COLOGNE, Germany — French shipbuilder Naval Group is counting its blessings of full order books during the worldwide coronavirus pandemic, conscious that defense companies will be scrutinized as national economies contract, according to CEO Eric Pommellet.
The company so far has seen no impact on its activities, including big-ticket shipbuilding programs in Europe, Australia and South America, Pommellet told reporters during a conference call last week.
“We have not lost any projects, we have not lost any customers. All of the defense programs have been kept intact in terms of government budgets for all of our customers,” he said.
Pommellet’s comments fall in line with a trend throughout Europe of governments trying to preserve, if not boost, their defense budgets in the midst of an economic crisis whose contours are still taking shape amid drastic new measures aimed at curbing the spread of COVID-19.
France and Germany announced new lockdown measures this week, with offers by the governments to ease the blow to companies. In France — which represents 70 percent of Naval Group’s business, according to Pommellet — officials consider defense spending a national stimulus.
Still, the situation remains fluid, as the company has worked to adapt its operations to keep the workforce healthy. “When I look at the overall situation for now, I would say: ‘No impact,’ ” Pommellet said. “The question will be tomorrow, of course. And here, I’m unable to look into the crystal ball.”
The uncertainty has driven the company to keep its head down and plug away on the work at hand.
“This is a moment where we must stick to our projects and stay in touch with our customers,” Pommellet said. “Delivering and serving our customers at absolutely perfect performance in this period sends a key message. Because tomorrow, they will remember that we were there.”
It also may not be the time for bold moves when it comes to pursuing further consolidation in Europe’s naval shipbuilding sector in the face of competition from China and Russia. The perennial vision of consolidation has yet to gain traction across the continent.
For now, Pommellet said, he wants to ensure cooperation with Italy’s Fincantieri, under the banner of the Naviris joint venture, can bear fruit.
“Let’s stick to what we do. Let’s deliver, let’s satisfy our customer, let’s demonstrate that what we’re doing is good and see tomorrow where the wind is blowing,” he said.