JPRS ID: 9387 WEST EUROPE REPORT SCIENCE AND TECHNOLOGY

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- JPRS L/9387
7 November 1980
West E u ro e Re ort -
- p p
SCIENCE AND TECHNOLOGY
CFOUO 13/80)
_ FBIS FOREIGN BROADCAST IiVFORMATION SERVICE
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JPRS L/9387
_ 7 November 1980
- WEST EUROPE REPORT
SCIENCE AND TECHNOLOGY _
(FOUO 13/80)
CONTENTS _
ENERGY
~fforts To Commer~ialize Solar Heating Discu:,sed
(REWE DE L'ENERGIE, Aug-Sep 80) 1
TRANSPORTATION -
Objectives, Programs, Plans of Auto Zndustry
(IL SOLE-24 ORE, 4 Oct 80) 7
Use of Composites in Aircraft Induatry
(AIR & COSMOS, 13 Sep 80) 23
Dowty Composite Propellers
Bristol Composi.te Materials
A-310 Aileron
- a- IIII 151 S&T F4U0]
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ENERGY . .
FFFORTS TO C01~4IERCIALIZE SOLAR HEATING DISCUSSED
Paris REWE DE L'ENERGIE in English Special Issue Aug-Sep 80 pp 34-42
[Excerpts]
in the case of FranCe, preat e(forts have been mad~e~ to - I~creased financial support from the state has
solar heetln~ In dwellings and to use of blomasa to~ been accompanied by closer supervision of the direction
enerfly purposes. (t is in these sectors where the moet or even the content of the final research by the ministry
significant contributlons of new ener~y sources to mee- responsible tor energy matters.
ttnq enerqy requMsment$ between now and the ye~r
2 000 wlll be made. Another prlority is to maintain soTar In 1978, this supervision at ministerial level resulted in
research at a hi~ht level. This has mainly resulted in creation of the commissariat a I'Energie solaire (COMES�
construction of a 2 MWe solar termodynamic test centre Solar Energy Commission), Which is responsible for
_ coordinating, spo~soring and preparing all solar activi-
(Themis) and by increased aid in the field of phc;ovoi~~ ties in France. In 1979, COMES's scope of activity was
taics. extended to include biomass, while in 1980 budget pro-
� cedures for research aid were redeflned.
Research and experimPntation efforts devoted th~s
sector have thus been developed to a consid~ ~able Apart from the transition from Utopian theorizing tc
extent both in France and in most industrialised : oun~ economic reality, this development corresponds to the
tries : gradual definition of an industrial policy in tgrms of
energy targets, technological channels and developme+~t
The French solar budget increased from more than 50~ procedures and conditions.
million francs in 1975 to more than 400 million fran:s in
1980 (2).
The difficulty of making international comparisons is
illustrated by this table, prepared by the EEC. _ . _ . _ _ . _ _ _ _
If this development is analysed, two phenomena can M~rket development ~ _ _
be observed :
As opposed to tradltional energy sources, for which
If this development is analysed, two favouring experi� most decislons are made by national-sized companies, '
mentation, rather ~than research, to an ever-increas~ng for wich the publfc authoritfes can implement a volunta-
extent : rist policy, investment decisions for most renewable
energy sourcea are taken under local or even indlvidual
responsibility : the state 's actlon can only be a policy of
1975 1978 1979 1980 incent/ve. These incentlves are necesaary, but this poliey
- ~does not conslst only of reducing the apparent cost of
Research 90 % 75 % 65 % 54 �/a lenergy for the user.
Experimentation 10 % 25 % 35 % 46 %
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French industrialists place great importance on trai-
ning and information, and also on the principle that the
state sets an example in development of the market, with
fts own orders.
Les condicions du developpement des ven~es de I'encreprise ( I)
Corpora~e sales develupmen,t conditions (I)
Prioritaire [mportance
Prruril r Intpvrlance
Forte Moyenne Faible
- Lurxe Medium Smu!!
Reduire les couts de production 36 Z4 45 21
Reducting pro~uc~ion cos~s
Reduire les prix de vente 38 ?7 43 3U
Reducting sa/es prices
Croissance generale du Marche 75 76 I S 1 U
genera/ marker gro w~h
F'ublicite de I'entreprise 21 36 SR 6 I
Corporaee adver~isrng
Implanter dans un reseau de dis~ribution 31 47 29 24
Establishmenl in a dislribution and sa/es ne~-
work
Ameliorer les produits '2 46 34 20
Products improvement
Rechercher de nouveaux produits ~y 4U i7
New product research
Former des installateurs 31 57 30 14
Training fitters
' Proapection commercial 31 S~ 30 14
Sales prospection .
Assurer un service apres-vente g ~ 38 ~g
~ Afer-sales service
_ Asaister les installationa 51 23 26
A.asistant provided to fitters
. Assieter les concepteurs 14 36 36 Z1
Assistant provided to designers
Augmenter les aides publiques 41 ~9
Increasing public aid
I
Enqu~te du CSTB
( i) CSTB (French Scientific and Technical Building Center) Survey.
