DASA

With less than a decade under its belt, Daimler-Benz Aerospace AG has transformed the German aircraft industry from a bit player on the global scene into a leading star of the European aerospace industry. Commonly known as DASA, this affiliate of Germany's Daimler-Benz designs and manufactures both military and civilian aircraft, including missiles, helicopters, space, and commercial vehicles. DASA's Deutsche Airbus subsidiary is a lead partner in the pan-European Airbus consortium via a 37.9 percent share. Led by Group President Hartmut Mehdorn in the mid-1990s, DASA struggled to become consistently profitable. DASA was created in May 1989 through the merger of Messerschmitt-Böelkow-Blohm (MBB), Dornier GmbH, Motorenund Turbinen Union (MTU), and Telefunken System Technik (TST). The newly-formed conglomerate took a controlling (80 percent) interest in Deutsche Airbus that December. Although DASA wasn't formed until the late 1980s, its creation is intimately linked to several trends that characterized the German aerospace industry in the post-World War II era. Before the First World War, Germany had been an influential player in the aircraft industry. And afterwards, despite prohibitions against military development, German companies continued to create civilian and military aircraft. In fact, the country's build-up prior to World War II was distinguished by innovative technical and production capabilities. After the Second World War, however, German aircraft companies were truly hamstrung. In his book Airbus Industrie, David Weldon Thornton noted that "after the defeat of the Third Reich Germany found itself prohibited from having an indigenous aviation capability." Although the advent of the Cold War helped revive the industry, at least in the Federal Republic of Germany (West Germany), the divided country's many aerospace companies continued to lag behind their contemporaries in Great Britain and France throughout the mid-20th century. Regional rivalries within the German aviation industry exacerbated each company's inability to compete on a continental, let alone global, scale. Specifically, the German aircraft industry didn't start to consolidate until the mid-1960s, much later than did France, Britain, or most significantly, the United States. The pace of mergers quickened after 1968, when the West German parliament formally declared that it would use direct and indirect subsidies "to induce the enterprises to combine into larger, and thus competitive units." But by that time, such American aerospace giants as Boeing Company, McDonnell Douglas Corporation, and Lockheed Corporation dominated the global market for commercial passenger aircraft. In order to compete more effectively, the federal governments and aerospace companies of France, Great Britain, and Germany began to investigate ways to pool their resources. Four years of negotiations resulted in the December 1970 formation of G.I.E. Airbus Industrie, a consortium headquartered and incorporated in France. Founding members were France's Aérospatiale and Deutsche Airbus GmbH, a German joint venture created with contributions from five companies: Messerschmitt, Dornier, Blohm-Hamburger Flugzebau (HFB), Vereinigte Flugtechnische Werke (VFW), and Siebel. Each took a 20 percent share in the Airbus affiliate, which was created in 1967. Future DASA member MBB was formed through the union of Messerschmitt and Böelkow, two southern German interests that had themselves merged in the fall of 1968 with Blohm-Hamburger Flugzebau (HFB), a northern German manufacturer. By the late 1980s, only MBB and VFW still held stakes in Deutsche Airbus. Dornier, another major aircraft manufacturer and future DASA member located in southern Germany, was characterized as "jealously independent" in Thornton's 1995 study. During the 1970s, German firms participated in several trans-European collaborations, but because of their small size German participants often had secondary roles and mad