British Aircraft Industry

Press, Volume CIV, Issue 30948, 3 January 1966, Page 8

British Aircraft Industry

The problems confronting the British aircraft industry are largely attributable, in the view of the Plowden Committee, to “ the difficulty the nation has “ had in adjusting itself to the decline since the war “in its relative economic, political, and military “ power ”. Successive Governments have had to consider the need for rationalisation over a vast area where industrial practice inevitably impinges on national policy. Coal and transport are almost constantly under scrutiny. The Wilson Government has lately announced plans for assisting the computer industry, under heavy pressure from its powerful American counterpart. It is thought that the survival of the British computer industry may depend on export sales being stepped up to a level warranting expansion in both the research and development fields. Early in 1966 the findings of the Geddes Committee on shipbuilding will be released. British shipyards, facing the overwhelming threat of low-cost but highly efficient foreign competition, have problems somewhat similar to those of the aircraft industry. Reconstruction of the shipbuilding industry, it has been suggested, must depend less on the injection of more public money than on company amalgamations directed to increased efficiency—and especially the elimination of yards that cannot be brought up to the necessary standard of efficiency. The United Kingdom aircraft industry might seem, at first sight, more favourably placed. In the Western world it is second in size only to that of the United States; in the last five years exports of aircraft, engines, parts, and equipment have exceeded £6OO million in value. Indeed, exports in the first nine months of this year, compared with the corresponding period in 1964, increased by 38 per cent. The Plowden Report, however, does not reflect any sanguine expectation that sales can continue on this scale. It notes, on the contrary, a continuing growth in the amount of capital employed, accompanied by a decline in profit-earning capacity in relation to capital. It notes, also, that the trend has been towards overfull employment.

The industry, in its several branches, has been employing up to 250,000 people. The Plowden Report calls for an “ arduous ” period of adaptation which will reduce waste, cut out redundancy, and consolidate staffing at a level of about 150,000. It insists, moreover, that domestic demand is insufficient to support even an industry so modified. The market, It argues, can be enlarged adequately only by close collaboration with the major European countries—not France alone, as might seem to have been implied in the 1962 agreement with the French Government for the development of the Concord. Some form of British-European grouping is seen by the Plowden Committee as virtually the only hope of meeting American competition. Even then, in the committee’s judgment, European manufacturers could not reasonably expect to compete economically with United States plants in the super-aircraft and super-weapon fields. The British newspapers, on the whole, have welcomed the idea of some form of industrial integration with Europe as offering the best prospects for the industry’s stabilisation—the key requirement being market consolidation through the creation of a joint purchasing organisation, representative of all the Western European States, to deal with civil as well as military aircraft. The rationalisation of the industry, according to a widely-held view, would then follow automatically.