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Les f'reins du developpement du marche
- Curbs vn mvrket development �
Importance
lmportance
1Vature Prior;taire Forte Moyenne Faible
Nature Prioritv Large Medium Sma!l
Regles d'urbanisme inadaptees 22 31 44 25
Paorly suiled town-planning rules
Rbglements techniques inadaptes 4 31 44 25
Poorly suited technica! regula~ions
Proc~dure administrative lourde 12 51 43 6
Cumbersome administrative prvredures
Materiel complemen[aire inadapce aux cap-
teurs solaires 13 7 41 52
Additional equipmen~ nu[ suited ro sular rul-
lectors
Cherte du materiel solaire d~ 65 18 l8
High cost oj solar equipment
Qualite et durabilite insufiisante au materiel
solaire 12 22 44 34
InsujJicient qualrty and durabilily oJ~ svlur
equipement
Produit inadapte au climat 17 13 33 53
Product not suitable to climate
Absence de normalisation des produiis 5 25 34 41
No product standardization
Aides financieres publiques insuffisan~es 54 64 12 24
lnadequate public jinancial ard
Constructions solaires publiques insuffisan~es 47 58 27 15
InsujJicienl public solar projects
Regime contraignant d'Assurance-
construction 17 17 41 4l
~ Prohibitive building insurance system
Resistance des architectes l4 39 45 15
Resistance oj part oJ architechts
Formation insuffisante des installateurs 20 49 26 26
Inadequate training ojJitters .
Circui[s de distribution inadapte 4 38 34 28
Poor(y suited distribution circui~s
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1?/~PI /~TTTI~T ~ T ?~l'~T l~1TT \I
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Informa~ion insuffisan[e du pubtic 30 49 26 26
Insujjicient public injormation
Con~re publicite des realisations defectueuses 25 47 25 28
Adverse publicity from fautiy proje:ts
Constructions solaires privees insuffisantes 24 56 24 21
lnadequate priva[e solar projects
Les utilisateurs expriment un point de vue voisin, dans Useers express a similar viewpoint in a survey madc
_ une enauete sur une revue de consommateurs (1) by a consumer re~iew (4). ~
Ubstacle au developpement de I'energie solaire
Ubs~urles ru solar ener~y develupnrent
lmportan~ Mediunr Luw
~Jo �lo %
. unque d'in jornra~ivn 82 8 I D
[_,rck oJ injonnation
- Cout du p?oduit 77 11 12
Produc~ cos!
Ins~.affisance des aides de I'Etat 70 16 14 ~
~ I~rsujficien~ Stade aid
I,eniabilites inceriaines ?U 2R
. C~ncertain relurns
i
Manque de faisabilite des installationti cxistan~c5 2y 45
Lack oJ relrabili~y in exis~ing instulluriuns
Les objecrijs G'enrreprise l~upurrunce
Corporaled aims l~~r~~ur~unre
f'rieiri~airr I~c~rte Mc~yenne Faible
Pivur�i~? Nigh Mediu~rt Lo?+~
Maximiser la rentabilite de la produrtion 39 54 28 18
To maximrse produc~iun prufi~ubilitv
Maximiser la part de marrhe de I'cntreprise 37 41 49 11
To maximise ~he canpan v's shure uf ~he ~nur-
_ ~.ef
Diversifier les activites de I'entreprise 52 36 36 28
Tuiversijy corpora~e acrivities
f'restige et image de marque de I'en~reprise 47 45 28 28
CorporQ~ed pres~ige and brand iirrage
Assurer les debouches 17 35 30 35
Tu ensure ou[lets
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~ Assurer une vieille cechnologie 42 59 19 22
To achive a technologicd! advance
It Is interesiing to note that, in accordance with fhta archirecture. A prrt o! rhis budpet is devotsC to ~ proc~dur~ by
same survey, approwlmately 25 % of consumers state which locel aufhorlt/es or lndustrJss cen roqu~st th~ Comm/~�
_ that they are ready to pay over 10,000 French francs for a saiiat A~'Ens~yre Solaire ro shaie, on s 50-50 % basis, rh~ cost
solar water heater, whereas economic calculations show ol /easibillty stud/ea lor the sofarizeflon ol pubUc buNdlnps
that at this price, the time needed to amortize a solar (scholls, hospirels, campings, erc...). The rosrs qoes to granrs,
water heater with additional electric heating is un~oub� "'hich depend on rhe quality and the technical interest ol the
tedly longer than ten years, i.e. much longer than the demonstrarion. The Commissariat A I'EnerQle Solaire has srer-
ted a decentraNzaNon policy, and creats local "so/ar lunds",
- time normelly allOWed for energy equipement : the amOr� through 50-50 agreements with regronal, provinc~al or municipal
tization time for energy saving projects is usually from authorities, in order to associate the local decision�mahers to
three t0 five years. our nafional poNcy.
THE INCENTlVES FOR SOLAA HEATING !N FRANCE Finally, an educatlon poNcy lor the pro/essionals (plumbers.
e/ectricians, heating specislrsts) is beinfl impfemented : the
!n the part months, many new measures have been taAer ~0 9oal is to tra/n between 1 000 and 2000 professionnals every
promole so/ar heating in France. Most ol them deal with sa~i� year, through 20 regional instructlon centers.
rary water heatinq, lor obvious economical reasons, but sp~ce
heating receives an increasing attention. The actions that ,:re
~mplemented depend on three basic principles When all thesa measures are in full operation, more than 50
mll!!on dollars wlll be yesrly devoted to incentives qrants and
(i) An attractive /oan system, which linal/y resembles to a ~oans, aslde lrom the A 3 0 budDet. !t should bs also stated ihat
"so/ar banA eneigy conservatlon and rsnewsble energy materla/s can be _
deducted Irom the income o/ esch Irench /amily, wlth a yearly .
(ri~ A natron�wide agressive solar demonstratlon policy.
ce~ling o~ about 1 500 S~ thls is nor a tax credr~, but a reduction
(ili/ A proqressive trans/er ol the decisions and the correspon� !o the taxable esset.
ding subsidies, Irom tAe central to the regiona~ and locel autho-
rilies. especially lor fhe sofarization ol public buildings, the _
educalion ol the pub/ic and the training ol the prolessionals.
