This agreement marks another step forward in the integration of airframe manufacturers and underscores the involvement of Finmeccanica and GKN in the industry-wide restructuring now underway in Europe. Whether this involvement will go as far as a merger with Eurocopter remains to be seen, but analysts say that such a move would fall in line with what's happening elsewhere in Europe's aerospace sector. The two companies bring complementary strengths to the deal. Westland has program experience and a strong military presence, whereas Agusta boasts an impressive track record and reputation in the civilian market. Completion of the merger is subject to regulatory approvals.
Local unions remain suspicious about the oil companies' motives.
Some charge that contractors may be using the sustained worldwide oil glut as an excuse to reduce labor costs in an effort to become more competitive without attracting much political or media attention. Such a merger would likely lead to a new round of layoffs. The thinning of oil company ranks also has significantly reduced air traffic at Aberdeen's three heliports. Despite the modest rise in oil prices, offshore operators remain gloomy. The depressed state of the industry is expected to continue through the end of the year, and is likely to continue well into 2000.