Euro Transport Consortia: First Airbus, Now "Railbus"

They are the European champions, my friend. They'll compete with the Chinese till the end...

Despite the imminent [?] withdrawal of the United Kingdom from the European Union, its time being considered a part of it can count as a clear success in at least one respect: Its participation in the pan-European aerospace consortium Airbus has more than lived up to expectations. British Aerospace together with France's Aerospatiale as well as their German and Spanish counterparts combined to produce a European powerhouse in civilian commercial aircraft with the resources to compete with American titan Boeing yearly for top sales honors in this lucrative business.

More recently, we've had a "one good turn deserves another" deal with European railway manufacturers Alstom (France) and Siemens (Germany) attempting to become a "European champion" in mobility. As with most mergers among manufacturing concerns nowadays, this attempt to increase scale stems from trying to compete with the upstart Chinese. Enter "Railbus":

Siemens AG and Alstom SA are expected to sign off on a merger of their rail equipment activities to create a new European champion, according to Bloomberg News. A deal has appeal for the German and French companies’ shareholders but governance, antitrust and cost-cutting could yet disrupt the journey. While a combined entity would control only about 14 percent of the 110 billion euro ($130 billion) rail equipment market, according to my rough calculation, the footprint would be bigger in parts of Europe.

An interesting argument in favor of activist European antitrust authorities permitting the merger is that, well, the Chinese have already merged together another rail mega-conglomerate in CRRC:

So will Europe’s antitrust authorities block it? That depends. After the 2015 merger of two Chinese rolling stock companies, the new entity CRRC Corp. dwarfs its international peers. Rail Giants CRRC has won rail contracts as far afield as Chicago and Kenya and China’s Belt and Road initiative will bring yet more international business its way. The fear is that the Chinese company's size plus access to cheap finance will let it crush rivals unless they bulk up too. In absolute terms, CRRC spends seven times more on research and development than Alstom, notes Morgan Stanley.

But it isn't unbeatable, at least not yet. International customers accounted for only 8 percent of CRRC sales last year, when its railway equipment sales declined. The Alstom and Siemens train businesses have performed quite well in the meantime, as rapid urbanization spurs demand for less polluting mass transit.

The great game is on in railways as the Europeans vie for business worldwide with the Japanese and now the Chinese. As with more efficient forms of transportation, sustainability may be the ultimate victor here compared to relying on more polluting road and air transport.