- Loans cover ma~n/y the resrdentiaf solar water heaters : lor
~nstance, partmen~s and houses bur/t under oui socia! housrng
schemes (moie ~han hal! ol the 400 000 dwellings built every
_ year in France) benelit lrom a/ow interest (8 loan cove~ing -
abouf hall ol the cost ol the heater and extending over a 15/30 -
years period. Furthermore, lor those dwellrngs which are elec-
tr~cal/y heated, the other hall may also be cove~ed by a more
complex mechanism, which linally leads to a zero�lnterast-rate NEW ENERGIES AND JOB CREATION
loan over 10 years. For 1980, it is anticipated fhat these measu-
res may cove~ 10 � o ol the new dwellings i.e., about 40 000. The Many developmenl projects concernrng renewable energles
cost ol ?his pr~cedure wNl probably implayayearly amount ol 20 are l~nanced by the Administrat~on in France as in o~her coun-
l0 25 miUion dollars ol /oans. mes. These pro/ects are sponsored as parf ol programs a~med
� al ~nduslrral deve/opmenf, decenfralizafion, cooperation wifh -
Demonstrarions are linanced both by loans and grants. For deve~op~ng countnes or ~ob creaf~on.
instence, a recent ieques~ lor proposa/ deals whith an order ol -
5 000 so/ar�heated houses over the 1980/82 period : it is, to my G~ven 1he present overall s~tuatron, the last-menfioned point
tinow/edge, fhe /argesf singfe solar space heating operation ~s o/ spec~al ~mportance. !n thrs way, fhe French povernment's
lauched !n the world. The estimated loan per dwelling (always aims ~n the so/ar enerqy and bromass sector will mean the crea�
at 8�io and over a 15/30 period) lies around 6 000 dollars, which l~on ol 40.000 ~obs befween now and 1985.
brings Ihe fotal ol this demonstration project to 30 milllons dol-
lars. Furthermore, another p~o%ect where 50 % g~ants ere given Aparr lrom ~he lacl the /obs crealed olten concern industrie!
lo solar heating ol public swimming pools : 26 0l them should sec~ors ~n drlllcu/t~es, and fhaf they ere decentrallzed and /oca�
De in operation fhis summer. Another request lor proposa/ ted ~n rural or post�urban env~ionmenfs, involvinp economically
deals with seasonal storage : more than 2 million dollars o1 underpr,vileged reg~ons, lor the same investment, more jobs are
grants will be devoted to experlmental systems. prov~ded ~han 1n mos~ other industiia/ sectors.
Another budget of nearly 5 million do/lars should subsidize
rndividualized requesfs lor demonstrations, inclunding passiva
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D~re~i or rndirect /obs 1 billion dollars (United Statt~s)
Biomass . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . z8 004 (1)
_ Energy savings in housing . . . . . . . . . . . . . . . . . . . . 35 900 (1)
Energysavings in industry ..........300a0(1)
Solar energy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 000 (t)
Nevti building 34 100
W i nd power . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 800 (2)
Photovoltaic conversion . . . . . . . . . . . . . . . . . . . . . . 2~ 5U0 (2) _
Ho~,sehold elect~ ic appliances . . . . . . . . . . . . . . . . 28 70G (2)
- pii refinery . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 400 (2)
Maximum ~ermissib/e price for a so/ar water heater -
Less then 5 Q00 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37 %
Between 5 000 fi 7 000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 %
Between 7 000 ~ 10 000 . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 %
Over 10 000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 % -
This uneconomic attitude is probably a result of both
increased sensit+vity to and awareness of ecological pro-
blems and anwiety over the energy crisis. However, it
would certainly be necessary to ma~:e a distinction bet� !
ween opinions of potential users and the opinions of the
effective dccision makers... -
ln actual fact, a great effort is needed for i~dustrial
deveiopment of renewable energy sources. In France. it -
is consi~+ered that in order to reach the targ2ts set for
19~5 (5~, nearly 5 billion francs in incentive loans wilt
have to be granted in 5 years.
If this kind of effort is 5mall with regard to the oil b~ll~ ~t
may seem considerable ~n view of the energy contrrfsu.
;~ons expected. But the interest of renewable ener.~y
~ources in the short and medium-term, unlike traditionai �
energy sources, ca~not be gauged only on the basi5 of
petroleum equivalent tons. The economic importance of
renewable energy sources, which has no common st~n�
dard with their energy contributions, has to be evalua~sd
using other criteria, especially with regard to regional
development, creation of employment and cooperation
with d'eveloping coun4ries. Moreover, it is on this basis
that solar programs are financed.
In the same way, development of renewable energy
sources contributes to replacement of hight energy ccn-
suming industrial activities by activities consuming less
energy or even oroducing or generating energy (b~o�
industry, agricultural and food industry, etc).
CSO: 3102
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_ TRANSPORTATION
OBJECTIVES, PROGRAMS~ PLANS OF AUTO INDUSTRY
Milan IL SOLE-2� ORE in Italian 4 Oct 80 p 3
[Text] Point by point decisions (goal~ and channels
, for action) in complRted automotive industry
program. Future of ltalian auto industry
~ hangs on innovation. Time is running out in
the race for international competitive status.
How to stop share-of-market losses in i:urope.
- Action under PL 675 deemed inadequate. Prac-
tical steps to boost productivity, streamline
' comp4nent production and design, and support
research and development.
I. How Serious Is the Crisis?
The problems besetting the troubled Italian automotive industry
were covered in the report released in March 1980 by the study
commission set up in the Interministerial Committee for Indus-
trial Policy Coordination (CIPI). That analysis showed that _
the Italian autoraotive industry had been.steadily losing ground
through the seventies in its share of world, European, and domes-
tic markets. The decline was slight at first, but gained momen-
tum by mid-decade: we stand now where we did in the ~ixties, -
before the great 10-year leap toward modernization in the indus-
try. That loss, the report concluded, "should it continue over
time, would lead to the irreversible decline of the Italian _
automotive industry."
