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Aviation History
1966
1966 - 0296.PDF
KEFURI OS i'HL COMMITTlf 01 IV.>t 1R* iW.ft THE AJRCRAFJ wr«.i\rR> ipjKnaiJK! t»Y tile MiftCRer <tf A< under the Cheirtuansh)fl rti Uvtf How^a FLIGHT International, 3 February 1966 177 FUTURE ORGANISATION OF THE AIRCRAFT INDUSTRY Plowden Urges "Some Degree of Public Ownership" Because of its basic importance as a starting-point for any future reorganisation of the aircraft industry, the text of the Plowden Report has been reported at length in the previous six issues of Flight. In this concluding instalment we reproduce the main points from Section 7 on the future for civil aircraft, Section 9 on changes within the industry, Section 10 on the relationship between government and industry, and the reservation by Mr Aubrey Jones. Section 8 of the report, not included, covers specialised activities (helicopters, light aircraft, guided weapons and space); Section 11, giving the main conclusions and recommen- dations, was reproduced in our issue of December 23, 1965. The report (Command 2853, obtainable from HMSO at 10s) was signed by Lord Plowden, Mr D. B. Barran, Mr J. D. Cronin MP, Mr St John Elstub, Mr Fred Hayday, Admiral of the Fleet Sir Caspar John, Mr Aubrey Jones, Mr C. W. McMahon and Sir William Penney, with Mr Norman Craig as secretary. ; .^ ... SECTION VII—FUTURE FOR CIVIL AIRCRAFT CHAPTER 26 Government Policy on Civil Aircraft I N the last decade civil aircraft manufacture in Britain has beenunremunerative. Private industry has, with a few exceptions,lost money on civil ventures. . . . Whether manufacturers will be willing and able to provide as much as 50 per cent towards the launching costs of any new projects cannot be fully established without being put to the test in particular cases. One of the major airframe groups has already indicated that if it is to continue to produce civil aircraft, it will require a larger contribution from the Government than in the past towards the launching costs of any new project. The other airframe group has not gone so far as this, but the Committee doubt whether even this group would in practice find the money for a 50 per cent contribution towards any totally new large aircraft project. . . . The Government will have to take a bigger share in financing new projects than in the past. In deciding whether this is worth doing, a cardinal consideration must be the prospective market. The world market for civil air- craft is expanding. But it is still relatively small and highly competitive. . . . Nonetheless, we think it would be a mistake for British manu- facturers to opt out of this field of activity. . . . The general views we have expressed on the need for collaboration apply to civil projects with the same force as to military. ... In general, we think that the possible future rewards make the effort of remain- ing a producer of civil aircraft worthwhile for Britain. A more stable military programme than in the past will be essential as the basis for the industry's contribution to a future civil aircraft programme. The element of Government support in the military programme will be reducing. There need be no inconsis- tency between this and the Government's taking a share, even for a time an increased one, in civil aircraft projects. Sharing launch- ing costs is a form of risk investment by the Government with provision for recovering the investment through the proceeds of sales. . . . Manufacturers should in every case be pressed to contribute at 'east 50 per cent of the launching costs, and the extent to which they are prepared to do so will give a good indication of the commercial merit of the project. But for the reasons already given, we believe that the Government will, at least for a time, nave to be prepared to provide more than 50 per cent of the tunas in some cases. . . . There are also some general considerations by which Govern- ment and industry might be guided in embarking on future civil Projects. First, while stringent tests should be applied before any Project is undertaken, decisions should be made promptly oncehe facts are known. Commercial competition in the civil aircraft field is intense and the timing of projects is even more critical than on military aircraft. We feel that bolder decisions by the Government and manufacturers in the past might have paid, dividends for the country. . . . Second, the basic specification for a new civil aircraft must not be so closely tailored to the wishes of a particular operator that the aircraft's prospects of wider sales are reduced. Manufacturers must clearly strive to obtain an initial order from a domestic opera- tor. . . . But in the past, in their eagerness to obtain initial orders, it seems to the Committee that manufacturers have accepted condi- tions which have handicapped them in securing wider sales. They must not repeat this mistake. . . The aim in the civil programme, as in the military, should be to concentrate on the projects for which the potential market is large in relation to the development costs. . . . We would expect the odds to favour aircraft that were short- or medium-range rather than long-range, small or medium-sized rather than large, and simple rather than complex. Advantage would also seem to rest in stretching or modifying existing types, where the market prospects justify this. We do not think it will ever be worthwhile for a British manu- facturer to embark alone on a new long-range aircraft, or on any new aircraft that is particularly large or complex. On the other hand, it might be reasonable to embark in co-operation with partners in Europe on an aircraft with one, or even two, of these three characteristics. . . . There might be grounds in an extreme case for undertaking with European countries a project with all the characteristics mentioned. ........ , CHAPTER 27 Market Research and New Requirements Market Research A successful civil aircraft programme must be backed by an effective market research organisation. In Britain the quality of the market research has been uneven. Sometimes it has been good. Thorough studies preceded the launching of the BAC One-Eleven; and the Committee have been impressed by much of the work undertaken by Rolls-Royce. But in general it has not been good enough. . . . The Committee consider that the manufacturers should remain primarily responsible for the market research to back decisions about embarking on particular projects. Nevertheless, since the Government is likely to take a greater share of the risks of launch- ing some civil projects, the Ministry of Aviation should maintain independent means of corroborating the assessments of the manu- facturers. ... The Ministry of Aviation have already set up a small section, largely as a pilot scheme, to co-ordinate their own work on market research. We think this section should be expanded by co-opting representatives from industry and the airlines, and that it should have the means to engage outside consultants for special studies. . . . Project Selection -*'.'••• «: ? • *'.;:".'"'. The initiative in formulating requirements for new civil projects has rested almost entirely in the hands of the industry and the airlines. The Concord was an exception. The Government rarely enters the picture, at least formally, unless the manufacturer asks for financial assistance. These applications are considered in the Transport Aircraft Requirements Committee (TARC). . . . Almost every witness from Government departments and industry who was questioned said that the performance of the TARC was unsatisfactory. The main criticisms were that it rarely displayed any initiative and was too ponderous in dealing with proposals calling for speedy decisions. . . . The Committee consider that the TARC is handicapped by the large membership and by the fact that it meets too infrequently. At present the duties of the secretariat are carried out by a few officers from the Ministry of Aviation as an ancillary to their
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