Mr. President, I appreciate the discussion I was hearing. I would also like to draw attention to an issue that I think is about the most important to our Nation. We recently won a major trade case against the European Union and their…
Mr. President, I appreciate the discussion I was hearing. I would also like to draw attention to an issue that I think is about the most important to our Nation. We recently won a major trade case against the European Union and their subsidization of Airbus.
This is an effort by the European Union, over a period of 30 years, to buy their way into the large commercial aviation marketplace. They did so. They did so successfully. They drove out two major U.S. competitors, McDonnell-Douglas, Lockheed-Martin, drove them out completely. They do not even make those big jet airliners
anymore, and they had Boeing on the ropes.
Airbus took more than half the market share globally in the large airliner business. The U.S. Trade Representative's office, over a couple different administrations, pursued Airbus's subsidization. We just won this case, a multibillion dollar trade subsidy case that we won against the Europeans and their subsidization of Airbus, taking market share in the large commercial airliner business in an illegal fashion, illegally subsidized.
Now we will go into the damage and remedy phase. But we won the case, and it is a massive case. The reason I am raising this to my colleagues, my colleagues all know about, is a similar setting is starting in the small aircraft market, general aviation market. It is starting in the business jets, the small airplane business.
This is a U.S. homegrown business, it is centered in my State in Kansas. It is a great business. It provides connection throughout this country and increasingly throughout the world. There are 5,000 airports in the United States; only 500 of them have commercial service.
So the other 4,500, I guess you ride a bike to if you do not have a business jet or an airplane to get people there. Eighty-six percent of the passengers on those business jets or airplanes are mid-level sales, engineers. They make connections in between their various properties as the company operates. They make them much more efficient within that business.
But what is taking place today is this homegrown general aviation business in the United States that is a major exporter, recently cited by a major study by Brookings that this is a major export cluster, 40 percent export that we do in general aviation, the small business jet- airplane market is now under targeted attack by other countries to take this business away from the United States, the same way Airbus, subsidized by the European Union, took that market share away from the United States.
Instead of going after the big airliners, they are going after the small jets, the small airplanes. Several countries are lining up to do this. This is one of the major challenges facing general aviation domestically--foreign countries targeting this industry, which has high-wage, high-scale manufacturing sets of jobs. Various governments around the world are lining up and preparing programs with various means of support for their domestic aircraft industries, in research and development, sales and export financing, as well as certification of new aircraft, very similar to what took place in Airbus taking over that market share that they did.
In that situation, you had large companies fighting against a government operation, and they had, in some cases, deep enough pocketbooks to last, such as Boeing did. Lockheed-Martin, McDonnell- Douglas did not and were driven out of the field. My great fear in this targeting of general aviation, of the smaller business aircraft market, is that they are going to have countries behind them, companies in those countries are going to push forward and they are going to take the market share away and they are going to be aggressive and it is going to happen rapidly if we do not get out in front of it and stop these other countries from doing this subsidization.
It is absolutely critical to engage this competition now, that we stop it now, that we start the investigation of foreign governments' illegal subsidization in the general aviation market now, and that we get on top of this now, before it goes on 10, 20 years, as it did with Airbus, and we drive U.S. businesses out of the field.
One country in particular I wish to draw attention to, and one company. The country in particular is Brazil. It has made a strong commitment to expanding its presence in this market, the general aviation market, through Embraer, one of Brazil's largest exporters and employers. Embraer has made it a strategic focus and publicly stated its goal in 2005 to become ``a major player in the business aviation market by 2015.'' That was their statement in 2005, so they are 5 years away.
How have they done? After entering the business aviation market in 2002, Embraer has been involved in a massive program to develop aircraft for this market segment. They have experienced unbelievable growth and have rolled out a full product line of new jets, including the Phenom 100 and 300, the Legacy 600 and 650, and the Lineage 1000. Beyond the staggering numbers of models Embraer has introduced since 2002--in 8 years that number of product introduction--it is now responsible for around 14 percent of all global sales of business aircraft.
Again, this is a U.S. homegrown business. This business didn't exist outside of the United States before we started it many years ago. It is headquartered in my State in Wichita, the air capital of the world. What they have done since 2002 is get 14 percent of the market share from a start position, a cold start position. This is quite an unbelievable feat for a company that has only been manufacturing business aviation for a little over 7 years. That is phenomenal. It also, I suspect, was done illegally and subsidized by the government. At the same time, Embraer continues full speed ahead toward its goal of being a major player in the business aviation market.
U.S. manufacturers during this same period have had to delay or cancel new program starts due to challenging market conditions. I don't need to remind Members what has happened since 2008. It has been a horrific market condition. In my State, we have had huge job losses and sales in the business aviation field since 2008. We had a nice period going into 2007. We were up to 40 percent international sales. International sales helped us a lot because previously we sold 90, 95 percent of the market domestically, so that's a nice expansion in the international marketplace.
Since that period, 2007 moving forward, this has been a downward market. In that period, Embraer has moved up to 14 percent and introduced a whole new cross-section of planes. As someone who has seen similar signs in the past that were later proven to be the result of illegal subsidization of aircraft by the EU, this activity by Embraer and the Brazilian Government and growing market control does not seem possible without heavy and creative government support across the board. It does not seem possible to have done that in this market condition, in this atmosphere, in that short a period of time by a new startup company that hasn't been making these aircraft for more than 7 years. That was the similar sort of trajectory Airbus went on when it had heavy and creative government subsidization to go into a marketplace they had not been anywhere close to in the past. That's seven years, now 14 percent of the market share by Embraer, starting from a dead start. There is heavy illegal subsidization.
I urge the President to look into this matter through the U.S. Trade Representative's Office, the International Trade Commission, to start an investigation into what I believe is illegal subsidization. Let's get the factual setting established.
We now see what they have accomplished in this period, I believe, through illegal subsidization. We need to get the International Trade Commission and the U.S. Trade Representative's Office focused on what needs to take place; otherwise, what will happen is Embraer will continue to grow in its market presence, taking over more and more of the global and U.S. domestic market. It will drive weaker incumbents out of the field in the United States, as happened in the large aviation market. We will lose export share. It will encourage other entrants such as the Chinese to come into this marketplace, possibly the Japanese as well in subsidized ways, illegal government subsidization into this marketplace that has high-wage, high-skill manufacturing jobs that we should be doing in the United States and not allow to be stolen by foreign treasuries to other places around the world.
We have to do this and get in it before they do what Airbus and the EU did to the large market which is to drive Lockheed Martin and McDonnell Douglas out of the business. While we were sitting here saying: We think maybe there is a problem, there might be a problem, there was a huge problem, a huge illegal subsidization by the Europeans. But we didn't get on top of it until two major U.S. companies were completely driven out of the business. Let's not let this be repeated.
As my colleague from Kentucky loves to say: There is no education in the second kick of a mule. We have seen this play before. We have seen countries go after key market segments in the United States. If we are not aggressive in confronting it, it goes on until we do. I hope my colleagues will look at this. There are two actions we can take near term with the International Trade Commission, starting the investigation in this particular case with the U.S. Trade Representative's Office, starting to raise this issue, particularly with the Brazilians but also other countries. Now is the time to do it, not 5 years later after U.S. companies have been driven out of the business.
I yield the floor.