The penetrating probe embodied in the preceding chapters of the
current program confirms that assessment. What also emerges
from it, and in even starker terms, is the fact that the grow-
ing interdependence among policies of the various world produ-
cers has further eroded the margin of time remaining for any
effective intervention in the domestic industry.
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The great challenge the T_talian 2uto industry must face and win
lies, first of all, in the area of innovation. That is very
tough ground, into which the competition has poured tremendous
human and financial resources, and upon which, in the next 3 to
4 years, the future ranking of the world's auto-makers will be
decided.
The Commission finds, to a raan, that the effectiveness of the
measures outlined below will depend to a large degree upon im-
provements in labor relatieTs within the industry, without which
the indispensable improvement in competiti,ve standing required
to achieve the goals set forth in the program would be highly
problematical. The hope is, therefore, that both industry and
_ labor will swiftly take all possible steps to sit down toge-
ther for constr~zctive negotiations in the national interest.
II. Trends in Supply and Demand
At the start of the seventies the automobile market was display-
ing two tendencies. On one hand, there was a change in the be-
havior of the demand side of the market, with a gradually in-
creasing weakness in demand for extra options, coupled with a
growth in buyer preference for "replacement~~ components, which
in the OECD area reached better than ~O percent of the total.
On the other hand, there was the decline in the differentials
in spending on all f actors of production particularly the
availability of manpower at various levels of skill and ~he
emergence of growing instittztional rigidity in their utiliza-
tion. -
These trends, which were to be found in all ~he ~ developed coun- ~
tries, albeit to varying degrees, were accentuatecl by the energy
crisis. Specifically, there was the perceptible growth of a
negative attitude toward the very future of the automobile in
response to the soaring increases in the prices of petroleum
products and to the growing uncertainty as to their future -
availability.
These scenarios for the decline in demand in Italy found support
in the extreme in�lexibili~ty of existing legislation, and in -
occasional slants impoaed on the manipulation of economic policy.
This had an impact on the process of product innovation which,
during those very same years, was rapidly accelerating in the
plants of some foreign competitors.
The leaders active in other countries at the time were reacting
to this mounting pes..,imism here over the outlook for domestic
demand by adopting aggressive policies of penetration in markets
with conswner structures similar to those in the producing coun-
tries~ And so there came aboul; an enormous expansion in the di-
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mensions of the market, wit~: further intensification of the
tendency toward penetr��tior. by the producers in all areas of
the market, and in all the national markets.
The period during which the automobile industry crisis seemed ~
most� acute from 1973 to 1976 thus constituted, for the
German, French, and Japanese makers a breathing-space to set _
clear-cut strategies for growth during a Feriod of sluggish de-
mand. To bring their plant, organization-management, and dis- _
_ tribution systems up to the requirements of the new goals, they
then undertook intensive restruct uring on an industry-wide ba-
sis, wit h f inancial help and guidance f rom the respective go-
vernments. Significant in this connection are the steps taken
by the British and U.S. government-,s to rescue British Leyland
and Chrysler fram bankruptcy.
III. Why the Italian Auto Industry Lost
Its Competitive Steam
In this context, the Italian position was steadily weakening.
Various factors were simultaneously at work to bring about this
downward trend:
a. decline in productivity and operational efficiency due to
the buiit-in rigidity of manpower utilization, with the conae-
quent rise in production costs, during a period when the foreign
pr~ ~ icers were trying to hold down price changes;
b. delays in bringing out new models, during a period of rapid
innovation on the part of foreign competitors, a period in which
foreign competition, particularly Japanese competition, was -
moving to very aggressive marketing strategies; .
_ c. difficulties in building u~ marketing and distribution sys-
tems, and desultory attention paid to upgrading marketing tech-
" niques.
It was the synergistic effect of these combined factora that
started the downward spiral. The shrinkage in profit margins
brought a worsening in corporate economic and financial equi-
librium leading to inadequate investment, with consequent ad- -
verse effects on both the status of production efficiency and
on market position. Such investments as were made, furthermore,
were generally financed by recourse to new indebtedness, with a
further worsening of the economic and financial pictur~.
IV. Growt h in Demand and Outlook for Jobs
Given the economic outlook, growth in E~~.ropean demand f or auto-
mobiles over the eighties is generally forecast at l.$ to 2 per
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cent per annum. In this scenario,Italy's trying to hang onto its -
present share of the market, considerin,~ the requisite boost in
productivity, is going to creai;e pr~blems when it comes to main-
taining today's level of employm~nt.
~ Merely to achiev~e that goal will therefore mean that Italy's
- performance will have to be better than the average of the other
European auto-malcers . Mea!nwhile, predictions for the rest of
the current year show that along with an improvement of its share
of the domestic market, the Italian industr3~ is suffering a marked
- decline on the European market as are those of other European
_ countries, for that matter as a result of strong Japanese _
penetration.
For 1950-81, ~he chilling of the international e~onomy will
- bring a demand level well below the average forecast for the
eighties as a whole.
V. Government Interventiun in Other Countries -
Government intervention has been crucial in the sometimes forced
behavior of the automotive industry in the major countries. Jn
fact, where the government does not take a ciirect hand and it
is worth recalling that in Europe the indust,ry leaders, with
the sole exception of Italy, are either entirely state-owned or
partl5~ owned by the central governments or by its peripheral -
agencies the industry has been the target of emergency govern-
ment intervention in the charting and implementation of the re-
structuring processes. _
In the major countries state intervention in the industry has
been massive!ltdesigned initially with isolated measures, then
_ increasingly with the formulation of overall national strategies _
to guide and channel the structural changes in the national
industry. In some countries, like Japan and France, most of
th~ intervention has taken the form of incentives which set a _
. premium on achieving speci~ic growth Largets agreed upon between
industry and government.
