Airbus Naughty, Says WTO

Airbus Naughty, Says WTO

Boeing’s biggest supporters roared out of the gate Tuesday after the World Trade Organization issued a final ruling that Airbus enjoyed unfair subsidies from European governments.

“Enough is enough. For too long, workers in Washington state have had to fight an uphill battle. Instead of competing just with Airbus, they’ve been forced to compete with the deep pockets of European governments that supply Airbus with illegal launch aid,” Sen. Patty Murray of Washington said in a statement. Then she aimed straight at the tanker competition. “It’s clear that the A330, the very plane Airbus would offer our military, has received illegal subsidies that have hurt American workers. Now’s not the time to delay this competition further. Especially not for a company that is undercutting our workers. It’s time to stop bending over backwards to meet the demands of an illegally subsidized foreign company and to move forward with providing America’s military with an American-made tanker.”

Rep. Todd Tiarht, the Kansas lawmaker who has supported Boeing’s tanker bid with vigor, said that, “giving a vital national security component like the aerial refueling tanker to a foreign entity is reckless and extremely dangerous.”


The WTO ruled that European governments unfairly financed Airbus and harmed Boeing by providing what the AP called “subsidies through risk-free loans, research funding and infrastructure support.”

Rep. Norm Dicks, long Boeing’s most voluble and demanding supporter on the tanker deal, was uncharacteristically quiet in the wake of the WTO ruling. While he did slam the company for the subsidies it received, he did not mention the tanker in his statement. Perhaps the weight of being chairman of the primary House defense spending panel is beginning to change Dicks’ behavior.

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So will this have an effect on the KC-X competition?

Please inform me when the WTO protests American bailouts of auto companies and banks that compete with European counterparts. I won’t hold my breath…and the US subsidies were far greater.

And just out of curiosity, why would we complain that European taxpayers are willing to provide American jobs on their dime, while ensuring cheaper more capable refuelers for US taxpayers, and continued jobs for Washington and Kansas and new jobs for Alabama/Mississippi/Florida through a split buy.

Good Evening Cole,

Da**, I agree with you Cole. All I see here is Capitalism at work, no holds bared, winner take all. Economic protectionism and international deal making is as old as the market.

ALLONS,
Byron Skinner

Since the report hasn’t been “officially” released, I’m not sure what it says, or does not say. However, cute titles and sneering editorial comments can not minimize what is certain to be high grade octane thrown on the political fire for the tanker procurement.

DOD would be wise not to change a letter of the tanker RFP. EADS is “gaming” the process here. Their real intent is to negotiate changes the basic requirements of the RFP which will favor the larger A330 and hopefully “wait out” the Democratic led Congress until the mid-term elections.

If the leaked press reports are correct, and the A330 did benefit from subsidies, Ashton Carter, et al, would be daft to change the conditions of the RFP or even extend the submission deadline. USAF is on the verge of having this thing brought to closure with the existing RFP. Changes at this point will only reap the political whirlwind. Leave the damn thing alone. The French will have to get over it.

It’s clear that if Boeing delivered rubber chickens congress would still be awarding them the tanker contract. But the clueless way that the contract has been handled is a big prize for EADS. It makes it much easier for them to convince European governments to relax the arms embargo on China.

The Tankers affair shows that U.S. companies have an important advantage compared to EU companies because of the massive US military spill-over to the civil market.

Boeing, had to retire the B767 production. Winning this contract means that Boeing can freely escape the costs either to close the B767 assembly line or to transform it into an assembly line for the USAF tankers, which are based on the B767.

With the view to the coming huge investments needed in the next 10 years to develop the successor aircraft of the cash-cows B737 and the A320, a constant revenue stream of $100bn for aircraft development will give Boeing a major push.

We could wait a long long time before the Europeans invest such sums in their defense industry.

As to foreign manufacturer proxy war, can someone please provide an accurate list and dollar amount for Boeing’s 767 foreign content? I imagine it’s not small. “Made in America” no longer really means what it says. Just ask the Detroit auto manufacters.

Plus, we will have to await the future WTO ruling on Boeing itself, and its unfair and illegal subsidies (e.g., Commerce Department’s EX/IM Bank subsidies on exports) and from Washington State (tax rebates) and the Defense Department (R&D, IR&D, shared production lines, etc.).

