Going Global?

Going Global?: U.S. Government Policy and the Defense Aerospace Industry

Mark A. Lorell
Julia Lowell
Richard M. Moore
Victoria Greenfield
Katia Vlachos
Copyright Date: 2002
Edition: 1
Published by: RAND Corporation
Pages: 256
https://www.jstor.org/stable/10.7249/mr1537af
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  • Book Info
    Going Global?
    Book Description:

    The increasing consolidation of the defense aerospace industry, brought about by post-Cold War reductions in defense authorizations, has led to the proliferation of cross-border relationships between U.S. and European firms. This report examines aerospace industry globalization trends with a view toward determining how the U.S. Air Force can best exploit such trends while minimizing their risks. It concludes that further research must be done to ascertain how the advantages of globalization, such as increased competition and interoperability, can best be achieved without compromising security concerns.

    eISBN: 978-0-8330-3393-2
    Subjects: Technology

Table of Contents

  1. Front Matter
    (pp. i-ii)
  2. PREFACE
    (pp. iii-iv)
  3. Table of Contents
    (pp. v-viii)
  4. FIGURES
    (pp. ix-x)
  5. TABLES
    (pp. xi-xii)
  6. SUMMARY
    (pp. xiii-xxiv)
  7. ACKNOWLEDGMENTS
    (pp. xxv-xxvi)
  8. ACRONYMS
    (pp. xxvii-xxxvi)
  9. Chapter One INTRODUCTION
    (pp. 1-14)

    In the early 1990s, the U.S. aerospace industry entered a period of profound change and uncertainty characterized by extensive consolidation as well as by some divestiture or “demerger” activities. Beginning in the late 1990s, European industry also consolidated dramatically to the point at which leading European companies are now on roughly the same financial and technological plane as leading U.S. companies. The resulting U.S. and European “megafirms” have increasingly begun to initiate cross-border business relationships that encompass more than just trade. Most of these relationships are between U.S. and European firms, but some involve companies headquartered in other parts of...

  10. Chapter Two THE U.S. DEFENSE AEROSPACE INDUSTRY: HOW GLOBALIZED IS IT?
    (pp. 15-60)

    To analyze the implications of a globalizing U.S. defense aerospace industry for the Air Force, we must first address two questions:

    What do we mean by “globalization”?

    How globalized is the U.S. defense aerospace industry?

    In the ongoing debate over how to define globalization, some observers make a clear distinction between the process of becoming a “global” industry and that of becoming merely an “international” one. For example, Frankenstein (1996) argues that a truly global company has design, manufacturing, and marketing capabilities in multiple locations around the world, while an international company buys components and markets products abroad but locates...

  11. Chapter Three THE GLOBALIZING AEROSPACE INDUSTRY: OPPORTUNITIES AND CHALLENGES
    (pp. 61-84)

    A review of DoD and Air Force policy documents identifies three overarching objectives that motivate Air Force concerns about globalization of the defense aerospace industrial base:

    1. The need to equip aerospace forces with affordable yet highly capable weapon systems, both today and in the future (the economic and technological dimension);

    2. The need to prepare the United States, its allies, and other friends to fight future wars as coalitions (the political-military dimension); and

    3. The need to protect U.S. national security (the national security dimension).

    These objectives are not necessarily presented in order of importance, and they do not necessarily conflict. In...

  12. Chapter Four THE LEGAL, REGULATORY, AND POLICY FRAMEWORK FOR AEROSPACE INDUSTRY GLOBALIZATION
    (pp. 85-134)

    In Chapter Two, we saw that the U.S. aerospace industry as a whole is quite active in international trade and investment markets, although it is heavily export-oriented. However, the U.S. military aerospace sector is less internationally integrated than the nonmilitary sector, with less than 0.1 percent of U.S. purchases of complete military aircraft originating overseas. Is this due to U.S. superiority in military aerospace technology, design integration, and manufacturing? Or could it be that U.S. government, DoD, or Air Force policies and practices are slowing military aerospace globalization—and thereby preventing full realization of the benefits of global economic integration?...

  13. Chapter Five THE NEW CROSS-BORDER BUSINESS RELATIONSHIPS: CASE STUDY FINDINGS AND PROPOSED FUTURE RESEARCH
    (pp. 135-184)

    As noted in Chapter One, interviews and recent surveys of U.S. aerospace management views point to a growing consensus that the U.S. aerospace industry must continue to “go global” and must pursue that objective much more aggressively. Yet according to these sources—and as indicated in the preceding chapter’s discussion of U.S. government reform initiatives—industry executives often remain uncertain about what strategies to pursue and continue to be concerned about U.S. government policy barriers. For example, according to one study:

    Although globalization is viewed as an imperative, most [aerospace and defense] executives surveyed are still searching for the most...

  14. Chapter Six CONCLUSIONS AND PROPOSED FUTURE RESEARCH
    (pp. 185-192)

    In this chapter we present the principal findings of our study and describe the direction of our future research efforts. The main findings are organized into two sections. First, we consider how U.S. industry has responded to globalization, the consolidation of European industry, and other trends. Then we focus on the broader implications of these trends, particularly with regard to opportunities for expanding U.S. and European cross-border business relationships. At the end of the chapter, we identify gaps in current research that will be addressed in the follow-up report for this project.

    Numerous innovative cross-border strategic market sector agreements initiated...

  15. Appendix A AIR FORCE GUIDANCE: A STATUTORY AND REGULATORY FRAMEWORK
    (pp. 193-196)
  16. Appendix B SEVENTEEN AGREED PROPOSALS OF THE DEFENSE TRADE SECURITY INITIATIVE
    (pp. 197-200)
  17. REFERENCES
    (pp. 201-216)