Here is an interesting parallel. In UK after WWII there were four private regional railways all struggling to make any money after years of neglect and unable to face the cost of upgrading to diesel/electric operation.
On the first sniff of possible government compensation the companies were eager to take the money and be nationalized out of existence.
Before they do so they better consider the arrogance of the systems engineers at Airbus. their attitude is that they know how to handle emergency situations better than the pilot, therefore when an unusual situation comes up the autopilot kicks in regardless of whether the flight crew wants it to or not.
This is was brought Air France 447 in 2009. The pilot could not control the aircraft because the autopilot kept kicking in and taking control based on faulty readings from the pitot tubes (airspeed indicators), which had iced up. Whenever the cockpit crew turned the auto pilot off and tried to correct the aircraft's flight, the flight computer assumed that they were incompetent and therefore re-asserted control of the aircraft from them. With the pitot tubes iced up, the computers thought the plane was flying too slow so it put the aircraft into a dive to pick up speed. The pilot would turn the autopilot off, pull the plane back up, only to have the damned thing re-assert itself and put the plane into a dive again. Without a master override, he couldn't keep the plane from destroying itself. Eventually it crashed into the ocean. This is also the reason the Airbus 380 which lost an engine to a fire almost crashed; the autopilot assumed the situation was different and kept taking control from the pilot when it felt the pilot was acting foolishly.
Boeing aircraft don't do this.
"We have the academic and innovative capacity to take part, but we seem to lack the will to invest in the manufacturing part" - this is called the European paradox, a phenomenon that eurocrats have tried to believe for ten years but that has been identified as largely a myth in more recent studies (http://en.wikipedia.org/wiki/European_paradox).
The facts are that the combined public and private R&D investments in Europe are much lower than in the US, that the market is still very fragmented in national countries and taking risks is not rewarded.
A key difference with the Airbus case is that the aerospace sector was and is much more dependent on the government and so much more amenable to large-scale 'forced' consolidation by these governments - which was probably a very good idea, as Airbus shows.
Ms. Kroes usually knows what she's talking about, and a European chip technology company might make sense, but a central problem remains: most companies creating fundamentally new markets over the past decades are not European ones (Apple, Google, Microsoft,...) and that's not likely to change any time soon.
An airbus of chips? Late for delivery, plagued by subcontractor problems, not always tested adequately, and delayed by parts shortages, in addition to being single sourced? I suppose that if the larger substrate could be made much larger, that there may possibly be some benefit if the yield wound up being adequate. But the cost of a bad substrate would be MUCH larger, it appears.
"But if the likes of ST and Infineon, with their public shareholders, don't want to be conglomerated, what's to be done? "
That is why I said Eurocrats should "facilitate" not necessarily drive European chip integration. The lever to do this is a mixture of carrots and sticks e.g. direct financial incentives for integrated efforts e.g. in new technology nodes, and financial disincentives for direct competition in certain segments e.g. DRAM.
I agree with both of you -- in part.
I agree Europe can't afford to get out of the chip business. I am not sure it makes PERFECT sense.
And I agree you can waste a lot of taxpayers' money trying to beat the tidal forces of the free-market system.
Airbus was a success so why not try something. And collaborative R&D at Crolles without full corporate integration worked -- for a while -- before company interest in semiconductor manufacture slipped down the agenda and diverged.
But if the likes of ST and Infineon, with their public shareholders, don't want to be conglomerated, what's to be done?
Both Sokda and Seat are wholly owned subsidiaries of the Volkswagen Group. The VW group also owns Bentley in Britain, Bugatti in France, and Scania in Sweden. It is truly a Pan-European company now with mixture of mid-range and high-end offering.
Re. your second paragraph, I do not see the point you are trying to make about finished products vs. unfinished ones. Yes, European car firms outsource "some" steps/parts of the value chain but a lot of it is done in Europe. Anyway, analogies do not have to be perfect to be useful :-)
Europe cannot afford to skip chip fabrication, and if the US is managing to compete with the Far East, Europe certainly can. The pertinent point is economies of scale. The US is great at capitalising on it, Europe has not always done so because its edifice is still work in progress. The time has come to accelerate European economic integration in my opinion.
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