The policy thrust behind all such intervention is to strengthen
the national auto-makers~ production and marketing structures,
while encouraging them in penetration of foreign markets and
_ making sure that any eventual recovery in domestic demand does
not redound to the benefit of foreio producers. The trend to-
ward government intervention in the various countries thus seems
to be shaping up finally in measures designed to prop up produc-
tion at home and to encourage initiative which, by boosting the
companies' ability to compete, would guarantee them stable shares
of foreign markets.
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At this point the document goes into an exami-
nation of intervention policies on behalf of -
the automotive industry in France, Japan, West
Germany, and the United States.
VI. The Finished Program: Goals and Thrusts
A. The basic purpose of the program is to bring about a mark~d
incr~ase in the competitive health of the Italian automotive
industry, and to d~ it in such a way as to reach a volume of
sales compatible with the objective of restoring sound levels
of employment and improving the balance of trade.
B. The objectives of the plan thus become:
1. Reducing the Italian lag in overall productivity, jobs,
and plant behind the rest of the EEC countries and
bringing the "new" Italian production systems up to the
prevailing levels of productivity in the area.
2. Improving the cost-price-performance ratio for Italian-
= built automobiles.
3. Streamlining the components and parts industry.
- q. Gradually recovering the share of the European market
lost over the 1975-1979 period. -
Parentheses in the following list indicate the objectives (above)
toward which the thrusts are directed.
a. Accelerating the rate of ira~ov~ation in product and proces- -
ses ( B2 )
b. Restr�ucturing in~restments for streamlining and technically
updating individual plants and for redesigning and simplifying
_ the layout of the entire automobile production system (B1)
c. Rest ructuring investments as part of a territorial redistri-
bution of automobile product ion aativities, with an eye to rec-
tifying regional imbalances. (B1)
d. Stepping up and expanding marketing activities abroad. (B1
and B4 )
e. Internal mobility of workers between departments of a single
company and between companies in a single group. (B1)
f. External mobility of workers between diff erent companies on
a region-wide basis. (B1)
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g. Reducin~ absenteeism. (Bl)
h. Greater flexibility in working conditions and work organiza-
tion (B1)
i. Development of integrated component clusters and standardised
parts. (B2 and B3)
j. Improving the ratio between corporate fuzYds and indebted-
ness. (B2) -
k. Mergers and agreements among component and parts manufac- ~
turing firms. (B3)
1. Technical collaboration agreements between auto-makers and .
companies making parts and component.s and supplying materials.
( Bl, B2 ~ and B3 )
- m. Bringing Italian regulations into line with those of the EEC
insofar as concerns inspection and certification of the technicai _
features of registered motor vehicles. (B2, B4)
A11 these thrusts, however, are to be aimed at the end producers ~
(automotive and body companies), at compon~nt and parts makers, ~
and at suppliers of materials and production systems.
Two Goals: Protect Jobs and Improve the Trade Balance
VII. Tools Available
The scope of t he problems outlined and the size of the develop- -
ment programs pursued by most of the international competition
with the support of their respective governments lead us to the
conclusion that the actions provided for in PL 6~$ alone wi11
be inadequate. Specifically, it is clear that tremendous weight
is attached to the matter of the capacity for innovation which
auto-makers must display in a competitive context that has
proven spirited in the extreme. ;
On the other hand, actions aimed at the production structures (
mizst be accompanied, if they are to be eff.ective, by measures ~
designed to foster exports and to build up marketing systems ~
abroad. Moves to boost production and marketing capacities must !
not be conf ined solely to the companies marketing the f inal pro- ~
duct, but must on the contrary cover the components and parts
makers as we11.
Similarly, action taken to stimulate research activities should
be expanded to include con?panies and consortia of components and
parts makers. Given the nature of automobile production, a good
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share of product innovation is achieved b~ buil.diiig into the
finished car elements of technological advancement actually
achieve~ by the parts makers.
The objectives to be achieved, in addition to implementation of
PL 675, will call for the adoption of additional measures. Spe-
cifically, such measures must deal ~,vith providing incentives
for industrial innovation, for productian and organizational
flexibility, and for increasing exports.
: Haw much success the sector will achieve in striving for these
specific goals will depend, furthermore, on the more ~eneral
effectiven,ess of economic policy, first of all of its ability
_ in the medium run to bring the rate of increase in prices here
into line with that prevailing in the other industrial countriQs. _
Lacking this, not only will it become increasingly difficult to ~
find foreign markets for our products, but the domestic market ~
itse~.f will become increasingly and extremely vulnerable to a
price-war launched by foreign auto makers.
The huge increase in the size of the market further necessitates
coordinating the industrial policy measures adopted by t~ie se-
veral countries. For the countries in the Community zone, that
action must be undertaken by the EEC both within its own cori-
fines and in relations with foreign producers.
The Community, therefare, must formulate a policy o~ industrial
and commercia~ coordi.nation among t~ie member nations and between
the Community as a w}iole and third countries and/or their pro-
ducing organizations. Specifically, that policy should insure
containment of the presence, direct or indirect, in the Community
market of foreign producers.
When the Commission was ~nstalled, the minister for industry _
asked, among other thing~, that it assess the feasibility of a _
suggestion from Nuova Innocenti that it import engines from Ja-
pan. Given the general orientation embodied in the program, we
feel that the entire matter should be made part of the broader
guidelines the Community will have to agree to observe in con-
nection with industrial and commercial relations with third
countries and that decisions in this area be evaluated at the
CIPI level to ensure equal treatment for the various national
producers in their relatioiis with foreign.producers, aside from
relations already existing between Italian firms and~or their
licensees abroad.
