Paris, Dec 11 (IANS) European aerospace and electronics giant Thales has unveiled an action plan to increase productivity by 1.3 billion euros in five years to bring its operational performance closer to that of its continental competitors and strengthen its growth in the medium term.

It has also unveiled a new organisational plan under which the group would be structured around three large regions and seven divisions.

Detailing the new initiatives at the board of directors meeting at Neuilly-sur-Seine Thursday, Thales chairman Luc Vigneron said: "We resolutely intend to implement the actions for the transformation of Thales, which are aiming at a better control of our bids and programmes, improved productivity and a simpler organisation.

"Better performing, more efficient and more reactive, Thales will have the necessary room for manoeuvre to pursue its development and come back to profitable growth," Vigneron added.

At the heart of the initiatives is a performance plan to ensure productivity improvement of 1.3 billion over the next five years.

"This productivity effort is a prerequisite to keep the Group's competitiveness and will mobilise everyone within the company," Vigneron pointed out.

The production plan aims at:

* Bringing down non-quality costs and increasing customer satisfaction to align the entire group to the levels achieved by its best-performing units,

* Raising the efficiency of engineering, industrialisation, supply chain and information systems, and

* Significantly decreasing overheads.

Under the new organisational plan, the three regions would be responsible for their profit and loss accounts, while the seven divisions would be in charge of research and development, product policy and industrial policy worldwide.

"A comprehensive review of the company's activities has been performed over the last few months. It has confirmed the wealth of Thales's technological portfolio, the quality of its staff throughout the world and the robustness of its customer base, and this has enabled Thales to overall withstand the world economic downturn well," a company statement Friday said.

"However, important difficulties on several aerospace and security programmes have strongly impacted operational profitability and highlighted the necessity for a profound transformation of the operating processes used by the group," the statement added.

It was against this backdrop, and as the global environment continues to show depressed air traffic, government budgetary constraints and a weak dollar against the euro that Vigneron presented the new initiatives, the statement said.