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Aviation History
1973
1973 - 1396.PDF
796 FLIGHT International, 24 May 1973 AEROSPACE EEC Herr Bblkow speaks to the USA Even though the extension of the EEC this year has created the foundation of a Europe-wide aerospace industry and market—its commercial outline and current co-operative programmes have been tabulated in the foregoing pages—thecrucial challenge must still be to establish an effective relationship between the two industries for the future. The US aerospace industry is now approximately twice as large in terms of employees as is Europe's. But it is also that country's largest single exporting industry and, further still, it achieves a highly favourable trade balance. Against the background of fast deteriorating American balance of trade, this highly successful export industry must receive favoured treatment and the trade conflict between the US and Europe is likely to become sharper. Of particular interest in this situation were the remarks made by Herr Ludwig Bolkow, chairman of MBB and one of the leading personalities of Europe's aerospace industry, to a meeting of the Aerospace Industries Association of America in San Francisco last month. We reproduce his words in full below. WE ARE approaching a very important intersection at which your industry as well as our European industry and perhaps our governments will have to make important decisions with profound influence on our industries' near- and long-term future; decisions which will also have a great impact on the structure of the aircraft industries in Europe—and perhaps also in the United States—for the next 15 or 20 years. This in view of increasing costs, increasing system life-cycle times of our products and the increasing financial risk due to in creasing complexity of our programmes. These decisions are bound to take us in different directions which will prove to be sound and right, mediocre, or completely wrong for one or even all parties concerned. Let us briefly investigate the historical background, the present and the starting point for future policy and new concepts. The United States aircraft industry expanded after the war, utilising several known factors conducive to this expansion. A high level of management and tech nical ability contributed to the undisputed success of the US aerospace industry. The situation in Europe was quite different, for reasons also well known to this audience. Although Europe was successful in certain hardware programmes, particularly in the jet engine field, the Viscount and Caravelle and in certain areas of military hardware, the most outstanding success of the European industry, looking at the effort retrospectively, was the creation of joint European capa bilities in terms of development teams and facilities. Particularly during the sixties, European industry learned to plan and manage joint European projects after realising that large programmes could not be tackled suc cessfully on a national basis. This learning process was sometimes painful, but eventually successful. With the Breguet Atlantic, the Transall, the Jaguar, the MRCA, the Airbus and, at least from a management and technical point of view, with the controversial Con corde, and with several European missile and satellite programmes, we have now a large number of successful co-operations. This process should not be analysed without reference to the formation of the Common Market and its success. Both factors, the growing technical and management capa bility of the European aircraft industry and the growing economic strength based on the European Common Mar ket, are closely connected. They have brought us to a point where profound and long-lasting changes can be expected to take place, both in the environment of the European military and civil aerospace market and in the structure and general ability of the European aerospace industry. These changes are discussed both on an industrial and inter-governmental level, as well as at the EEC level in Brussels, and will eventually lead to the changes in the market and industrial environment, which I have men tioned. Let me refer to the American industry's position again at this point, before discussing possibilities of future developments. Looking at the situation from Europe, you are bound to oversimplify and even misjudge certain events. Nevertheless, it appears that the American indus try is still favoured by certain positive facts, such as a large unified home market, by hard- and well-earned national wealth, and by geographical factors. On the other hand, it has encountered certain problems, such as an imbalance of capacity and demand, partly due to the prolonged Vietnam effort, an imbalance of pre-occupation with hardware production at the expense of research and development in several areas, due to the same Vietnam effort, and in the military area through experimenting with new concepts of Government management systems sometimes carried to the extreme. From a European point of view, however, it seems more significant that the US industry has gradually become accustomed to the view that, due to the past and present position gained in the European aerospace market, US industry can expect to maintain the present European market share, particularly in the field of military and above all civil transport aircraft. I would like to present at this appropriate moment and to this very appropriate audience the European view that this opinion may prove wrong in light of recent and expected European market and industrial developments. I believe that we are approaching a decision point and a cross-road, from where we will have to seek alone or together our fortune in various completely different direc tions. One way, obviously, is for the United States to try to sell as much military and civil hardware as possible with as little European offset production participation as pos sible. Associated with this would be a policy of preventing any sale or licensing of European military or civil aero space hardware in the United States. Statements such as CAB chairman Browne's before the AIAA last year, "We don't want the Airbus over here" (even if it should prove to be an economical and reliable aircraft useful for some of your airlines?), and some of Mr Magruder's statements before the same AIAA audience would fit this policy, unless we have misunderstood these sentiments. Such a policy for the United States would seem to be attractive in view of the historical past and in view of the simplicity of the concept. I believe, however, that such a concept is bound to fail, because it disregards the changes of the European economy, the changes of the European market and industrial picture. I believe that sooner rather than later, European industry and European governments will react against such a concept of taking a one-way street. If carried to the extreme, Europe, having at least one-third of the US military and civil aerospace market potential, will react by protecting this market. Technically, this approach is possible. However, I believe that it would help no one and there is the high probability that eventually your and our shareholders will have to pay the bill.
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