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Aviation History
1972
1972 - 0082.PDF
50 British Aerospace tomorrow FLIGHT International January 13, 1972 JANUARY, W2 "The role of advanced technology for the future of Britain should nowhere be in question. Country after country finds it ever more simple to compete in mass produc tion industries, and Britain can only hope to maintain its present standards by creating and fostering competitive advantages in brain-intensive areas. Britain should press home what advantages she has and in aerospace she has a world position it would be improvident to let slide. But such technology must be maintained; once the industry falls behind, recovery can be achieved only at immense cost. Our competitors are well aware of the desirability of playing an effective role in an industry which continues the twin advantages of high growth rate and a gearing towards the most advanced technologies. The industry is an integrated whole: one major sector cannot flourish without the others for, deprived of any substantial home orders, the commercial situation with regard to foreign projects becomes one of the most extreme vulner ability. Lack of vision and timidity can drive us out of our position of leadership in this most advanced of industries. If this happens there will be no shortage of nations with more imaginative leadership striving to take our place. To do nothing is in itself a decision to surrender our position." A FUTURE PLAN FOR BRITAIN'S AEROSPACE INDUSTRY Above is the conclusion of a report* published on January 7 by the Society of British Aerospace Com panies. The leading article in this issue summarises the international implications. Other important extracts :— At the end of the last war the aerospace industry in the West was virtually monopolised by Britain and the USA, and they remain to this day the only countries with com pletely integrated airframe, engine and equipment indus tries. They also continue to lead the free world in aerospace technology and, if the US dominates the space field, Britain is her equal over much of the aircraft sector and has a marked lead in some areas such as vertical take off, civil supersonic flight [in co-operation with France], quieter engine technology and blind landing as well as other individual equipment sectors. Of recent years certain European countries have made rapid progress in building up their own aerospace indus tries, and unless speedy decisions are taken to exploit the technological leads which Britain has created there is a danger that the UK will be left behind. It would be folly to surrender this huge investment in advanced technological capability in a world which is growing ever more competitive in all branches of industry. Though it will be necessary to join in collaborative projects for the purpose of reducing unit costs, this country can only maintain a strong defence policy if it preserves the aerospace industry's capacity to produce advanced sys tems. The Services currently have over twenty different kinds of aircraft in operation. They need a viable industry to maintain, improve and play its full part in replacing these systems. Experience has shown that this country cannot expect long to depend on exports from those industries where the technology is relatively easily acquired. Less developed countries, with lower labour costs, are moving rapidly into these fields. Our advantage lies in the brain-intensive, advanced-technology industries where currently we enjoy the particular advantage that our labour costs are below those of our main competitors. The aerospace industry leads this sector of world manufacture and Britain possesses a technology and a productive capacity unrivalled in Europe. The highly specialised capital facilities employed are not easily transferred to other uses and best workers have skills which cannot be quickly adapted profitably to the needs of other industries. With British labour costs now significantly below the French and given similar production runs, British total •Available from: Information Department, SBAC, 29 King Street, St James's, London SW1Y 6RD; price 15p. production costs would be significantly lower, showing that our industry is excellently placed to compete or collaborate with European manufacturers. The aircraft industry is one of the few in Britain to increase its share of world trade over the 1960s. This has risen from 10-2 per cent in 1964 to 14-5 per cent in 1968-69. Over these years Britain's share of world trade in all manu factures fell from 12-6 per cent to 10-2 per cent. The industry's civil exports provided about 2 per cent of total British exports in 1960-64, but by 1969 this had risen to 2-5 per cent. Over the last five years the industry has regularly exported two-thirds of its total civil output. Furthermore, official figures for the industry do not include all direct exports of aviation electronics. An important factor in the balance of payments which is often overlooked is the stimulus which the sale of British aerospace products provides to invisible exports. For example, the Saudi Arabian consortium involves the employment of up to 1,000 people in that country over a period of five years; this labour force will be supplied almost wholly from United Kingdom sources. Payment for these services is made in foreign currency in the UK. This contract alone will bring in £54 million over five years. Initial sales of hardware open up a market for the sale of complete airfields, ground radar and general aerodrome servicing equipment. The market expectations of the industry remain ex tremely buoyant . . . demand for air transport continues to grow and when the present degree of excess capacity is reduced demand for new aircraft will rise again. The level of deliveries in 1970 will probably be reached again in 1973 and then grow at 5-6 per cent per annum to exceed £2,000 million by the end of the decade. To this must be added £1,400 million for the supply of spares. World demand for military aircraft and guided weapons, excluding US and Soviet bloc home requirements, is set at about £2,200 million per annum by 1980. Assuming Britain maintains a 15 per cent penetration of this market, a figure for annual production sales of about £860 million by 1980 is not unreasonable, compared with an average of £500 million in the period 1968-70 (production sales 1968-70 equals industry turnover less R&D). From this it does not appear that any further reduction in the UK labour force can be expected if these targets are to be achieved. The size of the initial investment for a modern civil aircraft and the very long period of gestation involved call for abnormal methods of financing. A medium-range jet or engine may require up to £100 million in launching costs. In addition, because of the effect of the learning curve, whereby production costs fall at a steady rate over continued on page 56
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