On the Record With
JOHN DOUGLASS, CEO & GENERAL MANAGER, AEROSPACE INDUSTRIES ASSOCIATION

Acting on an 8% decline last year to $37.6 billion in the trade surplus generated by U.S. aerospace, America's top-level industry association is exhibiting for the first time at Farnborough to help put business back on track.

Located in the U.S. Pavilion, it has rented out space in its booth to a number of small and medium U.S. companies that otherwise would not have had the exposure that Farnborough can bring.

"We have a big team here to promote transatlantic business, and to reach out and recruit U.S. companies who are visiting Farnborough but are not yet members," said John Douglass, CEO & general manager of the Aerospace Industries Association.

AIA now has over 100 members-double a year ago-who account for 95% of the $155 billion combined revenues of the U.S. aerospace industry. More are joining at the rate of two or three a week, but Douglass says there is still $15-20 billion that is not represented.

Former Assistant Secretary of the Navy Douglass prides himself that the Washington-based AIA has been a leader in helping the industry transition from selling mainly to the U.S. Department of Defense to participating in the global economy. It helps create the environment in which U.S. companies can do business, and recently was instrumental in lobbying the U.S. government to ease its sales-strangling export license restrictions.

"This was absolutely and totally directly due to AIA's pressure on the government-and it responded well," Douglass told Show News. "I can't say enough good things about how the State, Commerce and Defense departments have come together under the leadership of President Clinton to work out this problem."

The restrictions caused a 41% drop in U.S. space exports in 1999 to $275 million, while military exports remained flat. Imports, meanwhile, rose $1.8 billion to a record $24.9 billion with Airbus, Bombardier, Embraer, and Fairchild Dornier accounting for an increase in airliner imports of $1 billion, while general aviation aircraft imports rose $749 million.

This indicates that a stronger European industry is making inroads, and that U.S. companies must counter with a better understanding of the global economy.
Increasingly, AIA is becoming the forum for both U.S. and international aerospace companies with U.S. operations to hear what the other has to say on various issues. Its international membership now includes BAE Systems, Rolls-Royce, TRW Lucas Aerospace and Interturbine, and if EADS should join, it will claim both Boeing and Airbus among its ranks.

"So its natural we'll be talking at Farnborough to our European colleagues and the SBAC about what's going on in Congress on issues that will affect transatlantic trade, and what's happening in Europe that will affect the U.S.," Douglass said.

And then there are the issues for which no solution has been found. Hushkits in Europe, lack of symmetry in FAA and JAA certification rules-and subsidies.
"Subsidies are not on our official agenda, but they are lurking as an issue," said Douglass. AIA believes all parties should abide by the current 1992 Large Aircraft Agreement until the results of a U.S. Presidential Commission next year on the future of the U.S. aerospace industry. "The commission will bring into focus the difference of views on subsidies. I suspect what you will see is a recommendation for a U.S./EU aerospace summit when the new president is in office," Douglass said.

"We're trying to avoid saying there is a right way and a wrong way to finance commercial aerospace, but for international trade to develop as it should, there has to be an agreement on a common way," he noted.

Douglass said that although some of his members believe government funding for the Airbus A3XX violates international law, the AIA is avoiding statements of right and wrong. "There are different ways things are done. Times are changing on our side of the Atlantic, and I suspect they are in Europe as well," he said.

By John Morris