Plus 2, how much of EADS do Americans own versus how much of Boeing do foreigners own? Would like to know where the profits are going.

Wait a few weeks the WTO is to rule on Boeing and it will be ten fold worse than what came out on Airbus…I am waiting and not relying on NY Times reports as they work for the Unions and DNC…Now the WSJ reports that it is not all that people think. All I know is that the USAF needs tankers so Split the Contract and put people all over the USA to work now. A real Job Stimulus and not DNC smoke and mirror tactics…

Patty is gone soon, she will be out of office soon as she is a Union Hack that feels the Feds need to help Union bailouts and nothing better than giving Boeing a fat DOD contract…

I disagree with our governments choice to commit to all the bail outs but the US government avoided that issue, since its “aid” came in the form of a purchase of prefered stock from the auto companies. The Banks recieved a loan from the Federal Reserve, a bank. Banks share money all the time. The only reason it drew public attention was the amount of money involved and the amount of risk involved. In no other way was it different from the day to day operations. The buy up of bad assets was done by the Treasury, as means of recapitalizing those banks, but unlike a subside or loan the US government was once again purchasing something. None of those things go against the WTO.

We would complain about the European taxpayers “providing jobs” for a number of reasons. First is the fact that the EADS would provide fewer jobs to than Boeing. Next issue is the exiting of money from this country. While both companies purchase components and materials from outside the country, any money that EADS profits would leave the country. Third is risk, Boeing currently produces a tanker and has experiance, EADS doesn’t. The airbus A330 tanker would likely become a longer more drawn out development. When the long term life cost of the two planes were corrected the Boeing design became more affordable.

Where was all the crying from Capital Hill about American jobs when Boeing outsourced the 787 Dreamliners wings and fuselage sections to Japan, the ailerons and flaps to Australia, the fairings to Canada, horizontal stabilizers to Italy, landing gear in France, Doors to sweden, Floor beams to India??? Nobodys tanker is going to solely be constructed in America,. Congress needs to worry about US businesses outsourcing their call centers to other countries, I shouldn’t have to speak to someone in India about my Verizon phone plan.

Thanks, Chris. So, in dollars, how much of the 787 is foreign? 80%?

Jeff,
I see you’re drinking the Federal Reserve/Treasury kool-aid again. In the big bailout, the U.S. borrowed money it didn’t have, at interest rates it dictated, to buy companies that should have gone bankrupt. How is that not an outright subsidy? Just because you call it equity? That’s a sham transaction and a bigger Ponzi scheme that Madoff!

Donot let pfcem hear you say thator he will refer to you as a kool-aid drinker. If the WTO rules against Boeing wonder what all the Boeing backers will say, how the EU told the WTO to rule against Boeing? If they do rule against Boeing then the playing feel would be even again

Not only does our military carry the heavy freight for NATO, do we have to subsidize their aircraft industry as well

Gentlemen, let me provide a little perspective. I have worked for European companies here in the US. Numerous times have I seen promise after promise of investment, growth and work. And I’ve seen two different companies CLOSED by the same persons making those promises (despite being highly profitable). Thank God a group of us finally saw the hand writing on the wall and started our own company. We now employ over 100 highly paid engineers and other skilled individuals, most of whom worked for those Europeans. I don’t believe for a minute that Airbus had ANY intention of creating that many jobs here, no matter what they promised. They would have always found an excuse, (too hard, workers not good enough, too expensive, bad exchange rate — take your pick) not to move more than a token number of jobs to build that airplane in the US. Please, keep the tax dollars here, the profits here and the jobs here. And NEVER, EVER, EVER trust EADS.

Some loose questions in answer to some of you:

What are those Antonovs doing in the stream of C-17s?
Why is GM closing down Opel and (ex) Bedford after it made such great profits in WWII by providing allies and axis with their trucks?
Why is Detroit a forgotten town full of unemployment?
Why is the B-52 so similar to the 747?
Why do lots of other countries buy EADS tankers if EADS is too stupid to build tankers?
Why don’t the US of A fight their own wars alone?
Why do we have Italian side arms and lousy cabines ‚ade in the USA?
Why did the sobs from the US of A scam the whole world into a recession?
And why, finally, do I feel like I am in a third world country whenever I travel Greyhound?

