FOREIGN REPAIR STATIONS TUESDAY, JUNE 27, 1989 HOUSE OF REPRESENTATIVES, COMMITTEE ON PUBLIC WORKS AND TRANSPORTATION, Washington, DC. The subcommittee met, pursuant to call, at 10:10 a.m., in room 2167, Rayburn House Office Building, Hon. James L. Oberstar (chairman of the subcommittee) presiding. Mr. OBERSTAR. Today's hearing's focus is on the Federal Aviation Administration Foreign Repair Station regulations and legislation that would modify those regulations. Last December, FAA's new rules governing certification and use of foreign repair stations went into effect. Those rules are a fundamental change in the way foreign repair stations are regulated. Prior to the regulatory change, repairs on such domestic aircraft by foreign repair stations were quite limited. Operators of domestic aircraft who wanted to use foreign repair stations had to come to the FAA and seek exemptions from the regulation. Under the new rules, airlines are allowed to use FAA certificated foreign repair stations for any and all maintenance on such domestic aircraft. As I see it, there are two principal issues. First is safety. We have to be satisfied that safety standards are not compromised under the new regulatory regime. Too often we have seen the environment change and the FAA caught in a position of playing catchup in its inspection and surveillance program. That was the case when we deregulated airline checks which had safety consequences. Second, we have to be satisfied that under the new rules, we are not jeopardizing an important economic sector of the Nation's industrial base. We have seen a number of other industries move offshore lured by Third World labor costs. While we have not yet seen gold rush-type movement by United States companies to contract for aircraft maintenance overseas, that could be a slippery slope. We must recognize that events today could set a trend in motion that would result in an alarming situation several years from now in which a significant part of the domestic ability to maintain aircraft has, in fact, evaporated. Four weeks ago, the Subcommittee on Aviation, including several of its members and staff, went to look at a number of issues in Europe-security, safety, the air traffic control system, U.S./European economic trade, but also foreign repair stations. (1) We had discussions with German, French and United States State Department and FAA authorities in Europe. We toured facilities, including the FAA-certificated foreign repair stations run by Lufthansa at Frankfurt. We saw the entire Air bus assembly line in Toulouse from start to finish, the 83 and the 8320 assembly lines. The delegation came away with the feeling we had seen some impressive facilities and impressive quality workmanship. In those facilities, both the Toulouse Air bus manufacturing center and Lufthansa's maintenance base, the international character of aviation came home with a great deal of force. For this member who did graduate study in Europe and followed European economic community activities closely, this is a matter of great interest, one that was not surprising, and one I had not seen firsthand and wanted to do that. In Lufthansa at the Frankfurt maintenance hangers, there were American made Boeing 727's with British Rolls Royce engines, European made Air bus engines with jointly made American-French General Electric engines flying the various airline equipment from Asian countries. I point this out because I think we have to recognize that aviation has become a worldwide international business. And the U.S. regulatory system has to recognize this. But more importantly was that every European authority that we talked to from Air bus to Lufthansa to the airport operators sets the FAA as the world standard that must be met. They may quarrel with some of the standards and the objectives and the rules and the FAR's, but every one of them said without a question we want to meet those standards because that is the world's standards. We will do whatever it takes and whatever costs are required to meet that standard. We need stronger assurances with respect to safety, as well as assurances that yet another important economic sector of U.S. industrial base is not going to be packed up and shipped overseas. And that is why we are holding the hearing today. We have a very large, diversified group of experts, including some beyond our own shores, who will be testifying at this hearing. In order to be fair, in order to hear all the testimony, we are going to ask, and staff has insisted on summarized presentations of no more than ten minutes. We are going to hold Members, including