Weakening dollar may force Dassault Aviation to shift production out of France

French aircraft manufacturer, Dassault Aviation's chairman and CEO, Charles Edelstenne, has said that the company may be planning to move some of its activities out of Europe because of the weak dollar's effect on its bottom line. While the company's production is based in Europe, which ensures that costs are incurred in euros, it however prices its airplanes in dollars.

This has become a problem, for since 2005, the US dollar has depreciated 30 per cent against the euro.

Edelstenne is expected to meet with union representatives as early as Thursday about his plans, but any changes may only be announced publicly in January 2008.

According to Paris daily Le Monde, Edelstenne's plans may involve keeping assembly of Dassault Falcons and Rafale fighters, as well as other ''high technology work,'' in France in order to ''guarantee the quality of our planes.''

Component manufacturing and some office work, however, could be moved to ''dollar or low-cost zones, as has been done by the automobile industry,'' Edelstenne was quoted as saying. ''We must reduce our costs further to remain competitive,'' he added.