horsepower. Anzani, the Renault brothers, and other firms produced workable engines. According to Snecma's official history, the first airplane motor to be considered a true worldwide success was 50 horsepower Omega, a seven cylinder rotary engine produced by Gnôme. The famed aviator Henri Farman flew a Voisin aircraft powered by an Omega engine to set a 1909 distance and endurance record (180km in 3 hours and 15 minutes).

Snecma traces its origins to the Société des Moteurs Gnôme, founded in 1905 by Louis Seguin. In 1915, this firm merged with the Société des Moteurs Le Rhône, founded three years earlier by Louis Verdet, to form Gnôme & Rhône. While Gnôme had continued to produce rotary engines in the 50 to 100 horsepower range, Rhône had refined its fixed-cylinder engines to produce 200 horsepower. However, both these lines of engines were being outclassed in terms of reliability, economy, or power by several contemporary engine manufacturers.

Nevertheless, the two merged companies were quite successful commercially, thanks to licensed production in Great Britain, Russia, the United States, Sweden, Germany, and Japan, as well as joint ventures in Italy and elsewhere.

Retooling Between the Wars

A number of factors hit Gnôme & Rhône (G&R) hard after the war. A huge tax burden was levied based on the firm's previous international success. At the same time, a mass of war surplus engines glutted the market.

Unlike its other domestic rivals, Gnôme & Rhône lacked experience in areas apart from aero engines, a market now glutted by thousands of surplus motors. A variety of schemes, from making sewing machines to engines for farm tractors or cars, all failed. In constant francs, the company's sales in 1921 were almost half those of 1913, though the factories were five times larger, notes one scholar in the journal Entreprise et Histoire. In that year, the already legendary company reduced its employment from 6500 workers to 1200.

Production of motorcycles under the Gnôme & Rhône was one area that produced quite satisfactory results in the marketplace; in fact these machines gained a devoted following. In 1922 the English firm Bristol licensed to G&R the right to produce its powerful air-cooled radial engines producing up to 450 horsepower, as well as the freedom to sell them anywhere in the world except for the United States and the territories of the British Empire. With the support of its banks, G&R was able to retool its workshops to build engines, including the new Jupiter introduced in 1923. At the time, G&R had also taken a significant holding in a French-Romanian airline, which helped establish its engines in Eastern Europe.

Between 1924 and 1928, sales increased more than sixfold. At the same time, the air, sea, and land branches of the French military were deciding their outdated equipment was in need of replacement, hence, another blossoming market at home. Expanding commercial fleets produced still more demand. The radial Jupiter engines earned a reputation for being simple to run and easy to fix, even if in-line and V-8 engines made by Hispano-Suiza and Lorraine-Dietrich were more powerful. A novel program, instituted in 1924, allowed for the lease of the engines for a given number of flight-hours, which relieved designers and manufacturers some of the financial strain associated with bringing out new models of aircraft. The popular Jupiter engine was subsequently licensed for production in several European countries as well as the Soviet Union and Japan.

G&R introduced its K family of engines in 1928. In terms of power, this series culminated in the 750 horsepower 14K licensed to a Soviet factory for eventual use in Antonov transports. G&R's designers evolved L, M, and N families of engines by 1939; one of the latter achieved 1150 horsepower.

Air power played a determining role World War II, and G&R engines had a significant part to play. The Soviet Union's Molotov factory was producing 300 licensed G&R engines a month in 1940 for use in biplanes and Sukhoi fighters. In Japan, Mitsui illegally copied the 850 h.p. 14K engine, producing the "Suizei" powerplant found in the Mitsubishi Zeroes that attacked Pearl Harbor. During the Nazi occupation of France, G&R became a subsidiary of BMW. Emmanuel Chadeau writes in Entreprises et Histoire that G&R thereby influenced 16 manufacturers in 14 countries during the war; this off-shore production nearly equaled G&R's own output of 8,000 motors a year--together accounting for a quarter of the worldwide market.

SNECMA Created in 1945

The high share price that G&R commanded prevented it from being nationalized before the war. However, this did come to pass after the Liberation. SNECMA, la Société nationale d'étude et de construction de moteurs d'aviation, was thus created on May 29, 1945. The company was an amalgamation of diverse design bureaus and workshops; it inherited a work force of 10,000 mostly part-time employees. Along with G&R, Snecma was given some of the factories of the Société des moteurs et automobiles Lorraine, formerly Lorraine-Dietrich, which had been nationalized as la Société nationale des moteurs and had been relegated to making parts for tanks. Some of Snecma's other facilities had been devoted to the production of German Junkers engines by the thousands during the Nazi occupation. G&R also owned a factory of the Aéroplanes Voisin firm, which had gone bankrupt in 1938.

