The Competitive Status of the U.S. Civil Aviation Manufacturing Industry A Study of the Influences of Technology in Determining International Industrial Competitive Advantage (1985) / Chapter Skim
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Pages 61-66
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From page 61... ...
INTERNATIONALIZATION OF AIRCRAFT MANUFACTURING Given the situation described above, it is not surprising that since the end of World War II the number of prime free-world manufacturers of large commercial transports has decreased from 22 to 5. Competitors failing to capture sufficient market share have gone out of business or mer ged into larger entities.
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From page 62... ...
Failure to form such arrangements can reduce or eliminate market penetration. The economic necessity for manufacturers to serve the total world market is conceptually illustrated in Figure 2-10, which shows representative effects on unit costs (of changes in produc250 m Z 200 ~ 0 ~ 0 8 ~ 150 ~ O — )
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From page 63... ...
A 50 percent reduction would result in a cost increase of 35 percent. If a foreign government elected to incur a cost penalty in order to establish a domestic industry that serves 25 percent of the world market, the effect would be to dramatically change the pricing and thus the profit prospects for a privately funded U.S.
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From page 64... ...
The use of consortia also has important implications for the nature of the industry itself. The major European partners i Airbus all began as relative equals in aircraft manufacture.
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From page 65... ...
The key to maintaining technological leadership is to sustain a vigorous R&D program, which generates a continuing stream of new knowledge an understanding. A particular product development extracts from that stream selected advances in technology to incorporate into the product.
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From page 66... ...
__ 1 1 1 1 1' 4=ace Industry / All Manufacturing \ \/ \' 1970 1972 1974 1976 YEAR 1978 1980 1982 FIGURE 2- 11 Financial Performance of Aerospace Industry, 1970-1983 SOURCE: Aerospace industries of America, Inc.
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