The Aerospace Industry: Problems and Policies
Aerospace projects are repeatedly confronting governments with classic choice problems. Military aircraft and missiles have to be purchased for defence, and civil aircraft are required by a nation’s airlines. Should governments and airlines “shop around” for their aerospace equipment, acting as competitive buyers and purchasing from the lowest-cost suppliers? Such a policy is less likely where there exists a substantial domestic aerospace industry. Within Europe, the major aerospace industries are located in the UK, France, West Germany, Italy, the Netherlands and Sweden. Even without an aerospace industry, a nation might wish to use its orders to manufacture under licence, to “co-produce” or to acquire “offsets” which provide both domestic jobs and technology. An example is the co-production programme for the American F16 military aircraft (General Dynamics) involving Belgium, Denmark, Holland, Norway and the USA.
KeywordsEurope Marketing Monopoly Esca
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