Ethnocentric vs. Regiocentric Consolidation in the Aerospace and

promoting the development of the US civil aviation industry, for example through the creation of a
transcontinental airmail service supported by a network of rotating beacons (“lighted airways”)
designed for night flight navigation in 1924 and by establishing the Civil Aviation Authority in
1938, with responsibility for “direct subsidies to promote passenger travel, economic regulation of
airlines, air traffic control, and safety” 133 . In sum, a crucial factor in explaining the global
dominance of the US aviation industry after WWII has been “a productive, decades-long
relationship among the government, the major airlines, and the aircraft manufacturers in the context
134 135
of a free-market economy” dating back as early as WWI.
In the wake of WWII, much of Europe’s once impressive aerospace industrial base was left
severely weakened. US aerospace companies, in contrast, suffered no devastation as a result of
WWII and were thus able to increase both the production and technological sophistication of their
airplanes during the post-war period. 136 137 After the Berlin crisis of 1947-1948, as the Cold War
consolidated into a long-term confrontation, the US government provided its Western European
allies with defence and aerospace equipment in an effort to help build a credible conventional
deterrent vis-à-vis the growing Soviet military threat. Initially, most of the US matériel was given
to Europe for free. In contrast, American military assistance programmes launched in the early
1950s were part of the “Cold War” rearmament effort and thus generally tied to the sale (and later
extensive co-production) of US military aircraft such as the F-104 to European countries such as
Germany. In the 1950s and 1960s, America also sold civil aviation aircraft at steep discounts to
airlines in friendly countries. While this strategy contributed to the emergence of a burgeoning
airline industry in many parts of the world, it also made these foreign airlines “path dependent” on
government-operated factories) for the production of military products. The GOCO structure is primarily used for the
manufacturing of sophisticated ammunitions in an effort to protect private contractors from potential lawsuits and
liability claims related to the adverse environmental impact of their operations. Current GOCO examples include the
Holston Army Ammunition Plant located in Kingsport Tennessee, which remains the primary source of military
explosives in the United States. Since 1999, BAE Systems (through its Royal Ordnance subsidiary) has been the private
contractor operating this particular GOCO.
133 National Academy of Engineering (1985) p. 27
134 Ibid., p. 26
135 1934 also saw “the separation of airlines from manufacturers by government fiat to increase competition and
industry development”. Ibid., p. 27
136 “In 1943, the [UK] had agreed with the [US] that the former would concentrate on developing and manufacturing
fighter aircraft while the latter would specialise in heavy bombers and military transports. The resulting division of
labour placed Britain at a commercial disadvantage after the war, for the American wartime experience was more
relevant to peacetime industrial requirements than that of the British.” Grieco (1979) p. 519
137 After WWII, the Allies moved quickly to snatch Germany’s top aerospace talents like Werner von Braun and make
them work on their own national defence programs, thus leading to a significant German / European “brain drain”. The
US Office of Strategic Services, the predecessor to the CIA, brought hundreds of German military scientists to America
as part of clandestine “Operation Paperclip”. These scientists would subsequently make crucial contributions to US
space missions, including the Saturn rockets and the Apollo programmes.
40