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But what pleases me the most was Ms. Pelosi's statement when she talked about the national security aspect of this. I would like Mr. Mineta to address it. He has given it great concern. Isn't there really an underlying fear that we are witnessing the gradual demise of a domestic capability to do what needs to be done?

Mr. MINETA. Of course, that is not only as it relates to this subject matter, but to a much broader concern. I think we all have the concern, whether it be in aerospace, in high technology, in my own area from the Silicon Valley, whether it be semiconductor chips or high-definition television, that is a concern we all have across the board.

Mr. BOEHLERT. Am I correct, all of the mechanics who operate out of certificated facilities here in the United States have to be listed? Is that correct?

Mr. MINETA. That is correct.

Mr. BOEHLERT. Does the same thing hold true for mechanics in foreign facilities?

Mr. MINETA. Yes, they would be required to be listed under their laws. I am not sure that they would be listed under the laws of or requirements that we have. That is one of the concerns.

The question is, I think, will the United States inspectors then perform the kind of-or have the criteria to measure, let's say, a TAP employee doing some work on U.S. aircraft or Hombre Air or any other company that would want to be doing repairs on U.S. airline equipment.

Again, I think it goes back to another issue that Mr. Inhofe brings up, and that is the language and communications issue.

Mr. BOEHLERT. Mr. Chairman, I would just like to thank all of our colleagues for their very fine, comprehensive, enlightening testinony. Thank you, Mr. Chairman.

Mr. OBERSTAR. The gentleman from Texas.

Mr. LAUGHLIN. Mr. Chairman, I want to thank all the witnesses on this panel for their informative discussion of these safety issues, the national security issues. I look forward to hearing from the other panelists, and I will withhold questions until that time.

Thank you.

Mr. OBERSTAR. I thank the gentleman.

The gentleman from Missouri.

The gentleman from Georgia.

Mr. LEWIS. No questions, Mr. Chairman. I want to thank my colleagues for being here.

Mr. OBERSTAR. And I, too, thank you.

Mr. INHOFE. One last comment to partially answer a question that Mr. Boehlert brought up. In the European countries, as is true in other countries, they determine what degree of listing takes place. They do have what they call, we would call an on-the-job training course. I have talked to the individuals who have watched this, where they have an individual coming in who has never been to any type of a school, listed or otherwise.

In my district, we-in addition to this institution we have been talking about, also have Spartan School of Aviation, which is one of the largest in the world. A few of those we find are in Europe, but there are individuals who have had no certification; however,

they are supposedly working under the supervision of someone else.

If we were to go in and conduct an inspection, they would look at the paper trail and would find a tag like this, and it would say, "Well, that is all right, because this buy down here is qualified to sign it."

Yet, I don't know of one incident that we found in the United States where they have signed these tags en blanc and sent them there at the discretion of whoever wanted to tie them onto the equipment.

There is no date on here. There is no job description of what has been done. They don't even name the part. This could go on anything. So, I only want to mention that.

Mr. OBERSTAR. If the gentlewoman from California would like to join the committee for the balance of the hearing, for any part, she is welcome to do so.

MS. PELOSI. Thank you, Mr. Chairman.

Mr. OBERSTAR. Our next panel consists of the Honorable Jeffrey N. Shane, Assistant Secretary for Policy and International Affairs, Department of Transportation; Mr. Anthony J. Broderick, Associate Administrator for Regulation and Certification, Federal Aviation Administration; the Honorable Alan Larson, Principal Deputy Assistant Secretary for Economic and Business Affairs, Department of State; and Ms. Linda F. Powers, Deputy Assistant Secretary for Services, International Trade Administration, Department of Commerce.

I would like to welcome you all, and particularly Mr. Shane, who wears a new hat in a new agency, and also a new pair of glasses. Congratulations on finally being confirmed by the U.S. Senate in your new position, and though not yet sworn in formally, that soon will be a reality. And you come back to the Department whence you once emerged. Your service is familiar to this committee and to this chairman. Many long hours we worked together on international trade matters, in cargo and passenger service in the other subcommittee that I chaired.

I want to reiterate my high respect for your splendid quality of professionalism. Please begin.


Mr. SHANE. Thank you very much, Mr. Chairman.

Mr. OBERSTAR. Or quit while you are ahead. I don't know which. Mr. SHANE. I hope I can stay there. I am very grateful, very personally grateful for those very kind and thoughtful remarks. I am delighted, I might just say as a personal note before beginning my

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testimony, to be able to return to a Department in which I have invested 11 years already as a career civil servant.

I am looking forward very much to continuing my work with the Congress, and in particular this subcommittee and the subcommittee you used to chair. I enjoyed those hours in your office very much, and am looking forward to more of the same.

I am particularly grateful for this opportunity to testify on very important legislation pending before the subcommittee. I have a prepared statement which I would like to submit for the record. But in the interest of moving the proceedings along, what I would be grateful for is an opportunity to summarize that at this time. Mr. OBERSTAR. Without objection.

Mr. SHANE. Several U.S. Government agencies are represented here today, either by witness or through joint testimony. This unified interagency representation illustrates the administration's strong opposition to any legislation that would repeal in whole or in part the recent rule change that eliminated unnecessary restrictions on the work performed by fully qualified FAA certificated foreign repair stations.

Other witnesses will deal with specific aspects of the issue. Mr. Broderick, on my left, the FAA's Associate Administrator for Regulation and Certification, will explain the FAA certification requirements foreign repair stations must meet, the surveillance they are under and why there is no safety justification for the proposed legislation. The representatives from the Departments of Commerce and State will deal with the international implications of this issue, the U.S. trade policy rationale for the current rule, and the reasons why the rule is in the long-term interests of the entire aviation industry, including labor.