Hmmm, new large $4 billion TheisenKrupp Steel and smaller Berg Pipe plants (both German) near Mobile, Mercedes SUV in Alabama, EADS light utility helicopters in MIssissippi, new Kia plant in West Point, GA; Hyundai plant in Montgomery. new Toyota plant in Mississippi, Boeing moving 787 production to South Carolina to join BMW…

So now Boeing wins with no competition on the tanker contract, no justification for the contracting officer to worry about, no federal acquisition regulations to get in the way of a happy congress and their pet corporation. One big happy family and hopefully a viable tanker in the end,

Right, because Airbus bailed out of the competition FAR suddenly does not apply to the contract. Let me check my yellow book for that rule.

Just look at total debacle that the Airbus transport is. And it’s not even a tanker just a hauler.

US Gov’t is not buying 787s. What does this have to do with anything? The main cannon on M-1 is German btw.

EADS is partially Euro Gov’t owned. Boeing is not. Anyone can buy shares in Boeing and some of the companies that own EADS stock. I doubt there’s an easy way to determine ratio of ownership by residency even for Boeing. And for EADS it is even more difficult given its structure. But at least 10% is owend by the French Gov’t sequentially through two entites.

The “Italian” side arms are made in the U.S. factory in Maryland.

NATO coutries buy EADS tankers because they’ve already subsidized Airbus, they partake in rabid protectionism at the same time they accuse us of it.

The B747 has absolutely nothing in common with a B52 except that it has 2 wings.

The rest of your questions were about as on target as those… you can’t make a statement in the guise or a question when that question isn’t even factually accurate.

The protest was filed some time ago and it had nothing to do with the KC-X. It had everything to do with Airbus being able to launch new designs/airframes at little or no risk. The argument was subsidies that Airbus rec’d from the governments of consortium members versus the tax breaks states were willing to give Boeing to move operations, or parts of operations, to their turf. The WTO seems to have agreed with Boeing.

The auto bailouts are whole other matter. They do not seem to have hurt import sales much.

Slightly off topic, but we’re 24 hours away from this week’s “Friday tanker surprise”. Any guesses as to what its going to be? Maybe Indonesia announcing their interest in submitting a bid? ;-)

Or…DOD leaving well enough alone and announcing there will be no (as in nada, zip, zero) changes to the RFP? Secretary Gates stated before Congress yesterday that the basic requirements will not be changed. Extend that “no change” to the request for deadline extension.

Check the Data Jeff, the tanker if used with A330 will not only create new Aerospace Jobs in Alabama with 2 new plants, but the bases that will be home to the aircraft will have a construction boom as most do not have hangers large enough for these airframes and that would be a good thing for many military communities, what a real stimulus that would be…Realize it is a Global World, I for one can’t wait to see the WTO report on the 787…

I agree, Jimbo, that EADS has no real basis to complain, but that won’t stop them, or their allies in the media & blogosphere from decrying about American “protectionism”. Opening the door wider so the French can put in a bid will only guarantee unending conflict and protests.

The RFP is out there. If EADS wants to bid, fine; if not, adieu. NO CHANGES.

Aurora you need to stop your bashing of the French, Airbus is in America to stay. Kansas has an engineering facility that is even expanding right now and with the support of the same US Senators and Congress people from Kansas, so please can’t we all agree to have the best plane for the USAF, I have talked to pilots from 135’s that have flown with the Austraiian AF and love the EADS tanker…

Bigmac go to McDonalds and get a sandwich and calm down. You are a protectionist, if your case had merit then why did Boeing sign a deal with a University in Japan and not Washington or Kansas for future development. I hope your company can get a piece of the pie so you can hire more workers, but having competition is a good thing and it is a global world so deal with it…

Greyhound, hell I feel that way on any airline in the USA not just Greyhound…

They are Kicking Boeing all over the place and now Brazil and Canada has two companies that are going to be involved in the 737 & A318,319,310,321 market and will kick both Airbus and Boeing…Global world, look at both Boeing and Airbus in China showing them how to build planes too.

