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THE PRESENT ENVIRONMENT 53 principal aircraft prime contractors and assemblers. No matter what role Japan chooses to play, it must be regarded as a potent force in helping to shape the structure of the global industry in the decade of the 1990s and into the next century. U.S. Content in Foreign Aircraft The emergence of powerful foreign competition is not without its opportunities, especially in the sale of components and subsystems. Despite the desire of the Europeans to use their component and subsystem technology in the Airbus A300, many components throughout the plane (auxiliary power units and avionics are examples), as well as major parts of the U.S.designed jet engine, come from the United States9 However, this situation is changing. Airbus management is replacing U.S.supplied components with European components where possible and practical, and the effort will be intensified on the A320. At present the European component industry is small compared with that of the United States The panel believes it is competent but relatively high-priced. The industry could replace U.S.-manufactured equipment in foreign-built aircraft, should the policy decision be made to do so and capital invested. U.S. components in other classes of aircraft also represent a significant part of the assembled vehicle. In addition to engines, the flight controls, radios and navigation systems, and aluminum for the skin are generally provided by U.S. manufacturers. The long-term concern is that the acquisition of significant airframe market share by foreign manufacturers will result in greater foreign interest and activity in the components market that could displace U.S.- manufactured products. Examples of this expanding interest are the involvement of Japan and France in large jet engines; of England, Italy, Japan, France, and Canada in small turbofan engines; and of France, West Germany, Italy, and Japan in avionics and controls. Furthermore, with the formal launch of the A320, the sponsoring governments (France, Great Britain, West Germany, and Spain) also agreed in principle to strengthen Europe in the A320's subcontracting and component supply. The most critical step in maintaining U.S. leadership in components is to preserve its lead in total aircraft system concepts, design, development, and integration. This kind of leadership is heavily dependent on launching new aircraft at reasonable intervals. Without this leadership in systems, the future of the U.S. components industry, as it relates to civil aircraft, could face much more severe competition than has been the case heretofore. Military systems provide some relevant experience, but commercial requirements are sufficiently different that a direct