As for the Department of Transportation, we strongly support the current rule for various reasons. It makes sense, it is fair, it is good for our aviation industry, and we are convinced that it will not have the negative impact on safety or jobs that some have suggested this morning.

If I may, I would like to touch briefly on our major concerns with the legislation. First, there is no safety justification for making any distinction between a qualified FAA certificated repair station in the Federal Republic of Germany or Switzerland, for example, and one in the United States. As long as foreign repair stations are scrutinized by the FAA before they are certificated, meet the same standards as domestic repair stations, and are thereafter subjected to the same level of surveillance the FAA and the traveling public can be assured of their ability to repair and maintain U.S.-registered aircraft engines and parts according to FAA standards.

The subcommittee has expressed concern about the FAA's inspector work force level, and its ability to handle the increased workload that will come from newly certificated foreign repair stations. Although Mr. Broderick will address this in more detail, let me assure you that the Secretary of Transportation will give his full support to any FAA request for additional inspector manpower to cover this function, if needed. Furthermore, I would expect that FAA will continue to consider its ability to provide the necessary level of surveillance before granting certification to a new facility.

In short, there simply is no safety justification for the legislation before this subcommittee.

Second, the final rule which the FAA promulgated on November 22, 1988, was needed to bring its regulations into conformance with U.S. trade policy. Linda Powers, on my right, the Deputy Assistant Secretary of Commerce for Services, will explain in more detail our international obligations under the GATT and in the OECD, and the likely consequences for aviation and for other service sectors if the United States becomes the only aviation power to have enacted, against the considered advice of its aviation safety regulatory agency, a limitation on repair services based on geography.

Mr. Chairman, you are correct in suggesting that the FAA is in fact the premier safety organization in the world for aviation. Other countries and other aviation authorities do follow the examples set by the FAA time and time again. Our concern is that they may very well follow this example as well. If we pass this legislation, we may not be the only country with such a restriction for very long. Our concern is that there are 4,485 repair stations in the United States, the FAA has certificated something like 274 repair stations abroad, and it doesn't take very much calculation to imagine if a rule like the one we are talking about today under this legislation becomes a world standard, what the impact on the United States and on U.S. labor would be.

The third and final concern is that this legislation is not in the interests of the U.S. aviation community as a whole. In that connection, there are a number of serious questions which we urge the Congress to consider carefully.

To begin with, we must consider the impact of the bills before the subcommittee on U.S. aircraft manufacturers. A full or even partial repeal of the rule change would jeopardize aircraft sales overseas, along with the U.S. manufacturing and maintenance jobs those sales create. The testimony later today of the Aerospace Industries Association on behalf of the manufacturers will address that concern.

Similarly, the subcommittee must consider what the effect of the rule would be on the airline industry. U.S. airlines need to be able to maintain their fleets efficiently by qualified maintenance establishments at the most convenient location. Geographic restrictions impose additional and unnecessary costs. There is a genuine reason to be concerned that restrictions of that kind might ultimately threaten our airlines' ability to compete in foreign markets.

Mr. Chairman, the Department of Transportation is committed to facilitating efficient aircraft maintenance and repair in a manner which ensures complete safety. Congress is asking the right questions with the proposed legislation. It is correct to be focused on the impact of the rule change on safety in the first instance, and on jobs in the second instance. We honestly believe that the rule change will not have those negative impacts, and we urge this subcommittee not to support the legislation now before it.

That concludes my opening statement, Mr. Chairman. And along with the other government witnesses, of course, I will be happy to answer any questions that the subcommittee may have.

Mr. OBERSTAR. Thank you.

Our next witness is Mr. Tony Broderick, again, the heavy-duty ball carrier for the FAA, on all the issues coming before the subcommittee.

Mr. BRODERICK. Thank you very much.

I will summarize my remarks as well, if that is okay? When the FAA proposed a rule change to our requirement for foreign repair stations, we did so because of the global nature of our air transportation industry today-a characteristic you described in your opening statement-and a general conviction based on past experience, as well as planned FAA requirements, that overseas repair needs of U.S. operators can be fully accommodated in a safe manner, since there is no fundamental difference between domestic and foreign repair stations other than geography.

And that remains our view today, following the promulgation of the rule change. Our position is simple. We will certificate new repair stations only to the extent that we have adequate resources available to perform necessary surveillance of those repair stations.

We will maintain the increased vigilance and assure the adequate monitoring that all repair stations demand, as noted by Mr. Clinger in his opening statement. Since the promulgation of the rule change in November, we have received approximately 100 applications worldwide for a foreign repair station certificate.

It is likely that a significant number of these proposed operators will not be qualified to receive a certificate. At last count, four new certificates had been issued to foreign repair stations so far. On the other hand, in the same timeframe from last November to this June, certificated domestic repair stations increased by 94.

We have proceeded slowly since the final rule was promulgated last November, and we will continue to exercise a cautious, methodical approach. We are committed to meeting all of our safety obligations in a way that protects the traveling public, while at the same time, recognizing and accommodating the international environment in which our air transportation industry must operate today.

Thank you.

Mr. OBERSTAR. Thank you very much, Mr. Broderick.
Next is Mr. Alan Larson.

Mr. LARSON. Thank you, Mr. Chairman. I, too, have a written statement that I would like to submit for the record.

Mr. OBERSTAR. Yes, without objection.

Mr. LARSON. In summarizing that written statement, I would like to make three points about how the legislation would affect the international competitiveness of three very important American industries.

First, the American airline industry. It competes in an international marketplace and restrictions on its ability to choose qualified foreign repair services could impair that industry's competitiveness relative to foreign carriers, and in that way weaken an industry that has been a very important job creator in our economy.

If the United States were to block its carriers from using qualified foreign repair stations, this would tend to legitimize and even encourage restrictive practices by other nations.

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