Re: ATR-72's and Airbuses

Date:         17 Dec 96 03:09:18 
From:         Joseph Edward Nemec <nemecj@mit.edu>
Organization: Massachvsetts Institvte of Technology
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Jean-Francois Bosc wrote:

> > At market rate?  Most likely not.  Then, it's a subsidy.  Also, most
> > surveys show productivity of European labor is in general less than their
> > American counterpart.
>
> Well, there was one I read a few months ago showing that labor productivity
> was higher in France than in any other country ...

You must have misread. There have been a number of substantial,
comprehensive reports on labor productivity, and all have the show the
US to be the most efficient in most industries. Take a look at the
McKinsey Global Institute's report, or the
work of Wolf at NYU if you want examples.

Labor productivity in France is, in general, at about 80% of the US
level.

> Also, all analysts I heard agree that the current low rate of the US dollar
> is a subsidy for US exporting companies, and that the normal rate should
> be around 20% higher (if I remember correctly).

Currencies fluctuate. I remember when the USD was at 10FF in the early
1980s.  That was certainly a subsidy for French exporters.

Either way, exports make up only about 11% of US GNP, as opposed to over
20% for most European countries (most of which is simply them trading with
their neighbors - I wonder if they will redefine "export" after EMU, if
it happens).

> Finally, considering that market loan rates are around 5%, even if you
> are right this doesn't leave much room for significant "subsidies".

Come on, Airbus has received significant subsidies from the European
governments, not only for development and design, but also in purchasing
aircraft through national carriers.

--
Joseph Edward Nemec
nemecj@mit.edu
http://web.mit.edu/nemecj/www/