Jimbo, because they have submitted a current airframe and not old one that is 30 years old like the 767 and A310, I for one would like to see DOD spend my tax dollars on a split and have Boeing submit the 777 too as the pacific ocean is a big area to cover…

All I have to say is, build these craft in the US with a US corporation. Keep key military hardware american, I don’t want any sort of breach due to overseas corporations being involved.

Indeed, one wonders just how independent EADS North America is from the parent company, EADS?

Right Josh, Saudi Arabia is in Europe and an EADS partner.…
The rest of what you say is of the same calibre.

After two rounds of competition in which mistakes were made by EVERYONE at least once: the USAF took 7+ months to re-write a FINAL RFP and put it out for the competitors to satisfy with their best design proposals. In the last year there was LOTS of talk around Boeing revolving around the fact that IF the USAF wanted a BIG Tanker, Boeing should propose a B777 variant, (instead of assuming they knew better than the customer what the customer needed). As it turned-out, the Latest-Greatest RFP is written for a KC-135 replacement. (Not a KC-10 replacement). And that’s where the whole Airbus/NOC partnership fell apart.
If Airbus/NOC were really planning to COMPETE, Why don’t they propose an A310 variant (A310 wing span 144 ft, B767 w-span 156 ft, A310 length 153 ft, B767 159 ft)? They’re Professionals aren’t they? EADS/Airbus advertises they are the worlds biggest and best… Why can’t they use their expertise in aircraft design to COMPETE for the USAF CUSTOMER’s RFP? If they choose to quit instead of compete I say the EU Politico’s, and NOC executives have no right to complain at all.

AIrbus already backed out of the competition.

Doesn’t Boeing get susidies from the U.S. government also?! HMMMMMMMMMMM!?!?!?

I own EADS stock and live in the USA so you have no merit with your arguement…Sure there are French that own Boeing too, ever hear of the Globalization of planet Earth…Wake up and stop drinking the Kool Aid, I for one would like to know how much Mr Lynn and Carter both were making from Boeing on K street when they left DOD after the Clinton Administration and then after breaking his promise brought back by Obama…

From a National Security perspective we should do all we can to keep military hardware design and procurement in the US.

Anyone remember April 1986, the Libyan raid? The United States was denied overflight rights by France, Spain and Italy as well as the use of European continental bases, forcing the Air Force portion of the operation to be flown around France, Spain and through the Straits of Gibraltar, adding 1,300 miles (2,100 km) each way and requiring multiple aerial refuelings.

History has a way of repeating itself! If for some reason down the road the Europeans have a disagreement with us on policies etc again, shut down the parts line or delay delivery it will hinder us big time! Can’t refuel cargo planes, fighters, bombers, we’re grounded!!

Also if EADS wanted to stay in the competition they should be offering a same size aircraft comparable to the 767 instead of trying to tell us what we need! Keep in mind going with a bigger aircraft comes with additional costs, ie; bigger hangers, bigger flight lines and runways, your limited to land at certain airfields, bigger support equipment and costs per flight hour will be more! So where is the savings and the best bang for the buck?? National Security should be 1st priority then everything else afterwards!

Also any one has been keeping up on the news! France is also setting up a deal to sell 2 Mistral class helicopter, troop transport ships to Russia! So who is our allies and a part of NATO???

Mike,
For the record, the overflight issue was driven by the U.S. Air Force wanting to play. The U.S. Navy was on-station with an aircraft carrier and could have done the whole Libya raid all by itself. Internal Pentagon politics was at stake, not national security.

Well actually no, unless you consider defense contracts and NASA contracts subsidies. Boeing bet the whole company on the 707 program and almost went bankrupt on the 747. They have received local incentives to relocate or to expand somewhere, but that wasn’t the US Government. Can you name one subsidy please

fthomas, my experience is based upon fact. You provide no rebuttal which deals with the facts of EADS and this particular program. And my company has no dog in this fight, but I do have tax dollars in it. My comment is based upon what I have seen, and experienced and what I know to be the truth about this program and the EADS operation. You rebut with platitudes about “global world” and “competition is good”. OK, so let’s compete. Start with the recent WTO ruling about Airbus. Remove all subsidies by European governments to EADS and Airbus and make them compete on that basis, all the way back to it beginning. Then we can see how this shakes out. I am not a huge fan of Boeing, but I have seen EADS up close and personal.

