Ethnocentric vs. Regiocentric Consolidation in the Aerospace and

More documents

Recommendations

Info

MIC Military-Industrial Complex MNC Multinational Corporation MoD Ministry of Defence MS Military Staff MTU Motoren und Turbinen Union NAC North Atlantic Council NASA National Aeronautics and Space Administration NATO North Atlantic Treaty Organisation NDU National Defense University NGC Northrop Grumman Corporation NSA National Security Agency OCCAR Organisation Conjointe de Coopération en matière d’Armement OECD Organisation for Economic Co-operation and Development ODTC Office of Defence Trade Controls OMB Office of Management and Budget OSCE Organisation for Security and Co-operation in Europe OSD Office of the Secretary of Defense OTA Office of Technology Assessment P&W Pratt & Whitney PSC Political and Security Committee QDR Quadrennial Defense Review RAF Royal Air Force R&D Research and Development R&DP Research and Development, Production RMA Revolution in Military Affairs RSI Rationalisation, Standardisation, and Inter-operability R&T Research and Testing RTD Research and Technology Development SCE Single Corporate Entity SDI Strategic Defence Initiative SDR Strategic Defence Review SEC Securities and Exchange Commission SE societa europea SIPRI Stockholm International Peace Research Institute SNECMA Société Nationale d’Étude et de Construction de Moteurs d’Aviation STP Strategic Trade Policy SWF Sovereign Wealth Fund TEU Treaty on European Union TRP Technology Reinvestment Programme UAV Unmanned Aerial Vehicle USAF US Air Force USG US Government USTR US Trade Representative VS VoiceStream WEAG Western European Armaments Group WEAO Western European Armaments Organisation WEU Western European Union WJC World Jewish Congress WMD Weapons of Mass Destruction WTO World Trade Organisation 10
Chapter 1: The Aerospace and Defence Industry in a Globalising World 1.1 What this thesis is all about In my PhD thesis at LSE I analyse the consolidation of the American and European aerospace and defence (A&D) industries in the late 1990s. Based on two case studies – the 1997 Boeing / McDonnell Douglas (BMD) merger in the United States and the creation of EADS (European Aeronautics Defence and Space Company) in Europe in 1999 – I set out to to answer the following questions: Why did the Americans consolidate their A&D industry at a purely national level, with virtually no involvement from other Western allies? By contrast, why did the French, Germans, and Spaniards decide to merge their leading national A&D companies into EADS? What do these two case studies tell us about the potential for competition and cooperation in international relations (IR)? Are national security concerns the real reason or just a convenient pretext used by policymakers and business leaders on both sides of the Atlantic to justify the treatment of the A&D industry as a “special” sector? The A&D business has three key characteristics that make it a strategic industry: “(1) it produces goods or services directly related to national security; (2) it generates special benefits for the rest of the economy; and (3) it is prestigious.” 1 As a result, the A&D industry has traditionally been characterised by a high degree of governmental control and intervention. In this context, it is important to differentiate between the commercial and the defence side of the aerospace sector. In particular, what is the exact status of the commercial aerospace industry? Is it part of the private sector in an open economy, or is it rather intricately linked to the public sector because of its Research and Development, Production (R&DP) overlaps with military aviation construction? This thesis explores whether neo-realism or neo-liberalism offers a better explanation for the BMD and EADS mergers under review. In particular, it argues that the two case studies suggest that transatlantic rivalries over the political, military, economic, and technological power and prestige derived from the A&D industry exist even among close Western NATO allies. The thesis concludes that the BMD and EADS mergers can best be explained by the fact that realist arguments prevailed over liberal-institutionalist arguments among policymakers and business leaders in the countries involved, especially in Washington and Paris. With the A&D industry caught between two very 1 Golich (1992) p. 910 11
