Aerospace Monopolies in the Capitalist World

Aerospace Monopolies in the Capitalist World


Aerospace production is concentrated in the hands of a small group of monopolies in the main capitalist countries. The dominant position in the late 1960’s was occupied by US monopolies, which accounted for about 80 percent of total aerospace production in the capitalist world and over 80 percent of its exports. Major aircraft corporations also exist in England, France, West Germany, and Japan. In the United States, more than 50 percent of the aerospace work force is employed by six giant monopolies (see Table 1). In England, the “Big Four” monopolize 95 percent of the aircraft industry—the Hawker Siddeley Group and British Aircraft (aerospace), Westland Aircraft (helicopters), and Rolls-Royce and its subsidiary Bristol Siddeley Engines (aircraft engines). In France most of the aircraft and aerospace industry is in the hands of three companies—Sud Aviation, Nord Aviation, and Marcel Dassault. In West Germany, five companies control the industry—Vereinigte Flugtechnische Werke, Bölkow, Dornier, Messerschmitt, and Hamburger Flugzeugbau. In Japan, four companies account for 97 percent of all aircraft and aerospace production, of which 50 percent is in the hands of Mitsubishi Heavy Industries. In Italy only Fiat is actually engaged in aircraft production. Along with the specialized aerospace monopolies, companies in other industries also play an important role in the development of the aerospace industry. These include such automotive firms as General Motors, Ford, and Chrysler in the United States and Fiat in Italy and such electronics firms as General Electric, Westinghouse Electric, and Western Electric in the United States.

American monopolies are considerably more powerful than those in other countries. The six US aerospace corporations are among the 50 largest industrial monopolies of the capitalist world. Boeing alone employs more than 125,000 people, while in England the entire aerospace industry employs about 250,000 and in France, 100,000. In size of assets and number of employees, only the English Hawker Siddeley Group is comparable to American monopolies. However, in volume of turnover it does not come up to their level. The American corporations enjoy a monopoly on such important items as strategic missiles and intercontinental airliners, among others. Many aircraft companies in Europe, Canada, and Japan are licensees of the American firms. The development of Western European aerospace companies is hindered by the competition of the powerful American monopolies and by the relatively limited internal market in Western Europe. The market for the commercial aviation industry in Western Europe is 40 percent of that in the United States and for military aircraft, about 20 percent.

Competition from the American monopolies and rapid technical progress, resulting in the construction of more complex and expensive machinery, has led to a series of mergers and acquisitions among the chief Western European aerospace firms and has forced them to cooperate on various projects. In 1967 the two leading British companies, the Hawker Siddeley Group and British Aircraft, merged, as did the three West German firms of Bölkow, Messerschmitt, and Vereinigte Flugtechnische Werke. That same year, the French aerospace industry decided to reorganize to achieve greater consolidation and specialization.

The great military and strategic importance of the aerospace monopolies and the large outlays of capital required are the causes of the highly developed state monopolistic tendencies in this industry. The government subsidizes and finances production by these monopolies as well as a considerable part of their research. In the United States and Great Britain, many aircraft enterprises, built by the government during World War II, were subsequently sold to private capital on favorable terms. The government has participated extensively in reorganizing the aerospace industry in Great Britain and especially in France, where it owns the leading aircraft companies. The American aerospace monopolies are closely tied to the military establishment. Their executive boards include a large number of retired generals and admirals. For example, at General Dynamics alone there are nearly 190 former high-ranking officers.

Aerospace monopolies are powerful military-industrial concerns. Anywhere from 50 to 90 percent of their turnover is for military and space production. The largest of them act as general contractors for complex weapons systems. Among American industrial corporations, aerospace monopolies rank first as recipients of military contracts. In 1965, Lockheed was awarded military contracts valued at $1.7 billion; General Dynamics, $1.1 billion; McDonnell, $855 million; North American, $745 million; United Aircraft, $632 million; and Boeing, $583 million. Government orders for military and space technology are the sources of enormous profits. Aerospace monopolies prosper especially in time of war. In comparison with 1935, the gross income for the eight American aerospace concerns was 91 times greater in 1940 and over 210 times greater in 1945. In the period 1964–66 alone, in connection with the American aggression in Vietnam, the gross profits of the US aerospace monopolies increased 1½ times, amounting to nearly $2 billion. Aerospace monopolies are continually struggling to win government contracts, which are often awarded as a result of contacts in the military establishment and not of objective evidence. A vivid example of this was the scandal involving the largest defense contract in US history ($6.5 billion) for the production of the FB-111 military airplane. Although Boeing submitted a more economical and technically superior proposal, the contract was awarded in 1962 to General Dynamics because it was supported by several leading military figures. In the end, the airplane General Dynamics constructed cost several times more than projected and did not meet the tactical and technical specifications.

