The manufacturer has six to eight months to prove it can meet the requirements of the Indian authorities in matter of offsets and technology transfers. A short delay , especially as the local industry has still many gaps to fill.
There was contained joy, last January 31, when the Indian Ministry of Defence (MoD) has announced the selection of the Rafale to equip the Indian Air Force with 126 multimission fighters. The famous MMRCA contract. But the next day, gravity took over at St. Cloud, headquarters of Dassault Aviation. And for good reason. If the manufacturer of the Rafale and its partners Thales and Safran, want to sign a contract in good and due form, they must prove that they can transfer to the Indian industry 50% of this contract, which would amount between 12 and 15 billion dollars according to various estimations. So, 6 to 7 billion in offsets and technology transfer to find before next fall! This is a record, commensurate to the contract. Only the first 18 Rafale will be built in France. The following 108 should be built by the Indian aeronautic's national champion, Hindustan Aeronautics Ltd (HAL), a state corporation. Dassault must not miss the boat. "It's a big reference for French industry and for us, it will represent about 20 million euros in turnover by plane, "emphasizes Jean-Paul Herteman, CEO of Safran, during the presentation of the results of the group, last February 23.
The Indians landed at Dassault.
But the Indians are in a hurry. The MoD announced its intention to sign a definitive contract eight months after the annoucement around September-October. " Since the beginning of February, Indians have sent their best staff in St. Cloud, dozens of brilliant graduates to form working groups with Dassault teams "said a source familiar with the matter. On the French manufacturer side, it is logically Eric Trappier, Dassault director for international affairs, the man of all the negotiations when it comes to export the Rafale , which took things in hand, in conjunction with the technical direction and the management of industrial affairs.
Concurrently, an ad hoc committee will coordinate and centralize the Franco-Indian work , including members like Jean-Marc Gasparini, head of the Rafale program, and representatives of Thales and Safran. On the Indian side, HAL will be the main interlocutor of Dassault.
Naturally, the idea is not to formalize all the offset volume in the smallest details. It would be an impossible mission in such a short time. In this preliminary phase, HAL and Dassault will list all the fields, module per module, where technology transfers are possible, and will establish priorities and a timetable. Then they will give everything a value [price] and sign partnerships with Indian companies. The aircraft and its 30,000 main components will be dissected to identify transferable parts, subassemblies and equipment : from elements of the fuselage to the landing gear, through pipes or embedded systems.
There is plenty to do , the French fighter aircraft contains for example 25 kilometers of cabling and 300,000 rivets! The goal, in a first step, is to define compensation directly related to the Rafale program. Indirect offsets will come later. Concurrently, Dassault will turn on its supply chain: probably not all of the 500 concerned companies, but rather the 250 to 300 most important . "We have not yet been approached by Dassault, but we expect it. This is to Dassault to conduct these first discussions," said Francois Bertrand, president of the board of Latecoere, which manufactures the high back part of the Rafale.
Engineering processes.
Similarly, the manufacturer of St. Cloud will value all the industrial operations hidden but no less strategic in manufacturing an airplane: Process engineering, CAD, referentials of methods ... Finally, and this is not the smallest task to do for the working groups, they will set the price of licenses to be paid by Indian companies selected to have the right to manufacture a particular equipment. On the side of New Delhi, an actor will play an important role: The Defence Offset Facilitation Agency (DOFA). Created in 2006, this organization ,depending of the MoD, plays the role of interface between military, Indian industrialists and foreign suppliers.
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