Hold the Rhetoric and Stimulate the Transatlantic Aerospace Industry     Print Email
Thursday, 02 April 2009

Whether or not the world’s financial crisis is successfully managed will depend on the ability of America and Europe to work together effectively.

This is the first REAL transatlantic test since WW II. The last six decades have been mini-tests of competition leadership, image, Old Europe, New Europe, Super Power, Cold War, NATO, deregulation, labor, engineering prowess, and distractions, such as “Freedom Fries”.

Transatlantic adolescence has created technical competence, industrial parity, financial sophistication, political integration, and global leaders. Looking back, the spats and frictions, posturing, complaining, and the pundits’ debates all seem grossly insignificant and even inappropriate. The jousts on the fields of commerce and politics were tests of the “knights” awaiting the real battle.

The real battle is now! The numbers that will be debated at the G-20 are staggering! The possible consequences are frightening. We are going to see stimulate, spend, borrow, hope.

The test is now whether America and Europe can provide the global leadership necessary to reconstruct the banking system, create jobs and investment, maintain global security, and sustain a quality of life and the confidence of markets.

Perhaps the most dramatic example of a strategic industry that is vital to both Europe and the U.S. is… Aerospace.

The aerospace industry was literally invented and developed across the Atlantic. It may well be THE most important business segment for national security, job creation, capital investment, technological advancement, global trade development, and national prestige.

The maturing of this industry has resulted in a handful of major players with corporate flagpoles on both sides of the Atlantic.

The last two generations have seen annual “air show jousting” over relative market share and technology “one-upmanship”. The U.S. and Europe have been keenly tracking who is pulling ahead or falling behind in this dramatically growing marketplace. Today’s events make this now seem almost trivial.

Governments are the largest customers and global airlines purchase billions in sophisticated aircraft. Governments this week will be talking trillions for “stimulus”.

The future of the transatlantic alliance is not assured. The unintended consequences of bank collapses and credit crunches, protectionism, pressure on capital intensive investments, lack of next-gen engineering resources, and reduction in military spending could put the entire industry into a tail spin.

TRANSATLANTIC STIMULUS of the vital aerospace sector must focus on issues much broader and much more strategic than feuds over what loans were made, who got the tax breaks, and who gamed the Research and Technology contracts.

The comparative commercial superiority of either the U.S. or Europe will be measured “on the margins”, and the competition is healthy, robust, emotional, and a benefit to consumers, war fighters, and governments. The real focus of “stimulus” should be on the “core” of aerospace, i.e. preserving the strategic capabilities, jobs, research, systems integration, design engineering, and shared technologies necessary to keep the transatlantic leadership of aerospace.

Rather than complaining about the relative market share, the U.S. and Europe should develop mechanisms for continued (and expanded) government investment in aerospace development programs. These investments are not just “shovel ready”, they are now “shovel busy”. Immediate stimulus is created (on both sides).

Because the aerospace supply chain for both America and Europe has significant impact on transatlantic jobs and commerce, stimulus of this supply chain benefits all. Keeping momentum in development programs is critical. Protectionist rhetoric must remain politics, not policy.

The transatlantic parties must take inventory of any and all potential barriers to their effective global leadership….and then promptly remove these barriers before they poison the ability of the U.S. and Europe to solve the really important problems.

Problems that, frankly, cannot be solved by anyone else.

Allan McArtor is Chairman of Airbus Americas, Inc. This is the maiden op-ed in the new “Perspectives” page of European Affairs.

See also these European Affairs articles on aeronautics industry competition:

U.S. Flap on the Aerial Tanker Could Be Self-Defeating by Robbin F. Laird, President, ICSA, LLC

Don’t Expect the WTO to Resolve the Boeing-Airbus Dispute By Robert Herzstein