Page 1 and 2: THE LONDON SCHOOL OF ECONOMICS AND
Page 3 and 4: Abstract This thesis relies on real
Page 5 and 6: The final word of gratitude goes to
Page 7 and 8: 6.4 Growing US unilateralism and th
Page 9: EEA European Economic Area EEC Euro
Page 13 and 14: status vis-à-vis all potential cha
Page 15 and 16: The cooling in transatlantic relati
Page 17 and 18: Even though America and its Europea
Page 19 and 20: acquisition of MDC - the smallest o
Page 21 and 22: 1.2 The economic and strategic impo
Page 23 and 24: Virtually all of these industry dyn
Page 25 and 26: Aerospace companies also deliver si
Page 27 and 28: Unless we act soon, we may find tha
Page 29 and 30: interdependent relationship between
Page 31 and 32: The increasing importance of techno
Page 33 and 34: 1.3 The consolidation of the US and
Page 35 and 36: “A cursory look across four facet
Page 37 and 38: procurement agency within the Minis
Page 39 and 40: 1.4 International collaboration and
Page 41 and 42: US aerospace companies. 138 As a re
Page 43 and 44: had managed to replace MDC as the w
Page 45 and 46: “It is both morally and political
Page 47 and 48: important political dimension. Toda
Page 49 and 50: International anarchy means that th
Page 51 and 52: turning it into a US-dominated acad
Page 53 and 54: Unipolarity can be a very stable 19
Page 55 and 56: competitiveness declines and it wil
Page 57 and 58: It is striking to note that success
Page 59 and 60: for pre-contract award procedures r
Page 61 and 62:
increased economic scale and effici
Page 63 and 64:
autonomy as a result of unequal tra
Page 65 and 66:
notwithstanding. The third benchmar
Page 67 and 68:
Despite public pronouncements in su
Page 69 and 70:
of international law: yesterday tho
Page 71 and 72:
deeply-entrenched reliance on (conf
Page 73 and 74:
Let’s turn to neo-liberal institu
Page 75 and 76:
exemplified by the BMD / EADS merge
Page 77 and 78:
isk, high-stakes environments are m
Page 79 and 80:
It is obvious that liberal institut
Page 81 and 82:
politics, including human rights an
Page 83 and 84:
generic. But many national security
Page 85 and 86:
(such as rules and models) that def
Page 87 and 88:
esurgence than the newly-liberated
Page 89 and 90:
political coordination at the gover
Page 91 and 92:
Germany have not only a bilateral
Page 93 and 94:
process of interest is ‘transpare
Page 95 and 96:
thus promises particularly useful i
Page 97 and 98:
are particularly common. 337 As a r
Page 99 and 100:
Finally, this methodological sectio
Page 101 and 102:
“There are no fixed recipes for b
Page 103 and 104:
Chapter 3: The Boeing / McDonnell D
Page 105 and 106:
4.7 percent of GDP. Yet even at the
Page 107 and 108:
F-22 production line closes, Boeing
Page 109 and 110:
3.2 Corporate strategies to deal wi
Page 111 and 112:
from potentially aggravating milita
Page 113 and 114:
3.3 “The Last Supper”: how the
Page 115 and 116:
aseline year, clearly distorted the
Page 117 and 118:
primes also raised alarm, especiall
Page 119 and 120:
administration’s volte-face took
Page 121 and 122:
ethic” 464 that dominated the thi
Page 123 and 124:
3.5 Boeing, McDonnell Douglas, and
Page 125 and 126:
with Boeing’s sheer size and corr
Page 127 and 128:
its leadership position compared to
Page 129 and 130:
Prior to Boeing’s take-over, MDC
Page 131 and 132:
Furthermore, Boeing hoped to levera
Page 133 and 134:
After the Americans realised in lat
Page 135 and 136:
FTC’s unconditional approval of t
Page 137 and 138:
transnational R&D and production st
Page 139 and 140:
civil and military aircraft manufac
Page 141 and 142:
In the military aircraft domain, in
Page 143 and 144:
Most of the defence projects were b
Page 145 and 146:
greatly extended the range and scop
Page 147 and 148:
In 1983, UK Defence Minister Heselt
Page 149 and 150:
NATO” 616 , a not-for-profit orga
Page 151 and 152:
4.2 The failed EADC 632 and BAe / D
Page 153 and 154:
Finally, EADC’s shareholder inter
Page 155 and 156:
With combined annual revenues in 19
Page 157 and 158:
(#1), and missiles (#2). Furthermor
Page 159 and 160:
Finally, EADS’s Defence and Civil
Page 161 and 162:
4.3.1 Aérospatiale Matra (AM) AM w
Page 163 and 164:
4.3.2 DaimlerChrysler Aerospace AG
Page 165 and 166:
4.4 The Galileo Global Navigation S
Page 167 and 168:
