What happened to the Toulouse flagship of aeronautics? the Tribune returns in a two-part dossier on fifteen years of ups and downs that have changed the destiny of Latécoère. The first part can be read here.
2016: first social plan in France
Thunderbolt in 2016. For the first time since its creation in 1917, Latécoère saw its first social plan in France. In particular, it involves the elimination of 236 positions and the closure of the Tarbes site, but also the creation of a new production site in Toulouse.
Decisions partly linked to the absence of new programs in aeronautics.
“These job cuts are linked to lower workloads in engineering, due to the absence of new programs. We are also adapting to the weakness of business aviation and the slowdown of certain programs such as the A330 and the A380, the rates of which are not at the expected level”, then advances Frédéric Michelland.
Demonstration against the Latécoère social plan in Toulouse. (Credits: Rémi Benoit)
These justifications do not fully convince the employees who demonstrate in Toulouse.
« The aeronautics sector is a cyclical industry which sometimes experiences significant cost reductions. And today, when Latécoère has an order book of four years of turnover, we are announcing a social plan, “Is indignant Florent Coste, CGT delegate at Latécoère. The unions see a direct link with the entry into the capital in April 2015 of two Anglo-Saxon investment funds (Apollo and Monarch).
“The sole purpose of this plan is to enhance the group’s share price. Most of the Toulouse production, with the exception of the assembly of the A330 section, will be transferred to Mexico, Bulgaria or Brazil. Conversely, we will produce in-house elementary parts previously subcontracted to local companies. Latécoère produced entire aircraft for a long time and now we would simply be a supplier of elementary parts for our own subsidiaries”, worries Florent Coste.
In July 2016, a new twist, the Tribune reveals that the general manager of Latécoère Frédéric Michelland is thanked by the Apollo and Monarch funds. “It seems the funds want to appoint someone ‘of their own’ to lead the group,” said a source familiar with the matter. We have never seen that: landing the CEO during a restructuring plan.
A few days later, the manager returns in an interview to the Tribune on « choc » of this announcement of which he became aware on the day of the publication of our article.
« When I arrived, Latécoère was on the verge of liquidation, no one believed in the recovery of the company and I was told that the only solution was to sell Latécoère piecemeal. I refused. The financial restructuring and the implementation of the Boost plan enabled the company to recover. Latécoère needed a real industrial project, it now has it. Today Latécoère customers are reassured, the results are there, it was worth the fight “, he lets go.
On the sidelines of the social component, Latécoère decides to sell its services branch to the ADF group for an amount of 60 million euros. A choice that surprised some observers insofar as this activity is very profitable.
2018: the factory of the future, the anti-relocation weapon
Yannick Assouad takes the helm of Latécoère (Credits: Rémi Benoit).
After the departure of Frédéric Michelland, the latter was replaced in 2016 by Yannick Assouad, from Zodiac Group. As soon as she arrived, the manager carried out many projects as part of the 2020 transformation plan. Latécoère sold its historic Toulouse headquarters to the promoter Icade, whose machines were transferred to the new factory of the future built in the Montredon area, in Toulouse. Inaugurated with great fanfare in May 2018, the factory requested 37 million euros of investment for a new automated production site of 6,000 m2, the capacity of which will then be increased to 9,000 m2 for an additional 10 million euros.
The factory of the future is then presented as an anti-relocation weapon.
“It is a strategic choice to refocus on aeronautics and to reinternalize the production of parts currently carried out by suppliers in low cost areas, argues Yannick Assouad. By staying in France and focusing on automation and digital, we hope to double our production capacity on this new site. »
A tool supposed to reduce the group’s industrial manufacturing cycles from several weeks to a few days, which would allow it to reduce its stocks and its need for working capital.
Latécoère factory of the future (Credits: Rémi Benoit).
At the same time, Latécoère operates a specialization of its production sites: Gimont will be devoted to aircraft fuselage and will see the transfer of certain activities from the Périole site. The Montpellier site will be solely dedicated to interconnections in the space sector with customers such as Thales Alenia Space or OneWeb. The Labège site will be devoted to studies, prototypes and after-sales services.
Latécoère is also continuing its deployment to the countries best-cost such as Mexico, Morocco or Tunisia and opened a new factory in Bulgaria.