the Chair, strictly to a 5-minute rule. We ask for everyone's cooperation. We think it is important that we hear everyone's testimony and that this hearing not go until 10:45 tonight, as our hearing last week did. With those admonitions, the Chair recognizes the gentleman from Pennsylvania, Mr. Iron Pants. Mr. CLINGER. Thank you, Mr. Chairman. Mr. Chairman, the exponential growth of air commerce and the increase in international flights has placed a new and serious demand on our aviation infrastructure and on the regulatory agencies overseeing this industry. The major component of this trend has been a growing reliance on domestic and foreign repair stations. The fleet of aircraft is getting older. The fleet itself is growing larger, and carriers continue to increase the utilization of the aircraft. Clearly every indication suggests that repair stations, whether foreign or domestic, will gain greater prominence in the day-today business of aviation. Several years ago, most of our large domestic carriers had excess capacity at their overhaul facilities, and as a regular course of business, they performed contract work on aircraft of other domestic and foreign carriers. This is not done to the same degree today, driving the smaller carriers to find new vendors to service their aircraft. All carriers are now heavily involved with the installation or soon will be heavily involved with the installation of the TCAS and wind shear equipment on their aircraft. This will require intensive amounts of time and labor in the next few years. This is going to further crowd and put stress on maintenance facilities. In addition, the aging aircraft program, which is just now getting underway, will add additional work for our carriers. With such a high demand on repair facilities and the growing use of foreign manufactured parts in aircraft, I think it crucial that the Federal Aviation Administration increase its vigilance to ensure that certificated foreign repair stations are adequately monitored and inspected. Let me mention one major concern which I have. That deals with the issue of bogus parts. Several years ago, there was prominent mention in the press and on Capitol Hill about the illegal importation of bogus bolts, computers, electrical components and other knock-offs that were produced cheaply in certain Pacific countries. It became apparent to me that several of these foreign governments either had little concern about or control over the manufacture of these vastly inferior reproductions. There were several instances where bogus bolts installed on heavy vehicles failed well below the limits. I am concerned that foreign repair stations might endanger the lives of the traveling public by unwittingly using counterfeit or bogus parts. I would urge the FAA to be increasingly diligent in monitoring these facilities and the bogus parts program. I look forward today to hearing our fine witnesses, beginning with our panel of colleagues here this morning. Thank you, Mr. Chairman. Mr. OBERSTAR. The gentleman from the Virgin Island. Mr. DE LUGO. In the interest of time and I know we are anxious to hear from our colleagues here before us today, I would like to associate myself with your fine opening statement. I want to say that it was a great learning experience for me to accompany you to Europe recently. I would also like to apologize to our colleagues. I am going to have to be in and out of the hearing today because of other commitments. Thank you, Mr. Chairman. Mr. OBERSTAR. I thank the gentleman for those remarks. The gentleman from Arkansas. Mr. HAMMERSCHMIDT. Thank you, Mr. Chairman. I want to commend you for holding these hearings on a matter of great interest, as evidenced by our colleagues. I would like to place a statement in the record, Mr. Chairman. Mr. OBERSTAR. Without objection, so ordered. [Mr. Hammerschmidt's statement follows:] STATEMENT OF HONORABLE JOHN PAUL HAMMERSCHMIDT FOR THE HEARING ON FOREIGN REPAIR STATIONS JUNE 27, 1989-ROOM 2167 RAYBURN HOB 10:00 AM MR. CHAIRMAN: FORTY YEARS AGO, THE FAA ADOPTED A RULE GOVERNING FOREIGN REPAIR STATIONS. THAT RULE SEVERELY RESTRICTED THE USE OF FOREIGN REPAIR STATIONS BY U.S. AIRLINES. BASICALLY, U.S. AIRLINES COULD USE A FOREIGN REPAIR STATION ONLY FOR THEIR AIRCRAFT THAT WERE BEING FLOWN OUTSIDE THE UNITED STATES. THEY WERE GENERALLY NOT ALLOWED TO SHIP AIRCRAFT OR PARTS OVERSEAS TO A FOREIGN COUNTRY FOR REPAIRS. SINCE 1949, THE AVIATION WORLD HAS CHANGED DRAMATICALLY. THERE ARE MANY MORE MANUFACTURERS OF AIRCRAFT AND AIRCRAFT PARTS LOCATED OVERSEAS. INDEED, MOST COMMUTER AIRCRAFT ARE NOW MADE IN FOREIGN COUNTRIES. |