The largest aerospace monopoly in terms of number of employees is the Boeing company in the United States. First in world production of airliners, Boeing is one of the chief producers of jet transport airplanes and helicopters, as well as the famous B-52 bombers, and is the general contractor for the Minuteman weapons system. On the average, deliveries to the government constitute 50 percent of

Table 1. Largest aerospace monopolies of the capitalist world, 19661 (in millions of dollars)
 Year foundedAssetsFixed capitalEmployees (in thou-sands)Gross Income from turnoverGross profitsGross profits (in percent)Net profits
       of turnoverof fixed capital 
1 Monopolies are listed by number of employees in decreasing order
2 For 1965
3 Because of the absence of data on gross profits, only net profits are listed; percentages are of net profits to turnover and fixed capital
American monopolies
Boeing ...........19161,4455641282,3571516.426.976
McDonnell Douglas2...........19678533231241,775965.330.047
North American Rockwell .......19679665681142,6601696.429.790
General Dynamics ..........1952734286931,7971015.535.358
Lockheed Aircraft ..........1932727318902,0851105.331.359
United Aircraft ..........19341,046417821,666965.122.946
West European monopolies3
Hawker Siddeley Group (England)19359383851221,0752.26.523.5
British Aircraft (England).....196023947344481.918.08.7
Sud Aviation (France)..........195759187293090.93.72.7

its total sales and in some years 70 percent. Boeing is in the sphere of influence of a California financial group and the First National City Bank. The North American Rockwell Company, which ranks first in volume of turnover, was founded in 1967, when two corporations merged: North American Aviation, controlled by the Du Ponts and producer of rocket engines and space-flight equipment (40 percent of its production), including the Apollo spacecrafts, and Rockwell Standard, manufacturer of such items as components and assemblies used in missiles and motor vehicles.

The American McDonnell Douglas Corporation was founded in 1967 when the McDonnell Corporation, one of the leading missile manufacturers and producer of military and space equipment, acquired the Douglas Aircraft Company, which was mainly involved in producing civilian aircraft.

General Dynamics (United States) produces military and space technology almost exclusively and is one of the largest suppliers of guided missiles, military aircraft, and submarines; it is controlled by the Lehman and Crown financial groups. This monopoly is known for a number of unsuccessful projects (the FB-111 and others).

The Lockheed concern (United States), which is in the sphere of influence of a California financial group, devotes 90 percent of its production to military and space technology. One of the leading producers of strategic ballistic missiles, it is the general contractor for the atomic submarine Polaris missiles. The fighter-bomber F-104 Starfighter is produced by Lockheed’s licensees in West Germany, Japan, Italy, Belgium, and The Netherlands.

The American firm United Aircraft, controlled by the Harrimans and the First National City Bank, specializes in the production of high-power jet and turboprop engines and Norden electronic equipment and ranks second among US monopolies in the production of helicopters. It licenses subsidiaries in England, France, and Japan to manufacture helicopters.

Approximately 70 percent of production by the British monopoly Hawker Siddeley is devoted to aerospace equipment. It is also an important manufacturer of aircraft engines and other aircraft equipment in Canada through its subsidiary company de Havilland Aircraft of Canada.

According to the reorganization plan for the French aerospace industry adopted in 1967, all civilian aircraft production and all missile production would be concentrated in the hands of, respectively, the government-owned companies Sud Aviation and Nord Aviation, but military aircraft production woud be entrusted to the private company Marcel Dassault.

The leading aircraft manufacturer in West Germany is the Vereinigte Flugtechnische Werke, 35 percent of whose stock belongs to Krupp, 26 percent to the American firm United Aircraft, and 12 percent to the Heinkel family. The company was founded in 1963 when the Focke-Wulf and Weser companies merged. The E. Heinkel firm joined it in 1964. It employs 10,000 persons. Vereinigte Flugtechnische Werke jointly with French companies worked out designs for military transport aircraft; in 1967 the firm began its large-scale production for the West German Bundeswehr and the French Air Force.


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