Let’s see, $4 billion verses $35– $100 billion, seems like a fair trade to me. I thought the discussion was about EADS and the Airbus entry into the KC-X competition. And I was completely unaware that Toyota, and Kia had joined EADS. Please forgive my utter display of ignorance. Foreign investment across countries goes on all the time. This is not an investment by a private company into another private company, or building a manufacturing plant somewhere. This is US tax dollars paying a foreign company, mostly owned by foreign governments, to develop technology it currently doesn’t have to compete with a US company who already has the capability. All with a “promise” to keep some jobs in the US if they get the program. Sorry, not the same thing.

FINALLY AMERICA GETS JUSTICE FROM THE WTO. THIS IS GOOD NEWS FOR BOEING AND THE U.S.A..

The U.S. should use this victory and begin to rebuild it’s damaged civilian and military industrial complex. I hope Boeing does the right thing here and builds 100% of the Air Tanker in North America. No off-shoring or out-sourcing and part of it!

The U.S. trade deficit was $41 billion dollars last Janurary and is on track to lose more than half a trillion dollars again this year. It’s been like that or worse since 2000. The official U.S. unemployment numbers are 10% (15 million people), while the unofficial numbers are more like 17% (26 million people).

I also hope Americans begins to question her liberal free trade policies. The way they are implemented is crazy. Airbus is not the only example of America getting ripped off in trade. China, Japan, South Korea, India and the EU, etc, do not practice free trade like we do. They all protect their strategic industries. America should engage in pragmatic trade policies only.

Once Again, good news for Boeing and America.

U.S.A. ALL THE WAY!!!

JMN

That might be partially true, you never know what goes on behind closed doors at the Pentagon. The main point here is the USA was counting on it’s allies and they turned their backs on us.! Look how many troops each European country has in Afganistan as compared to us? Some of those countries talk crap about us, but when something happens or they need assistance who do they call, the USA!!

Like I said before, history has a way of repeating itself! If for some reason down the road the Europeans have a disagreement with us on policies etc again, shut down the parts line or delay delivery it will hinder us big time! Can’t refuel cargo planes, fighters, bombers, we’re grounded!! I don’t want our troops on the ground in a position where they need air support and can’t get it due to grounded tankers!

What FACT do you have except for protectionist rehortic from BOEING, get real BIG MAC and like I said before, go to McDonald’s and get a sandwich named after your handle here. Your tax dollars are very minor compared to the tax dollars that will now go to health reform and other policies. Wait on the WTO stuff, they will report soon on Boeing and if you think Airbus was bad wait till you see how Boeing for years has got funds and the big difference between Airbus and Boeing is that when Airbus sells planes they give it back to the governments involved. When was the last time Boeing paid back Washington or Kansas, I think never…

You must not know too much about EADS as if you did know them you would know that each time a plane is sold by Airbus that a percentage is then given back with interest…

Tyler,
This is happening every day and all started with Bill Clinton selling our info to China, not sure if you realize this but you live in a Global world now…

I realize that we live in a global world, and consumer products and the sharing of tech is inevitable. But when it comes to the military tech that defends this country, I want the United States to have full rights and be able to do whatever they want with the design without foreign governments. The main goal should be to make sure the United States is solvent first, unless the United States is free from security threats, I don’t give a damn what happens to the rest of the world, America first. The easiest way to do that is have as much of our military tech built here and build lots of it.

Apples and Oranges my friend and that was many years ago…

Different world today, but I do agree with you that we need to remember history…

The agreement that was in place with NG/EADS did have those protections in place, but now with NG dropping only EADS will bid alone, we do use some of the helicopters that they have and also our allies use the MRTT, EADS version of tanker (THEY LOVE IT TOO AND OUR PILOTS LIKE REFUELING WITH IT) but I do see your points.

JMN you need to wait before your victory celebration, WTO battle is just beginning, they are to release info on Boeing soon and it is not going to be too pretty…

With Military cut backs in personnel in the fall of 2011 I take a dim view of subsidizing any EU equiptment

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