Herald news services
WASHINGTON — Aircraft manufacturers who dominated the world market a generation ago are slipping because of unfair competition by Europe’s Airbus Industrie, U.S. manufacturing and government officials told a congressional panel Thursday.
"From the perspective of the administration, what we need to see and what we must have is a level playing field," Grant Aldonas, Commerce Department undersecretary for international trade, told the House Transportation and Infrastructure subcommittee on aviation.
Aldonas said the company is eroding U.S. dominance through inducements by European governments to buy Airbus planes, and regulatory barriers put in the way of purchases of American aircraft.
Airbus is owned by a consortium of British, French, German and Spanish manufacturers.
The U.S. government, he said, can even the imbalance through wider participation in free trade agreements to open up foreign markets. Also, Aldonas said, the government is taking a more aggressive marketing stance to "neutralize political factors in the aircraft selection process" that favor foreign government-supported companies such as Airbus.
"Our industry is being challenged by the Europeans," said Edward Bolen, president of the General Aviation Manufacturers Association, an industry trade group. "We must respond to that challenge."
He pointed to a European Union report earlier this year proposed expenditures of $93 billion to make Europe the world’s aircraft manufacturing leader by 2020.
Wilfried Schneider, Washington, D.C., spokesman for the European Commission — the governing arm of the 15-nation European Union — denied that Europe engages in undue protectionism.
"This has nothing to do with reality," he said.
British Airways, Alitalia, Lufthansa and other European carriers have substantial numbers of planes built by Seattle-based Boeing Co., Schneider said, and the Dutch airline KLM has an all-Boeing fleet. By contrast, he added, Airbus has made proportionately fewer inroads with U.S. airlines, many of which fly all- Boeing fleets.
From World War II through the 1960s, American companies dominated the skies. They accounted for 90 percent of the world’s production of jet aircraft in the 1960s, according to figures released at the hearing.
Huge Cold War military expenditures kept giants like Boeing and McDonnell-Douglas at the cutting edge of aeronautical engineering, enabling them to redesign planes for civilian use.
The end of the Cold War brought that to a crashing halt. A wave of corporate mergers brought the number of aircraft manufacturers from 25 in the mid-1980s to four today. Boeing is the only American manufacturer of large commercial jets.
Last year, the American share of world jet production had fallen to 50 percent.
U.S. airplane manufacturers export 25 percent of their annual production and still maintain a hold on 80 percent of the world’s aircraft market, Bolen said.
Bolen and the others testifying before the House subcommittee called on the government to spend more on research and development of new aircraft to keep the American industry competitive.
Federal spending on aircraft-related research and development went from $18 billion in 1988 to $9 billion in 1998 — a 50 percent drop.
"The U.S. government must play a supporting role or risk further deterioration of American aircraft production," said Rep. John Mica, R-Fla., subcommittee chairman. "Not funding these agencies and efforts is naive and destructive. It has nothing whatsoever to do with corporate welfare."
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