Also requested must be co_itinuation of the policy of harmonizing
regulations on technical standards in the individual countries.
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The procedures directly available under PL 6;5, h~wever, must
be backed up by additional measures calling �or specific moves
to stimulate research and development, export increases, and
bringing Ttaly's regula~ions on technical points into line with
those of the Cemmixnity, as we11 as action to encourage gre~ter
flexibility in the production process so as to boost produc~
tivity. We must, furthermore, make use of whatever Community
procedures are available.
VIII. Eligibility Requirements Under PL 675/1977
Bearing in mind the state the automotive industry is in, the
aims of PL 675/1977, and the limited funds available, the basic
requirement for eligibility to the "Industrial Rebtructuring and
Reconversion Fund," as sta.ted in Art. 3 of the Act, can be none
other than the one covering appropriation for all investments
whether in individual plants or in specific equipraent for the
product_ion cycle in support of "new" models as well as resty- �
ling: interventions,in other words, Y!hich, partly because of the
size uf the investment capital required to make them, will call
for substantial innovation by comparison with existing models.
' Barred from this definition, however, are all "cosmetic" modifi- ;
cations, meaning those which generally involve no changes in
moulds and dies.
To be eligible for assistance under the law, designs proposed
by builders must also refer to completed models with technical
features of fuel consumption, pollutant emissions, noise and
safety levels consistent with the standards already adopted for
- the Community.
To be in compliance with the provisions of PL 675 and with those
in the amendments made to it under PL 91, passed in 1979, f irms
seeking the assistance provided thereunder must submit the com-
plete plan for their corporate activities, including: the pur-
pose of each undertaking, their plans for restructuring and re-
conversion, ~the time it will take to carry them out, their plans
for financing them and the total amount they expect thcm to cost,
the manpower for which they are asking mobility allocati.ns,
their plans for decentralization of production, how they pian to
integrate decentralized activitiea into those of the parent cor-
poration, the total number of jobs to be provided at completion
of the plan, planned siting for plants involved in the project,
~ and infrastructure needs, if an~�.
IX. Intervention Timing
The innovation processes already undertaken by our principal fo-
. reign competitors will be coming on line within the next 3 to 4
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years. Given the importance of the innovation factor in the
recapturing of market share, 1983-1984 is therefore considered
the critical period in the competitive battle among the auto- -
mobile makers.
On the basis of these considerations, intervention timing and
its phases will be a very strzngent constraint. Since major ~
producers estimate the time required for designing a new model,
from initial design concept to the first car off the line, as
around 54 months, the obvious urgency of this program should
justify compressing the phases of its implementation into 4$ to
48 months. _
_ One of the major criteria for granting financial assistance, aside
from the scope of innovation, will be the time required~to get
the innovation on line. Specifically, for "new" models, finan-
cing will be granted in a mixed bag in the form of help in meet-
ing interest payments and direct loans, with instalments paid on `
~ the basis of the aforesaid time phases. ~
X. Intervention in the Production Process .
Automotive industry trends indicate that production is increas-
ingly viewed as a system of integrable processes joined together
in phases with different dimensions of scale. A more sweeping
, innovation of the process would make it possible to achieve more
rationa~ utilization both of individual plants and of the entire
production system, better production condition~ through greater
flexibility, increased productivity and output quality, and more
efficient dimensions for every phase of the prQduction cycle.
The additional costs the corporation would have to bear for
plant-cum-organization solutions aimed at improving the quality
of work, while allowing for the constraint of overall production
efficiency, should be considered deserving of assistance under
special provisions still to be adopted.
Streamlining processes are usually based on a selection of a few
basic models and subsequently breaking them down for component
assembly or better by integrated groups of components into
a good many types, right down to luxury options aimed at a care-
fully selected market. The goal right now must be to get to ~he
assembly line with increasingly complex and integrated parts and
components assembled off-line or bought from component companies.
Restructuring processes like these are destined to fine down
- both the producti.on phases within each company and those that in-
volve the entire production cycle. Hand in hand with them must
go the process of automating the costlier processes, particularly
c ast ing, f o rging, and st amping.
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From the assembly-line end, this goal can be achieved by design-
ing models inereasingly based on modular components. The compo-
nent firms, on the other hand, will be asked to produce packages -
made ap of several integrated components, ready for assembly as
is.
XI. Induetrialization
Assembly-line finishing and interior installation and other in-
vestments involved in industrialization constitute the final phase
of the innovation process. This phase, which will cost very big
sums of money, will embrace intervention specifically related to
the features of the restructuring plans covered in PL 6~$.
We shall need integrated utilization of national and Community
financial f acilities to pay for the scale of intervention requi-
red. National and Community facilities are stipulated in PL 675/
77 and 183/~6, as we11 as in the regional fund. The latter was .
designed and adopted not as a substitute for, but rather as an ad-
junct to the social fund, drawing on the available capital in the
European Investment Bank (BEI), the NIC infrastructure funds, and
the interest accrued from the compensation measures called for
under the SME agreements. This means that ar�eas for implementa-
tion of these "integrated" interventions wi11 be chosen ari the !
basis of suitable conditions for their siting, and that they will
- be considered priority projects in the management of a process
of restoring regional balance.
XII. Use of Macro-components and Standardized Parts
Plant r~design must also take account of the 1ik~ly trend in pro-
ductivity there and of the vo~ume of production the makers are
aiming at in the next few years. In this context, pref erence
must go to technical collaboration arrangements between automo~
tive companies and component makers which will ca11 specifically
for close coordination from the early design phase right through -
to the time the new models start rolling off the assembly line.
This kind of rationalization of the production processes is the
necessary condition for gaining the advantages of component and
component cluster modularity. On the other hand, Italian auto-
makers must begin standardizing parts and components, and stop
usi.ng odd-ball designs to build up their brand image, if they are .
