Boeing Got $5B in Subsidies, WTO Rules

Boeing Got $5B in Subsidies, WTO Rules

The World Trade Organization confirmed its interim ruling last September, finding that Boeing received roughly$5 billion in illegal subsidies for some of its civilian aircraft. Airbus, who designed and built the plane that EADS NA hopes to modify for the coming KC-X airborne tanker program. Sen. Maria Cantwell of Washington, a vigorous Boeing supporter, said the latest ruling proved that the EADS NA offering did benefit from subsidies.

“There is a stark contrast between the WTO’s ruling today and their ruling last year against the EU. Today, reports say the WTO upheld their interim ruling and dismissed over three-quarters of the EU’s allegations, identified most of it as associated with U.S. export tax policies repealed in 2004 and reiterated their finding that Boeing did not receive any existing prohibited subsidies,” she said in a statement. “But last year, the WTO was unambiguous in ruling that Airbus had received an illegal subsidy of billions of dollars for aircraft-specific launch aid, including the airframe Airbus put forward as the basis for its tanker bid, and that that subsidy caused direct harm to the U.S. aerospace industry. This final ruling today confirms what we have been saying all along: It is EADS/Airbus that has benefitted from illegal subsidies relating to the Air Force tanker competition.”

Here is the New York Times’ lead on the story:


“A panel at theWorld Trade Organization ruled on Monday that Boeing had received up to $5 billion in improper subsidies for its 787 Dreamliner and other jets , giving it an unfair advantage against its European rival, Airbus, European officials said.

“The confidential ruling affirmed the W.T.O’s interim ruling in September in response to a longstanding complaint by Europe over United States government support of Boeing, officials briefed on the decision said.”

The paper goes on to quote Nefeterius Akeli McPherson, a spokeswoman for the United States trade representative, who “said officials in Washington remained “confident that the W.T.O. will confirm the U.S. view that European subsidies to Airbus dwarf any subsidies that the United States provided to Boeing.”

So the line appears to be that the European subsidies were bigger than the American subsidies. This does not provide a terribly solid ethical baseline for any future discussions since both sides engaged in illegal subsidies, whomever pumped more in. Please just let the contract be awarded to the company with the best product that can be built with a reasonable mix of risk and capability.

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Give the contract to EADS and charge Boeing with bribery and racketeering. The rule of law and the safety of the American people are more important than Boeing shareholder profits.

Do like the Navy just did with their LCS competition:

Decide not to decide !

(aka build them both ).

OOOps! Your ignorance is showing!

So both companies are now guilty of getting subsidies? In terms of actually getting a tanker this didn’t seem to accomplish much.

when you see sometimes, USA can give free fighter jet for kill foreign proposition and control this sector, i think that was similar with civilian aircraft and when we know boeing make miitary aircraft, i’m sure they (gvnt) gave more than 5bn.
In europe country don’t was really rich for help with billion one enterprise.They don’t have 700bn$ of def spending all years with sometimes one or two bn$ who fly away.See in france, when you talk money you make immediately big scandal.When france have buy (11 for 800m€) new rafale for save the line of production (minimum 11/year) , all medias, opposition or others people saying the government help his friend dassault, he offered 800m€ for free.
USA was different, their industry was one diplomatic and one powerful influance of their politics, specially military industry

I love the FACT how Boeing has been completing ignoring that in the initial tanker contract years ago, it was Boeing, not any competitors, who tried to bribe the procurement folks (sending whats-her-name up the river for it).…so effectively, they started this mess when they could’ve just played fair to begin with, and now they make accusations that Airbus doesn’t play fair.

“.…and that that subsidy caused direct harm to the U.S. aerospace industry.”

Gee, it’s not like Boeing lost any sleep in seeing its direct American competitors put out of business.
After all, they surely profited better with only one competitor now instead of all those others also (McDonnell Douglas, Convair, Lockheed’s large civilian aircraft manufacturing, etc)…and Boeing has profited on the production rights (and long-term maint contracts) of the C-17, which was originally McDonnell Douglas.

So don’t anybody be crying up a hissy fit over lost America jobs: Boeing could’ve just as well absorbed larger chunks of those failing American companies…but why bother, when some parts can be subcontracted to be more cheaply produced in china?

Shail,

You don’t know what you are talking about. Boeing did not bribe anyone. The chief DOD procurement officer, Darleen Druyan, approached Boeing for jobs for her daughter and son-in-law. She then approached Boeing about a job for herself (using her daughter as an intermediary). The fault begins at DOD. Druyan and Boeing CFO, Mike Sears, went to prison for six or eight months for lying in the investigation over the matter. It is idiots like you, who tell mis-truths, that make the world a difficult place.

Don‘t forget that Boeing is the US’s largest industrial exporter — let the world’s Airlines not buy Boeing. That would not be good for the US Industrial Base.
The EADS-NA tanker is just as American Made as Boeing’s. That is the fact.

James, be advised, EADS is a competitor supported by several european governments. Just because Northrup Gruman jumps onto their bandwagon it does not mean that the EADS tanker is just as American as Boeing.

James, America’s industrial base is eroding!!! 13 out of 16 major defense support industries are currently in trouble. Furthermore, 50 thousand factories have shutdown or left America since the year 2000.

America is in real trouble! The U.S. trade deficit is at half a trillion dollars a year and climbing.

Boeing should win the USAF Air Tanker contract and America needs an Industrial policy!!!

America has to wake up.

Regards, JMN

If it weren’t for lavish multi-government subsidies to EADS; it would not exist. EADS is an aerospace make work program for europeans, This is a way of life in Europe, the same goes for Airbus. Neither of these companies compete fairly in their markets.

Right…because Boeing came into the whole business through competing fairly…dont make me laugh… Its funny how Americans always cry for “fair competition” when they are uncompetitive, and deride said competition for being “socialist” or whatever, yet they do exactly the same — GM bail-out, Banking bail-out etc.. one long story of hypocrisy. The “free market” is a nice little illusion.

So what is your point? How is that an incentive?

it wasn’t exactly best value for the buck even for the new tech invented…

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