US companies such as Boeing, Lockheed Martin, Raytheon and TRW all have significant interests in Europe. Industry experts believe there is scope for more deals, particularly among suppliers. In the longer term, there may be more mega-mergers. However, the first task facing the industry's bosses is to make a success of what they have already done. It is not just a question of merging different cultures within the two new powerhouses - although that will be a big challenge in itself.
Synergies have to be extracted and profit margins increased.
This is particularly true of Airbus, where the long-delayed creation of an Airbus Integrated Company should allow savings in manufacturing. But it is also true of Matra BAe Dynamics, which is being expanded to include Italian participation and could later grow further to bring in sundry other missile interests from around Europe. Astrium, the former Matra Marconi Space, has re-launched itself following the addition of German activities, to which Italian interests could later be added. These defence ventures are on the verge of big rises in output as orders reach the production stage. It will be vital for them to harness advances in manufacturing techniques and extract maximum efficiencies.