Unfortunately, the British government preferred to grant licenses for the newly acquired jet engine technology to rival Hispano-Suiza in the immediate postwar period. Snecma immediately after World War II suffered many of the same disadvantages as G&R had immediately after WWI. It was not until 1950, writes Chadeau, that budgetary crisis forced a restructuring that closed unproductive plants and reequipped modern ones to give the firm some hope of a future.

Given their already apparent importance in the future of military aviation, jet engines were the prime focus of Snecma's development in the 1950s. However, the company did not abandon propeller-driven aircraft. In 1951, the firm acquired a license from the Bristol firm to produce the 2,080 h.p. Hercules engine for use in Noratlas military transports; nearly 1,400 of these were produced by 1964.

The creation of jet engines in the World War II propelled planes allowed a huge leap in aircraft performance. However, in the period immediately after the war, the devastated nations of Europe were unable to match American and Soviet research into jet engine design until the middle of the 1950s. A group of 120 former BMW engineers were assembled in the French controlled sector of Germany in 1946 and integrated into the Snecma team in France in 1950. From their efforts sprang the ATAR series of military engines, the first of which was created in 1948. Their first test of an engine equipped with afterburner came in 1953. The SO-4050 Vautour was the first plane powered by these engines; other better-known fighters such as the Mystère and Super-Mystère, and Mirage III, IV, and V. Planes powered by these engines set several speed records and enjoyed a lively export trade.

Meanwhile, Hispano-Suiza had been producing jet engines under license from Rolls-Royce, including the famous Tay engine, which it began building in 1954. The next year, it introduced its own turbojet, known as the Verdon, which was installed in Mystère IV aircraft.

Another French firm, Turboméca, was making quite low-powered jet engines, though in 1960 it began producing the Adour engine for the Jaguar fighter in cooperation with Rolls-Royce. Turboméca also produced engines for turboprops and, most notably turbine-driven helicopters, which it supplied to a variety of French and foreign firms. Yet another firm, Microtubo, was launched in 1961 to produce small turbojets.

While Hispano-Suiza and Turboméca were signing deals with Rolls-Royce, in November 1959 Snecma entered a contract to produce Pratt & Whitney's popular JT8-D engine in France. The JT8-D powered several American military jets as well as the DC-8 and Boeing 707 airliners. Snecma signed an agreement with Bristol Engines in November 1962 to develop the Olympus engines for the Concorde supersonic transport.

In 1968, Snecma took control over Hispano-Suiza, which included the mechanical engineering firm Bugatti, the landing gear manufacturer Messier, and the engine maker Berthiez. All of these were at the edge of ruin.

Revitalized in the 1970s-80s

A couple of initiatives would result in Snecma recapturing a leading place among aircraft engine makers by the end of the 1970s. Even though only a few examples of the Concorde would be produced, Snecma gained considerable experience and prestige through its participation. In 1969, the firm had begun development of its M56 engine, which would first appear on the market in 1976. An even more far-reaching program was launched in 1971 with General Electric, which was eager to break Pratt & Whitney's domination of the U.S. market.

In this agreement, Snecma was to produce 20 percent of GE-s type CF6 engines (CF meaning "commercial fan"), which were destined for use in several Boeing airliners. In addition, they would also be used in the first planes made by Airbus Industrie, the new European consortium created to challenge U.S. control of the industry. A second contract provided for the joint production of the CFM 56 engine. The CFM International joint venture was formally created in 1974.

Snecma expanded its role in the CFM program after the CF6 engine was chosen for both the Airbus A310 and Boeing 767. In late 1980 Snecma and GE began planning a new $30 million plant in France to accommodate its production.

The French government mandated the merger of the Société Européenne de Propulsion (SEP) with Snecma in 1984. SEP produces rocket engines used in the Ariane space program and was merged with Snecma due to concerns it could not meet increasing production demands. By 1985, Snecma was taking a half share of CFM contracts, including a $2.7 billion order for 137 engines to re-equip the U.S. Air Force's aerial refueling fleet.

Consolidation in the 1990s

The unprecedented airline industry downturn recession in the early 1990s resulted in consolidation among suppliers. In early 1994, Snecma merged its Messier-Bugatti landing gear subsidiary with Dowty, owned by the United Kingdom's TI Group. Messier-Bugatti was effectively privatized for the merger. However, the two cultures of the merged parties clashed; TI Group exited the Messier-Dowty joint venture by the end of 1997.

