Dubai is hostile toward the U.S.? Then why do we sell them F-16s, Apaches and Black Hawks? According to our own State Department: "The UAE contributes to the continued security and stability of the Gulf and the Strait of Hormuz. It is a leading partner in U.S. counterterrorism efforts, providing assistance in the military, diplomatic, and financial arenas since September 11, 2001." Doesn't sound like a "hostile nation" to me.
Foreign companies have a long history of throwing money down the "rat hole" we call the U.S. Aviation Industry. Better their money than ours. It was said a few years ago that a company needed to go bankrupt three times to make the overhead costs sustainable. I'm wondering if that figure has changed much over the years? But it does point up the problems associated with manufacturing products in America.
I differ with the first comment in substance but not style. The Middle-East and China are not hostile nations and would have more to lose if they pursued belligerence. However, selling American companies overseas takes away jobs and converts America from a producing economy to a consuming one. Wealth comes from a nation adding value to raw materials or other product and exporting more than it imports. Sadly, most American corporations seem to be blindly exporting ownership, jobs, technology and profit for short term financial gain. Teach your grandkids Chinese or Arabic , because they just might need a Visa someday to move to a place with better opportunity.
I differ with the first and second comment. America is the champion of capitalism and hence free trade. Why would it be wrong for foreign capital to flow into North America and by doing so save some American jobs, wouldn't that be better than the alternative..... close down such a great company that helped revolutionalize modern GA!!!
I think the fact that the Arabs are investing in such a volatile economy and more so industry, should bring us hope and relief. The Mideast carriers are expected to spend between $350 and $450 billion on boeing and airbus airplanes by 2030.
Although I don't see foreign investment as a negative, when you see Piper, Cirrus and now Diamond taken over by foreigners, you have to ask the question: Can American Business not see the opportunity in owning a business that has unlimited potential in a world where personal transportation will only grow in importance?
This is clearly where politics and business merge. When we look at the downturn we need to remember that the downturn is the result of government policy begun in the 1980's with progressive deregulation and decreasing tax rates. The combination of those two vectors produced a diminished middle class whose average salaries have not risen in these nearly 30 years, and a financial industry which has promoted itself with record profits. Banking is not the same as manufacturing, by the way.
The culmination of this was the housing debacle and the mortgage debacle, clearly signaled by the fall of the savings and loan industry and large companies such as Enron...
The solution, of course, is at the policy level: restoring regulations (compare this to sports: without good rules, the bullies take the high ground and the game gets trashed), and structuring the tax code such that those who make the most off of the system pay for the infrastructure and the well being of the workers who ultimately consume the products.
When it comes to aviation, there will always be a market for the very rich, but until we return to policies that promote the middle class accumulation of wealth, the market for 172's, Warriors, Diamond DA-40's, Cirrus SR 20's and the like will continue to shrink.
Unless we similarly promote a policy which establishes the value of local airports, and go after those who do away with them...such as the past mayor of Chicago audaciously did, the aircraft industry will continue to slide.
Any one care to join "Occupy Wall Street" to return the financial power to what once was the middle class???
Very lucid and inciteful comments by north36, DigDug & rnqubain.
However, I don't concur completely with rnqubain - "America is the champion of capitalism and hence free trade" .... free trade, perhaps... but I think that capitalism in the US has a somewhat bloodied nose right now since the referees left the game.... we need rules to play...
I think you need to look at a few other countries that have a much better performance in the capitalism area .... so long we allow "self regulation", without thinking of the national interest, we'll continue to lose capital and companies to other countries... and the path to consumerism will be further entrenched. Time to start pushing education and stop shouting "States rights!!" - what about American rights ??? and it start with engineering education - not lawyers, etc.
I noticed that you did not mention Mooney Aircraft Corp in your article. To my knowledge they are still American owned. However, I understand that your omission is probably justifed since Mooney has not produced any airframes recently.
As a Mooney owner, I am conflicted about the fact that they were not one of the companies to attact foreign investment. On one hand, it would sure improve the availablility of parts and insure the continuity of the mark, on the other, people would complain about non-american ownership of another North American GA manufacturer.
I think on balance as a consumer, I would prefer that support for the products I own and seek to maintain would remain rather than wory about to whom the economic benefits accrue.
I agree with your point about income distribution. But thinking that higher taxes will help, falls into the category of logic that says, "something must be done, this is something, therefore this must be done."
I'm still trying to figure out how higher taxes could help the middle class.
Or how higher taxes on customers and investors help aviation or create manufacturing jobs.
If I had kept just a small fraction of the taxes I've lost in the past few years, I could have bought a lot of aviation toys I haven't bought.
The government isn't going to spend tax receipts on toys for middle class pilots. It's going to spend it on the priorities of the politically powerful, like it always does and like it's done so spectacularly over the last several years. To pay for all this, the government primarily fleeces the middle class, because - as Willie Sutton put it - that's where the money is. The middle class are not rich individually, but there's a lot of them, and unlike the rich they have no way to escape. That's why, in the end, taxes that are justified as being "only for the rich" invariably land on the middle class eventually.
If you have enough income to be a private pilot, you're paying for the government, not the other way around. So be careful what you wish for: more government, you can have - but it will come with less flying, maybe none.