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Home | Update | Latest Issue | Gallery | FR Profile | Datafiles | FR 7/97 SUMMER OF DECISIONS by Wolfdietrich Hoeveler We will know more by the end of July. Then, the Federal Trade Commission in Washington D.C. will have decided on the intended merger of Boeing and McDonnell Douglas. In Bruxelles, a decision will have been made by the Commission of the European Union concerning the same issue. Boeing does not want to give in if the EU doesn't agree to the fusioning, and the EU itself will not take the merger lying down. European competition commissioner Karel van Miert particularly criticizes Boeing's long-term contracts with American Airlines and with Delta: In his opinion, these commitments block off large parts of the American market to competitors, also making the airlines more dependent on the manufacturer. Boeing's only remaining serious competitor is Airbus Industrie (AI). Americans suspect that the EU commission is using its forces to support this conglomerate of European aircraft manufacturers. These considerations are fed by arguments which were brought up by AI, as well as, by van Miert: With two thirds of the world airliner market, Boeing/McDonnell Douglas could dictate contracts, such excluding Airbus from the business. With whichever arguments Bruxelles come up with, the USA will most certainly approve the fusioning. While Boeing seems to be willing to negotiate, the government will probably not relent. This is well illustrated by the US government's recent energetic denial of the EU's suggestion to pick up the world trade talks concerning the subsidy of the airliner manufacture earlier than originally planned. The topic "indirect subsidies" is non-existent for the USA. Whatever Bruxelles' decision on this issue may look like, it is vital for Europe's aerospace industry to expand the Airbus product scale. So far, there seems to be progress. Letters of intent concerning the 100-seater have been signed with China. The A3XX and new A340 versions are under preparation in Toulouse. The European industry is sure that the monopoly of the Jumbo will be broken. This will not be changed by the barrage which Aérospatiale head Michot has started because of Dasa's and Matra's take-over plans concerning Thomson-CSF. Nevertheless, the outcome of the French elections will certainly affect the decisions concerning Thomson-CSF and the restructuring of Airbus. This, however, will also be decided in Bonn. It would not look good for Dasa's plans in France if the German cabinet, in its upcoming session on July 2nd, decides on the 1998 budget without the Eurofighter, or if Germany's commitment in spaceflight concerning the international space station and the continuation of the Ariane 5 development were changed. This would significantly weaken the position of the German industry, not to mention the loss of its international reputation, a must for cooperation. In the short-term, "only" ten thousands of jobs in a high-tech branch depend on the governmental decision, which, however, is not supported by a lobby like other industry branches are. Worse, the top brass of the unions, such as IG Metall, and the SPD leaders leave the working councils and employees of the defence and aerospace industry in the lurch. In the long-term, Germany's independence is at stake. Whoever is forced to buy equipment for armed forces in foreign countries, gives up souvereignty. But in spite of the Euro introduction or any other EU reformation the German parliament and the government are still responsible for the development of this country even though it's easier to procrastinate. Decisions are part of this responsibility, decisions that are urgently needed even though they might be not very popular for some people. From page 4 of FLUG REVUE 7/97 Home | Update | Latest Issue | Gallery | FR Profile | Datafiles | FR 7/97 Copyright 1997 by Motor-Presse Stuttgart. All rights reserved. Last updated June 4, 1997