_ to be able to count on adequate supplies from the parts and com-
_ ponent makers.
XII. Streamlining the Components Industry �
Bringing integrated components groups into existence is going to
call for industry-wide coordination of the production schedules
among the components producers. That move can be backed up by
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encouraging formation of the kind of consortia whose purposes
- are 5pelled out in Article 6 of PL 347 (10 May 1976), whose ex-
tension is now under discussion in parliament.
In line with the purposes of this legislation, mergers might be
proposed among components companies, with priority going to
those in the Mez~ogiorno, designed to further the integration of
plant production and distribution systems. In any case, plans
for this sort of undertaking should be completed within 3 years
of approval of the current program. The ministry for industry
is expected to intrvduce a proposal for legislation to foster
such consolidation moves, perhaps drawing on Community ~unds
f or them.
~
It would be equally desirable to take steps toward coordination
in the form of consortia or explicit technical collaboration
agreements among assembly firms, component makers, and produ-
cers of intermediate equipment or production systems. In that
connection, it would be we11 to opt for patterns similar to those
of the "groupements d'interet economique" ~joint subsidiary
- groups] provided for in French law. A proposal for such a move
- should be forthcoming shortly from the ministry of industry.
Rationalizing the industry will involve action designed to boost
- the competitive level of components including spare parts
on foreign markets. This might be a way to avoid the job con-
centration often accompanying mergers. -
XIV. Restoring Territorial Balance i7 Industry
The unsatiafactory rate ~f utii.ization of existing assembly lines
and the heated comPetition that has developed in an international
market in which demand can scarcely be called lively makes it
hard to predict the need for swift expansion in production capa-
city. Intervention aimed at upgrading the production structure,
furthermore, will have to allow for the need to stick to spe-
cific guidelines both from the technological angle and from that
of territorial siting.
The very heavy concentra~cions formed in the northern regions have
brought with them of recent years a number of management prob-
lems which have markedly ck~ into the expected benefits of eco-
nomy of scale. 'The procedure followed by 'iJ.S. and European auto-
makers in seeking more modest dimensions for plants, at least
for some phases of praduction, and steadily increasing resort to
components and part clusters pre-assembled off-line, would seem
to indicate a production cycle that will be more cleanly arti-
culated and more evenly distributed geographically.
Opting for a long-term effort at restoring regional balance by
means of action to ~'thin out" the more congested situations ~.n
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the north while building activity in the south thus emerges as
an essential one in the industry-wide turnaround. In practical
terms, this policy must be implemented with action wt~ich, be- -
ginning with the current state of under-utilization in southern ,
plants, provides opportunities for expansion of operations in
the production cycles of the new models.
The presence in the south of automotive production plants owned
by the two biggest Italian corporations calls for creation of a
center for component and parts production so as to cut down the
distance and hence the costs between the parts-makers and
the assembly line. Another problem to be solved in boosting
the compe�itive level of production in the Mezzogiorno has to do
with elimiiiating the higher shipping costs involved in getting
the product to market. The proper place to approach this par-
ticular question would seem to be the regulations approved to
replace PL 183, which lapses at the end of the year.
- XV. Amendments to PL 6~5 '
It must first of all be emphasized that there is need for imme- ;
diate emergency appropriations and~or amendments under PL 6'7$/77, ~
due to lapse soon, partly in order to allow for the increase in ;
the x~umber of sectors for which CIPI has ~completed programs.
A comparison of the objectives for the indu~try with the proce-
dures laid down for achieving them points to the need to back
up intervention under PL 675/77 with additional measures designed
to encourage recovery in productivity and production flexibi-
lity, to support and foster research and development, to beef
up marketing and promotion of our exports, and to bring our
technical regulations into line with those of the Community.
A. Recovering Productivity
Recovering productivity makes necessary, in addition to inter-
vention in the production process itself, additional measures
some of them f easible under PL 675/77 and others to be t aken by
the government.
PL 675's article 22 calls for establishment in every region of �
a commission on mobility (referred to in PL 479/1978 as the Re- ~
gional Commissions for Employment). In casPs where r~es~ructuring
and rec,onversion activities produce an excess of manpower, it
authorizes access to the "Manpower Mobility Fund" embodied in
article 28 of the ac.t.
The labor ministry should move swiftly to complete settin~; up
the commissions. For those regions principally a.ffected k~y re-
structuring, furthermore, inquiries shouJ.d be made as to their
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eli~ibility to draw on the European Fund for Regional Develop-
ment.
~ Those regions which have been vested, under current law, with
authority over "~~ocational training," under direct coordination
from the prime minister's office secretariat for relations
with the regions should have ready within $ months following
approval of the Plan, programs for vocational retraining for
possible job transfers h.etween corporations and beLween divisions
- in the same corporation. Such programs would then be submitted
for approval to the regional commissions on employment and made
available on a priority basis to all companies that have asked
for relief under PL 675� The government should, furthermore,
provide the necessary coordination with the regulations on vo-
cational training laid down by the Community and in connection
with recourse to the European Labor Fund.
Pending legislative enactment of decree law '760 on mobility, the
existing provisional regulationa~must be fully applied. Article
4-bis of PL 36 (9~2/79) already sanctions the inter-company mo-
bility called for under the collective bargaining contract signed
by the metalworkers on 16 July 1979� Article 4 of that contract
in f act covers mobility with explicit reference to PL 6~5 "to
deal in a consistent and practical way with employment problems
stemming from the processes of restructuring and reconversion in
production and from corporate crises with particularly heavy
labor impact as defined by PL 675 of 12 August 19~~."
