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Home | Update | LATEST ISSUE | Gallery | FR Profile | Datafiles | FR 3/98 GERMAN AEROSPACE INDUSTRY OVERCOMES CRISIS YEARS by Norbert Burgner "The long lasting crisis in our industry is over. We are experiencing an up-current, the kind of which would have been unheard of a short while ago." This is how BDLI President Dr. Hans Eberhard Birke opened the concluding press conference of the Society of German Aerospace Companies in Bonn mid January. The record demand for Airbus products and the launch capacities of satellites have surpassed all expectations. An impressive production level has been triggered in the civil areas of aviation. Military aviation is said to be more optimistic about its future after the four nation ratification of the Eurofighter acquisition contract. In 1991, the German Aerospace Industry's (LRI) turnover stood at 26.7 billion DM. In only four years it went down by more than 11 billion DM to the record low of 15,4 billion DM in 1995. According to Birke a turnover increase of 11 per cent in 1996 (to 16.97 billion DM) had started the upward trend. For 1997 the BDLI is expecting another significant increase of 20 per cent. The threshold of 20 billion DM should then be surpassed. Last year's contracts indicate a further increase in 1998. Birke adds that the employment situation despite continued cost cutting programs has been stabilised and in some areas even improved because of unexpected contracts. Towards the end of 1996 there were 61,222 LRI-employees, and towards the end of 1997 the number will settle down at around 60,000. The companies were able to use turbulent markets post 1996 in taking their industry forward, and the rise of the dollar had been an additional support for successful reconstruction and measures to improve efficiency. This has helped to make Germany's Aerospace Industry more competitive. However, Birke cautions that this pleasing upturn in the market and the long-term expectations for air traffic to grow by 5.7 percent annually, should not obscure the fact that civil plane construction is and will remain a cyclical business. According to Birke the currency crisis in Asia, the region with the strongest growth in aviation, will not have a direct influence on the aviation industry. It should however be recognised as a general warning. What is more, price levels have slumped in the past four years. Mergers between US competitors are generating tough competition, which will exert additional pressure on prices. German and European Industries should therefore never stop striving for greater efficiency. This includes the current product offensives and European integration. Bearing this in mind Birke emphatically welcomes the declaration by the Heads of Government of Germany, France and the U.K. to create a political framework for this irrevocable process. "We need concrete political decisions to master the tasks that lie ahead of us, i.e. coping with tax laws, directives on export, border security and co-ordination of National policies concerning technologies and acquisitions." Birke drew positive conclusions about Germany's space industry. The foundation for the 21st century was laid with the successful test flight of Ariane. Europe can respond to the constant requests for a powerful launch system. Full participation in the building and running of an International Space Station is an important contribution to the technological future, safeguarding all of Germany's industries. Germany's leadership role in the Space Research Laboratory COF, positions it well for future participation in manned space programs. In this context the BDLI boss was pleased about the German Government's positive reception of the aviation research and technology program, which concludes at the end of 1998. But he demands: "Building on its success, follow-up-programs become even more important." Birke thinks that imminent action is unalterable, because there is a fundamental imbalance with regard to research funding between the USA and Europe. While the USA spent over 9 billion dollars on aviation research, Germany, France and the U.K. combined barely spent 5 billion. The USA spent 10 billion dollars on space flights, while the leading European Nations could only afford 3.6 billion dollars for this purpose. The USA is making available the sum of 16.6 billion dollars for military research and development. In Germany, France and the U.K. only a third of this amount (5.3 billion dollars) is available. "It would be unrealistic and fatal to solely concentrate on the improvement of research efficiency in Europe", Birke said. He demanded that the allowed quota (according to GATT) should be fully used in Europe and not only in the USA. "Every one per cent less is a great disadvantage to our industry. If subsidies of up to 80 per cent or even 100 per cent are permitted, and in Germany this aid is never more than 50 per cent at the maximum, then there must be something drastically wrong." Yet Birke judges that German Aerospace is in an "excellent position to play a major part in the construction of European centres of competence. The industry hosts competitive industrial structures and profits from the upturn of the new economic stability". But despite the recognisable positive tendency there is still no reason to be "too optimistic", Birke added finally. "There is room for improvement in the political area. Politics and industry must stride out together to lead this branch of industry with its fascinating technologies and their importance for the entire economy in Germany towards a successful future." From page 24 of FLUG REVUE 3/98 Home | Update | LATEST ISSUE | Gallery | FR Profile | Datafiles | FR 3/98 Copyright 1998 by Motor-Presse Stuttgart. All rights reserved. Last updated February 5, 1998 FLUG REVUE, Ubierstr. 83, 53173 Bonn, Germany