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Home | Update | Latest Issue | Gallery | FR Profile | Datafiles | FR 12/97 EUROPEAN INDUSTRY AT THE CROSSROADS by Norbert Burgner The reorientation of the European aerospace industry was the main topic at the annual convention of the German Aerospace Association (DGLR). DGLR's first chairman, Dr. Rolf Stüssel, and, once again, Dasa head and designated Airbus director of the board, Manfred Bischoff, used the opportunity for a critical stocktaking. The DGLR head, in his opening speech, pointed out the determination of the US government and industry to expand and maintain the leading position in the aerospace branch, lead clear industrial politics. He continues, saying that the USA knows that Europe, due to its multi-national situation, needs lots of time to accomplish the vital restructuring process. Due to this, the USA is able to act much more uncompromising in securing the dominance in the world market. Pushed by the US government, 17 leading industrial companies of the aerospace branch were merged into three large concerns within just a few years. These three now dominate the markets. In order to achieve this, the US government has even ignored cartel considerations. With this in mind, Europe must understand that the growing dominance of the USA can not be fought by trying to block the activities over there but, through its own forward strategy. Rolf Stüssel says that finally politics in Europe seem to be picking up on the fact that a politically relevant industry branch such as the aerospace industry can not just decide on its Europeanization but, that on the way to competitive European structures, first of all the political general set-up must be found. Stüssel points out that France's current zick-zack course is hampering the process. Also, it will be interesting to see how far the French government is really willing to go, when it comes to releasing the Airbus share of government owned Aérospatiale into the "game of market and competition". Stüssel demanded that Europe must now demonstrate its capability to cope with the American challenge. It is not enough to just point out the good examples of European developments, such as Airbus, Ariane, or telecommunication and small satellites. The most important thing now is to generate a joint and harmonized European strategy that is looking far into the future: "The government is part of this competition - the US played their cards accordingly." Manfred Bischoff started his speech, saying: "Our industry is standing at the crossroads. Either we will head towards Europe or we will be left in the niche and finally left out. We want to go the way from the industrial cooperation to a European integration." Bischoff points out that the cooperation of Europe's aerospace industries is a unique story of success. Airbus and Ariane, Alpha Jet and Tornado, Hot, Milan and Roland, Meteosat and ERS and many other programs have become the synonyms of this joint development. "However, yesterday's and today's successes are not enough to build the future. Program cooperations and joint-ventures are yesterday's strategy. For the future, we will need the entry into harmonized European companies." The increasing complexity of the technology at the system level will put an increasing demand on the know-how basis. "Individual companies, even the so called "national champions", don't have this basis available or have lost it already. It is not only the German aerospace branch that has reached a subcritical level in some areas", the Dasa head takes stock. "The three American company giants Boeing/McDonnell Douglas/Rockwell, Lockheed Martin/Northrop Grumman and Raytheon/Hughes/Texas Instruments, with their dominance and profitability, are outshining everything that the European industry has ever achieved", Bischoff continues. Just for Boeing, experts forecast a turnover of $50 billion for this year. This is more than the six largest European companies can generate together. Half of this turnover, almost 25 billion dollars, Boeing has generated through government contracts. Just this hoard equals Germany's 1997 defence budget. However, Size alone is not the reason for competitiveness. According to Bischoff, it is far more important that the US companies have reached an almost ideal mix of capabilities in the civil and military large aircraft manufacture, in fighter and helicopter production, as well as, in the areas of space, guided missiles and defence electronics. Only together do the Europeans have a chance against such strong competitors. Furthermore, the time for a European answer is running out. Already today do our markets, especially the ones in central and eastern Europe, feel the new economical and technological power, along with the aggressive competitive strategies of the USA. In two or three years, once the US industry has passed the peak of its consolidation process, there will open an entirely new chapter in global competition. "For me, there is only one political lesson learned from the experiences of the recent years: If we Europeans don't overcome our political, military, and industrial shortcomings, our national egoisms, and our provincial behavior, we will loose our grounds in the global competition forever and will be pushed into the role of a junior partner", Manfred Bischoff highlighted how urgent the situation really is. He sees five waypoints on the course to an industrial Europeanization: Joint movements of politics and industry, a clear commitment of politics towards the aerospace industry, a broad Europeanization, lead by France, Great Britain and Germany, privatization, and at the same time continuation of the governmental technology funding and contracting. The basic requirements for a "European Aerospace" are: real European companies and joint European programs, European tax and social laws, European instead of national export regulations, the equation of European companies with national competitors, the balancing of the incomes and old-age pension schemes, tax and social security contributions within European companies. Bischoff says: "Daimler-Benz Aerospace's point of view is clear: we must act now and can't wait because time is working against us." He finishes, appealing to Germany: "A change is not a threat. A change is something natural and also a chance." From page 34 of FLUG REVUE 12/97 Home | Update | Latest Issue | Gallery | FR Profile | Datafiles | FR 12/97 Copyright 1997 by Motor-Presse Stuttgart. All rights reserved. Last updated November 7, 1997 FLUG REVUE, Ubierstr. 83, 53173 Bonn, Germany