US-Brazil Economic Policies: Tackling Climate Change

As previously said, huge firms are responsible for the majority of GSC creation. As a result, limiting the study to the industry level (for example, the 'aeronautic' or 'automotive' GSC) is insufficient, despite the fact that the majority of the literature does so. Our research into the GSCs of Airbus, Embraer, Renault, and PSA reveals that they should be seen as strategic spaces.
⦁Significant discrepancies in the GSCs of Airbus and Embraer
Airbus' GSC is built on moving final assembly lines (FAL) to local or regional markets, such as the Americas or Asia. Embraer's strategy, on the other hand, is focused on Brazil, which serves as a domestic export hub. While Airbus maintains control over its primary suppliers, Embraer is a global leader who is beholden to its largely non-Brazilian suppliers.
⦁Airbus's GSC involves offshoring assembly plants and managing the supply chain.
Airbus operates four final assembly locations. Outside of Europe, two have recently been established: one in Mobile, Alabama, and one in Tianjin, China. However, the corporation's manufacturing lines in France and Germany produce significantly more than those in the United States or China (Table 6).

 Changes in Global Supply Chain

Airbus has a high level of intrafirm trading, particularly between its two European final assembly factories in Toulouse and Hamburg. Corporate activities are distributed among factories based on each nation's financial contribution. The activities that bring the most value are carried out in Germany, France, and the United Kingdom.23 Even though it has waned slightly, French dominance over Airbus remains strong. The increase in production of the A320, which accounts for 80% of the company's sales, has benefited Hamburg plants. The A350 is only produced in Toulouse. Hamburg

Brazil's aeronautic industry receives consistent official assistance, including government acquisitions and finance.

As in the other large countries that dominate the global aeronautics market, public policy, particularly funding from the Ministry of Defense, has been critical to the creation, development, and internationalization of the Brazilian industry. Government purchase has facilitated the development of advanced technology. However, the economic crises that have hit Brazil in recent decades, such as in 2013 and 2014, have led the government's defense expenditure to fluctuate more than in France.
Government assistance for civil aeronautics is also significant, although being supervised by the WTO. On February 15, 2017, Brazil filed a complaint against Embraer's direct competitor for receiving subsidies that violated WTO standards. The Brazilian government finances exports through two main sources. First, BNDES (the National Bank for Economic and Social Development), one of the world's largest development banks, commits 90% of its budget to promoting aeronautical exports. The BNDES funding has continuously decreased over the previous decade, but Embraer's reputation in international markets has allowed the business to have access to national and international private financing. Brazilian aviation enterprises benefit from the public-owned Banco do Brasil's PROEX-Equalização program, which subsidizes interest payments on loans given in the national market to align interest rates with foreign markets (Ferreira, 2016). In addition, the federal government has developed programs through FINEP to promote aeronautical technology progress. However, the budget for these projects is relatively limited.
By worldwide standards, Brazil provides little assistance for R&D and innovation. What little there is comes from government purchases, particularly from the armed forces. There are government research centers, some of which, like DCTA, are committed to
Aeronautics and aerospace. The São José Technology Park in São Paulo, Brazil, is home to 90% of the country's aviation enterprises and 95% of their employees. The government and Embraer collaborated to create this industrial cluster. In 2014, a "programme for development of the aeronautic supply chain" was established. Embraer, the Brazilian government's industrial development agency (ABDI)21, and the Technology Park collaborate in its operation. The programme's purpose is to improve companies' knowledge of the value of a strong supply chain. However, it has a very limited budget.

Limited state assistance for the French auto industry. 

In France, the car industry has received significantly less government backing than the aerospace industry. According to respondents from the French government's Directorate General for Enterprise (DGE), supply chains received little attention in government circles prior to the 2008-2009 crisis.
Because automotive businesses are very old and have already acquired capacity for expansion and innovation, the national government has never been compelled to assist in industry consolidation, as it has in sectors like as aeronautics, energy, telecommunications, and computing. Nonetheless, the French government has intervened briefly, at times of crisis. First, Renault was nationalized after WWII. The state then provided financial assistance to the firm in the mid-1980s. Later, the state stepped in to help PSA, first in 2012 and then in 2014.22 Today, the French state owns 15% of Renault and 14% of PSA. During the 2008-2009 economic crisis, the French government responded by enacting measures expressly for the car industry. Some of these steps were intended to consolidate the industry, while others contributed to the (short) rebirth of the 'filière' notion following the 2008 crisis.


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