This background paper first describes the structure and management of the French defense-industrial base and then reviews a variety of strategies the French Government and industry are pursuing to rationalize the base, while preserving key technological assets and strengthening the competitive position of French defense contractors in world markets. France has faced the problem of overcapacity since the late 1980s and is already implementing some of the policy options for the United States in the 1990s discussed in the OTA report Redesigning Defense. These strategies include consolidation, diversification into the civil sector, shifting emphasis from procurement to R&D, integrating civil and military production, and international collaboration. While not all French efforts have been successful, and some actions taken by the French Government would not be appropriate to the U.S. economic or political context, the French experience provides interesting and useful lessons for the United States in planning its own restructuring efforts.
Woodrow Wilson School of Public and International Affairs, Princeton University, http://www.wws.princeton.edu/~ota