DEFENCE group Thales swung into the red for the first half of 2009, the company said yesterday, blaming writedowns and aerospace industry weakness for its losses.<br /><br />First-half operating profit slumped to €68m. The deeper-than-expected 82 per cent slide in profits reported by new boss Luc Vigneron came after Thales reported a fresh €102m (£87m) loss, attributed to the company’s involvement in the troubled Airbus A400M military plane project. The company is making the flight management system for the aircraft, which is expected to be four years behind schedule when it arrives.<br /><br />The chairman and chief executive said Thales was in talks with the lead contractor for the A400M project, Airbus Military, over compensation for the contract delay, but did not say how much it was seeking in redress. <br /><br />Thales is having to build a more complex design than it initially thought.<br /><br />Delays of Boeing’s 787 Dreamliner have also had a knock-on effect for the French company, which is the largest defence electronics firm in Europe.<br /><br />Vigneron also withdrew forecasts for 2009, saying that it was “difficult to predict the future” when big programmes are in difficulty. <br /><br />“The results reveal weakness in some areas and my priority will be to put in action what is needed so that the situation is resolved,” he said.<br /><br />Analysts are anticipating massive cost-cutting at Thales, and while Vigneron said he had no immediate plans for job losses, he would not rule out the possibility of redundancies. The group employs 68,000, 8,500 of which are in the UK. <br /><br />The company said its intake for orders dropped two per cent compared with the same period last year, to €5.86bn, as demand from private customers slumped.