2019: Latécoère goes under the American flag
In 2019, a new turning point. The American investment fund Searchlight Capital Partners is launching a public takeover bid (OPA) for the group and arousing strong reactions in Toulouse. Even if the management of the aeronautical equipment manufacturer assures that this operation was carried out with their agreement, certain deputies, the mayor of Toulouse and trade unions are worried to see Latécoère pass under the American flag. At the same time, 17 deputies wrote to the Prime Minister asking him to have a “sovereign approach” on the sales of Photonis and Latécoère. The American investment fund obtains just over 65% of the industrialist’s capital.
Its general manager Yannick Assouad sees in it “ The best of both worlds since the stock market brings the advantage “notoriety and financial transparency”and the presence of a shareholder controlling » and eager to develop the group ensures the financing of this growth.
2020: Yannick Assouad landed, Latécoère facing the health crisis
Unexpectedly, four months later, Yannick Assouad landed in March 2020, in the midst of the Covid-19 crisis by the American fund which replaces her with the Briton Philip Swash, who worked for twelve years at Airbus before joining the British aeronautical and automotive supplier GKN in 2007.
The health crisis is putting Latécoère in great difficulty, which was already weakened before the emergence of the coronavirus by a reduction in the activity of several programs such as the Embraer E1, Dassault F7X / F8X or even the twin corridors of Airbus. As of April 2020, the group announces that it has obtained a state guaranteed loan (PGE) of 60 million euros. The generalized drop in production rates throughout the aeronautical sector is aggravating the torments of Latécoère, which will lose 190 million euros in 2020 with a turnover of 413 million euros, i.e. a fall of 42% over one year.
In September, employees speak of a ” sledgehammer » when the Toulouse aeronautical equipment manufacturer announces a massive social plan of 475 job cuts in France, or a third of the workforce. The shock wave is huge in the Pink City.
The shock wave is enormous in the Pink City during the announcement of a social plan targeting a third of the French workforce. (Credits: Rémi Benoit)
2021-2022: a new headquarters in Toulouse, new recapitalization
In the end, the social plan is reduced to 246 job cuts in the aerostructures activity and partial activity saves the 130 jobs threatened in the interconnection branch. The two activities are brought together in the group’s new headquarters in Toulouse, inaugurated at the end of 2021.
At the same time, Latécoère is taking over Bombardier’s electrical wiring activities, convinced that this activity will be increasingly outsourced by aircraft manufacturers. Nevertheless, this acquisition appears somewhat paradoxical in Latécoère’s roadmap, which provides for the organic development of the interconnection systems division.
New Latécoère headquarters inaugurated at the end of 2021. (Credits: Frédéric Scheiber)
Thierry Mootz replaces Philippe Swash in the summer of 2021 at the head of Latécoère (Credits: Frédéric Scheiber).
In the summer of 2021, a new change in governance at Latécoère. A year and a half after his appointment as head of Latécoère, Philip Swash was replaced as general manager of the group by Thierry Mootz, until then deputy general manager.
« Latécoère is aiming for a critical size of 1.5 to 2 billion euros in turnover. Today, we have reached 400 million, which means that we are going to make acquisitions that will allow us, around 2025, to reach the size we had before the crisis. VShe acquisitions and the increase in production rates will enable us to aim for just under one billion. And then, marrying a company of a size equivalent to ours, will allow us to reach this target of 1.5 or 2 billion euros. “, then fixes the new leader.
Thanks to a capital increase of 222 million euros, Latécoère finances a series of acquisitions. Latécoère first acquired in the summer of 2021 the company TAC in Belgium, which produces connecting rods in particular, before buying the Shimtech Mexico company located next to its production site for doors for the Boeing 787. The equipment manufacturer then completed the acquisition of Malaga Aerospace, Defense & Electronics Systems (Mades), a Spanish company employing around 100 people and specializing in printed circuit boards. Last spring, Latécoère also got its hands on the Canadian Avcorp allowing it to access the American defense market before finalizing the acquisition of the Mexican factory of Figeac Aero.
So many operations that also dig the group’s finances. Despite the capital increase in the summer of 2021, Latécoère is still very indebted (up to 148 million euros at the end of June 2022). Its factory of the future is still not profitable, its ramp-up having been hampered by the health crisis and the poor health of orders for the Boeing 787. The group must also face fierce competition in its machining activity with the consolidation of the supply chain under the impetus of the principals which gave birth to the giant of elementary parts Mecachrome. The group will unveil its annual results on March 24.