Political Shifts in France Impact Safran's Decision-Making

Political turmoil in France, intensified by the fall of the government, is causing economic uncertainty. This situation affects investor confidence potentially disrupting Safran, a major aerospace supplier. The uncertainty complicates decisions like the location for a new carbon brakes factory, posing challenges to the defence sector.

Political turbulence in France has cast a shadow over investor confidence, warns Olivier Andries, CEO of Safran. The turmoil erupted after far-right and left-wing lawmakers toppled the government led by Michel Barnier, giving rise to uncertainty particularly in strategic sectors like defence and space.

Safran, partly state-owned and a crucial figure in aerospace supply, faces increased pressure amid France's political crisis. This comes as lawmakers struggle to pass the 2025 budget, risking a rollover of 2024's budget limits. Such scenarios could strain the defence sector, impacting Safran's planning and investment decisions.

The geopolitical climate further influences Safran's choice for placing a new carbon brakes factory. With France, the U.S., and Canada on the shortlist, the decision hinges on competitive energy prices and political stability. The lingering turmoil is also a test for Safran's partnership with GE Aerospace to navigate the world's largest defence market.

(With inputs from agencies.)