In the mid-1990s, Snecma's engine business was encountering its first civil market downturn ever, according to CEO Gerard Renon. It lost $100 million on sales of $1.8 billion in 1993. Workforce cuts and other measures were taken to increase productivity and shorten production cycles. Employment was reduced from 14,000 in late 1990 to 11,500 in December 1996.

A unique four-way alliance between Snecma, GE, Pratt & Whitney, and MTU to develop a small jet engine fell apart in September 1994. Meanwhile, CFM's market share of engines for larger jets approached 70 percent.

When Jean-Paul Bechat became Snecma's new head in the summer of 1996, following the brief reign of Bernard Dufour, he stated the company was close to bankruptcy and full of conflict. However, within a year things were closer to normal--operating profit rose 70 percent, to Ffr 440 million in 1996.

After losing Ffr 280 million in 1996, Snecma posted a net profit of Ffr 750 million ($122 million) for 1997. Exports accounted for about 70 percent of turnover, with more than three-quarters of these coming from the civil sector.

As the lifespan of jet engines increased, scheduled maintenance became a more important source of business. A new division, Snecma Services, was created in January 1997, which offered support services for landing systems and engines. By 1999, it had sales of $400 million and 2,000 employees. The Snecma group as a whole reported revenues of $5.3 billion for 1999. That year, CFM International celebrated the delivery of its 10,000th engine; the joint venture was widely held to be the most successful Europe-U.S. collaboration ever.

Snecma was converted into a holding company in January 2000. Snecma Moteurs was created to consolidate its air and space propulsion operations. Later in the year, Snecma acquired Labinal group for $1.1 billion but sold off its automotive businesses. Part of Labinal's holdings included Turbomeca, which produced nearly $1 billion worth of turbine engines for helicopters and fixed-wing military planes. Snecma also acquired the British engine nacelle/thrust reverser manufacturer Hurel-Dubois in 2000, which it soon consolidated with Hispano-Suiza to form Hurel-Hispano.

Between 1995 and 2000, sales rose 100 percent, reaching FFr 36.9 billion (EUR 5.65 billion), mostly on the strength of acquisitions. Exports accounted for most of the increase, while rapidly growing commercial sales accounted for 84 percent of the total.

Preparing for Privatization in 2001

Plans to privatize Snecma were developed throughout 2001. A merger of Snecma's ballistic propulsion activities with those of rocket engine and munitions manufacturer SNPE, was also under consideration. The French government planned to sell off a quarter of Snecma in an Initial Public Offering if market conditions were favorable, hoping to garner EUR 1.5 billion from the sale. These plans were put on hold after the September 11 terrorist attacks against the United States produced a downturn in the markets. The EUR 500 million SNPE merger, dubbed the Herakles project, had begun to fall apart over the question of leadership.

During the year, Snecma entered a joint venture with Rolls-Royce to produce engines for the next generation of European military aircraft. It had also tapped low-cost, quality Russian engineering talent from NPO Saturn to develop a new engine for regional jets. A collaboration between Snecma and FiatAvio (Italy), ITP (Spain), MTU Aero Engines (Germany), Rolls-Royce, and Techspace Aero (Belgium) was developing a turboprop engine for the Airbus A400M military transport. Meanwhile, Snecma Services entered a maintenance, repair, and overhaul venture with Sabena Technics.

Principal Subsidiaries: CFM International (United States; 50%); Messier-Dowty International, Ltd. (United Kingdom).

Principal Divisions: Cinch; Globe Motors; Hispano-Suiza; Hurel-Hispano; Labinal; Messier Bugatti; Messier-Dowty; Messier Services; Snecma Control Systems; Snecma Moteurs; Snecma Services; Techspace Aero; Turbomeca.

Principal Operating Units: Propulsion; Equipment.

Principal Competitors: General Electric Co.; Pratt & Whitney; Rolls-Royce plc.

Chronology

• Key Dates:
• 1905: Société des Moteurs Gnôme founded.
• 1915: Gnôme merges with Le Rhône to form Gnôme & Rhône.
• 1922: G&R begins producing Bristol radial engines under license.
• 1945: Snecma created.
• 1959: Snecma begins producing Pratt & Whitney engines under license.
• 1968: Snecma acquires control of Hispano-Suiza.
• 1971: Snecma enters into longstanding partnership with General Electric.
• 1985: Snecma merges with rocket engine producer SEP.
• 1994: Messier-Bugatti landing gear unit merges with Dowty of Britain.
• 2000: Labinal and Hurel-Dubois are acquired.
• 2001: French government plans, then postpones Snecma privatization.