[T]he military implications of Gali
Page 169 and 170:
compatible with national security,
Page 171 and 172:
lost ground in Afghanistan, Russia
Page 173 and 174:
France - backed by German financing
Page 175 and 176:
and the combat systems that go on t
Page 177 and 178:
industry restructuring caused certa
Page 179 and 180:
Chapter 5: Going American: Explaini
Page 181 and 182:
Washington embraced the ethnocentri
Page 183 and 184:
More recently, EADS / Airbus teamed
Page 185 and 186:
sensitive US technologies 832 and e
Page 187 and 188:
5.2 Growing foreign dependence of t
Page 189 and 190:
need to be achieved during a relati
Page 191 and 192:
Technology” in 1990 to analyse
Page 193 and 194:
their sovereignty but also to vital
Page 195 and 196:
However, with the deterioration of
Page 197 and 198:
5.3 The rise of economic rivalries
Page 199 and 200:
which military conflict between maj
Page 201 and 202:
European relations, especially in d
Page 203 and 204:
5.4.1 The DaimlerChrysler merger:
Page 205 and 206:
ankruptcy or swallowed by one of it
Page 207 and 208:
Regulatory approval for the deal wa
Page 209 and 210:
5.4.3 Deutsche Telekom’s take-ove
Page 211 and 212:
commitments in the WTO and would af
Page 213 and 214:
5.5 Moving both towards and away fr
Page 215 and 216:
the UK, France, Germany, and Russia
Page 217 and 218:
Chapter 6: Building Europe and Bala
Page 219 and 220:
1966. 1036 1037 It was not until th
Page 221 and 222:
Going into the Maastricht negotiati
Page 223 and 224:
The 1995 election of President Chir
Page 225 and 226:
Bulgaria be part of NATO’s first
Page 227 and 228:
Europe needs strengthened armed for
Page 229 and 230:
While the Americans dominated the a
Page 231 and 232:
illicit and dangerous transfers of
Page 233 and 234:
“This is not fundamentally a prob
Page 235 and 236:
In July 2004, the European Defence
Page 237 and 238:
1183 Ibid. collectively. And, of co
Page 239 and 240:
using the “Three Ds” language.
Page 241 and 242:
administration’s freedom of movem
Page 243 and 244:
decision that made America - especi
Page 245 and 246:
so one expects to find conflict”
Page 247 and 248:
candidate Nicolas Sarkozy even made
Page 249 and 250:
companies win crucial multi-billion
Page 251 and 252:
aircraft business in the early 1980
Page 253 and 254:
Mercantilists, by definition, are g
Page 255 and 256:
slowly wither and die in the face o
Page 257 and 258:
Despite these rather dramatic indus
Page 259 and 260:
defence-related industry has experi
Page 261 and 262:
persisted because of “inaction”
Page 263 and 264:
European economic and military stra
Page 265 and 266:
In April 1998, the French, German,
Page 267 and 268:
EADS) were already cooperating thro
Page 269 and 270:
The initial merger discussions betw
Page 271 and 272:
(in the case of privatised companie
Page 273 and 274:
7.3 Britain and the US Defence Mark
Page 275 and 276:
take-overs of Tracor and AES / Sand
Page 277 and 278:
To this day, America has failed to
Page 279 and 280:
Chapter 8: Conclusion This thesis u
Page 281 and 282:
armaments cooperation. Even more im
Page 283 and 284:
In Europe, the transnational EADS m
Page 285 and 286:
easy for key EU members like France
Page 287 and 288:
Finally, realism can also account f
Page 289 and 290:
coordinated response to ensure the
Page 291 and 292:
GAO’s decision” 1385 . Just a f
Page 293 and 294:
Annex Table 1: Economic Weight of t
Page 295 and 296:
Table 4: FY1987-FY2007 DoD Budget A
Page 297 and 298:
Interviews: Cohen, Eliot, Robert E.
Page 299 and 300:
BBC Monitoring Europe, „EU, Franc
Page 301 and 302:
Chao, Pierre and Niblett, Robin,
Page 303 and 304:
Doyle, Michael, “Kant, Liberal Le
Page 305 and 306:
Giegerich, Bastian, “Navigating d
Page 307 and 308:
Holmes, Kim, “US-European Strateg
Page 309 and 310:
Kolodziej, Edward A., “Making and
Page 311 and 312:
Maynard, Michelle, “Daimler consi
Page 313 and 314:
Neuman, Stephanie G., “Defence In
Page 315 and 316:
Robertson, George, NATO Secretary G
Page 317 and 318:
_____, “Telekom faces FCC hurdle
Page 319 and 320:
US Arms Control and Disarmament Age
Page 321 and 322:
Operations, US House of Representat
Page 323:
Willcock, John, “DASA remains pri
show all

Ethnocentric vs. Regiocentric Consolidation in the Aerospace and

You also want an ePaper? Increase the reach of your titles

Delete template?

Save as template?