Finally, to cut down on absenteeism, which is particularly wide-
spread in the huge plants typical of the automobile industry,
the labor.ministry should expeditiously came up with a plan to '
standardize procedures of verification for absences due to ill-
nes~.
Above and beyond the regulatory machinery described above, there
absolutely must be an improvement in the industry's labor rela-
tions, as already noted in the first paragraph af this chapter, -
so as to enai~le them to operate efficaciously.
B1. Support and Encouragement for -
Innovation and Development
Innovation in product and p~rocesses is destined to play an ever-
expanding role in shaping strategy for the automobile makers.
The next few years will be marked, as recent years have been,
by intensive innovations both in product and in the technologies
of production.
_ The tide of innovation will reach out to the design of new f ami-
lies of automobiles, to research on activP components (drive
systems), and to the discovery of new materials and fuels. The
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goals or reducing energ,y consumption and increasing safety and
comfort, factors upon which competition is largeiy based, call
f~r major research programs in materials, in engine design, and
in body aerodynamics.
The end producers will have to mount research programs tailored
to a small number of basic models, in which minor changes can
be made at will. Components producers, on the contrary, wi~l
have to devote themselves to developing integrated plans for
producing highly specialized parts and standardized sub-assem-
blies, which perhaps can be used by foreign producers as well.
Financial assistance for research and development must therefore
be extended to components producers. Specifically, priority
must be given to the design of components with grea.ter techno-
logical content, with broad resort to electronics and to the
uses of interchangeability. ltesearch activities might also be
conducted under association or consortium arrangements among
producers at the same level of production or among those opera-
ting at different stages of production (producers of materials,
of component s, or of the finished product).
DL $03 (30/8/80) calls in artcle 37 for appropriation of 1,$00 ;
billion lire for a government sinking fund to support programs
for development, design, testing, and experiment al building of
- new products and production processes in such industries as may
be singled out on a yearly basis by CIPI among those for tvhich
the plan applies. This provision would have made it possible to
get early planning on and to accelerate those programs of re-
search and innovation deemed crucial to the goals of this com-
plet,ed Program.
The expiration of DL 503 has thus left a great gap in the array
of tools available for swift restoration of real and lasting
conditions for competitive capacity in our automobile industry.
The need for restoring adequate financial backing for stepping
up our strategic planning for innovation and development thus
emerges as an essential condition for achieving the industry~s
goals.
B2. Support and Encouragement for
Medium and Long-Term Research
The objectiv~s for medium-term industry re5earch should find
appropriate support forthcoming from the IMI Fund for applied
research, suitably refinanced, or from similar intervention
sources. The goals of long- and very long-term research should
find their needs covered in the final programs for energy and
transport drawn up by the N~tional Research Council (CNR).
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-
~o
~
'
- migliaia di unit~
- ,.oa
.
- ~
_
, r _
~ � Cr~' -
i ~i aoo
, '~'.'i:~
. . ~
. re~
i~m n n, n �n ~e n~e ~ eo wu ,
Net Automobil,e Bxpoxts it~ Western 'Eur~pe
(in thousands of units)
The crisis in the automotive industry affects every aspect of
the European economy: one starkly clear s3gnal comes from the
precipitous decline in total ~xports over the past 10 years.
According to the ECONOMIST~s Economic Intelligence Unit, we
have gone from almost 2. $ million units ea~ported in 1970 to
less than 1 mill~ since 1978. Forecasts for the next seve-
ral years are ev, ~'.eaker: in 198$, we shall come close to
a skeletal $OO,u~ ,c;ommercial vehicles are shown in the sha-
ded portions of the bar graph).
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C. Support for Marketing anci
Export Prumotion
Support f or Italy~s automobile marketing abroad ca11s for ex-
panding t heir distribution systems and for mor~ Pffective mar-
- keting structures. Approval of the final program for "Build-
ing up the organizational structures for marketing the products
of the manufacturing industries abroad" will make financial
underpinning available for this effort.
In addition, priority attention must be given to activating th~
rule contained in PL 22~~19~'7 covering mai~ket research programs.
= 5pecif ically, taking a leaf from the French book, we might con-
sider t,he advisability of introducing the tar~get incentive idea.
COPYPIGHT: 1980 Editrice I1 Sole-240re s.r.l.
6182
Cso: 3104 ~
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TRANSPORTATION
USE OF COMPOSITES IN AIRCRAFT INDUSTRY
Dowty Composite Propellers
Paris AIR & COSMOS in French 13 Sep 80 p',6'
[Article: "Dowty Blades Built With Composites"]
[Text] The new series of three-bladed or four-bladed propellers offered by -
Dowty for the 1,500- to 2,000- horsepower turboprop engines designed to
_ power most oi the future commuter aircraft, have `~lades made entirely of
~ cot:~posite materials. The "spara" are of carbon fibres and overlaid with
fiberglaes, the empty spaces being filled with polyurethane foam. In
additionf these blades have a new pxofile like those (of inetal) already on
propellers for engines of up to 1,200 HP designed for general aviation air-
craft. This new profile and the composites used in the construction of the
blades not only make these propellers lighter but offer such mther advan-
tages as improved performance at low speeds, a lower sound level, and reduced
vibration at cruise speed. -
Aircraft manufacturers havi~4g;a~ready ~hosen propellers made of composites
are Saab and Fairchild fo r th e SF 340, as well as Shor.t Brothers for its
SD3-60. Many other aircraft companies already use Dowty metal propellers.
These include: Rockwell for its 840 Commander and 980 Commander, Swearingen
for its Merlin and Metro, British Aerospace for its Jetstream 31, and
Embraer for its stretched version of the Xingu. _
23
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000300050007-6

APPROVED FOR RELEASE: 2007/02108: CIA-RDP82-00850R0003000500Q7-6
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