Warbird Information Exchange

CHICAGO, June 30 /PRNewswire-FirstCall/ -- Boeing (NYSE: BA) today praised the World Trade Organization's final ruling that billions of dollars in European launch aid subsidies used by Airbus to develop its commercial airplanes are illegal and must end. The decision, which the WTO made public earlier today, also declares that a broad array of government funding for Airbus research and infrastructure development violated international trade agreements.

"This is a landmark decision and sweeping legal victory over the launch aid subsidies that fueled the rise of Airbus and that continue to provide its products a major cost advantage," said Boeing Chairman, President and Chief Executive Officer Jim McNerney. "The Office of the U.S. Trade Representative deserves tremendous credit for today's decision. We now join the U.S. government in urging full compliance with the ruling and a permanent restoration of fair competition within our industry," McNerney said.

Boeing Executive Vice President and General Counsel J. Michael Luttig explained the details and implications of the ruling. "Each and every instance of launch aid that the U.S. challenged was held to be illegal," said Luttig. "The panel said that without the illegal subsidies it received, Airbus would not have the aerospace market share it now enjoys. This ruling will alter the competitive landscape in the aerospace industry forever, forcing Airbus to compete in the marketplace on the same terms as Boeing."

Luttig noted that European-provided launch aid for the A380 was found to include prohibited export-contingent subsidies, which WTO rules require be withdrawn "without delay."

"Under today's decision, Airbus must repay the $4 billion in illegal launch aid it received for the A380 or restructure the A380's financing to proven commercial terms. Likewise, Airbus must abandon its plans to finance the A350 through the use of illegal subsidies," he said.

Luttig added that "the WTO rejected all excuses for continuing launch aid, the most pernicious form of subsidy Airbus receives, as well as all other forms of subsidies Airbus and parent EADS use for unfair advantage in the commercial airplane market and in defense markets for military-derivative aircraft. Airbus must now compete on its own, without the assistance of European taxpayers – assistance the U.S. estimates has exceeded $200 billion in value to Airbus."

Airbus has used government-provided launch aid to fund the development of all its commercial airplanes since the entity was formed in 1970. It now commands more than half the commercial airplane market. Launch aid typically comes in the form of no- or low-interest loans with repayment terms so generous that no repayment need occur during the several years it takes to develop a commercial airplane, and not at all in the event a program fails. Launch aid is a unique benefit to Airbus, as the U.S. government does not fund development of commercial products.

"The World Trade Organization has now unequivocally declared that government subsidies to Airbus violate WTO rules, are market-distorting, and have caused significant harm to America's aerospace industry and its workers," Luttig said. "Compliance with the WTO's ruling is essential to establishing a fair and level playing field between Boeing and Airbus. It also is essential to preserving the integrity of the WTO process and, by extension, the integrity of the rules-based trading system that has been a key driver of global economic growth."

Luttig said the WTO's ruling not only makes clear that there can be no new government-subsidized financing for Airbus' future A350 model, but also clarifies rules for other new market participants. "The ruling establishes an overarching principle governing all those entering aerospace markets: Anyone that wants to use government funding arrangements to develop new, competing products must demonstrate that monies are provided on proven commercial terms," he said.

The WTO is an independent, unbiased arbiter of global trade disputes. Today's ruling results from the U.S. government's 2004 decision to file a case with the WTO to end European subsidies to Airbus. While the WTO process allows the European Communities to appeal the ruling, Boeing expects the appeals process to conclude before the end of 2010.

"A successful conclusion to this longstanding dispute is now in sight. Within a year, the U.S. government will have authority to act decisively to ensure compliance if Airbus has not entirely restructured the A380 program so that it is financed and funded on objectively verifiable commercial terms," Luttig said.

"America thrives on competition," said McNerney. "American workers have shown repeatedly they can compete successfully in the global market. But they understandably insist that competition occur on a level playing field, with competitors playing by the agreed-upon rules."

The trade case against launch aid subsidies has enjoyed strong bi-partisan support from the U.S. Congress and multiple presidential administrations.

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" excuse me stewardess I speak jive"

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

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Don't make me go get my flying monkeys-

A fair trade ? hum, I don't disagree with you about the European public fund, but simply remember that the US governement put money in some car manufacturer also.
I suppose we have to fill a plain to the OMC and ban these cars from our market, due "unfair help"

After that I suggest, you take action to "close the mouth" of the politicians acting against Airbus simply because "It's noy an US product, and we have to buy only from US compagnies."

At this point, we will have a fair bid....

Ho, Yes, just a last thing: the only time Boeing won in this bid, It was demonstrated later, they cheated hard.... Fair Bid ? hum

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Sorry for my bad English:-(

But the bailout to the auto manufacturers and the banks was made with money borrowed from China! How much more international can you get?

Luckily Fiat never got any government funding, not that anyone buys Fiats anyhow...

BTW, I won't be buying a car anytime soon from a company that got a government bailout. I find it to be reprehensible. Government funding of a commercial product creates a lack of incentive to excel. The reason they "needed" a bailout wasn't because they lost money because their cars were too good, that's for sure.

Next I predict EADS will be complaining that if Boeing wins the tanker contract, the US government will be giving Boeing an unfair subsidy on their other commercial contracts... Maybe if Boeing didn't make any profit on government contracts, all would be well. The days of one company only doing military contracts and another only doing commercial contracts are long gone. Segregating the two is nearly impossible the way the aerospace industry has consolidated.

And, by the way, General Motors sells more BUICK automobiles in China than in the U.S. without any subsidies or under the table double dealing-that's one thing that philosophically and legally separates us in business from the rest of the world. It is ILLEGAL under U.S. laws to take bribes, kick backs, baksheesh, gifts, or any of a myriad of other 'gifts' to seal a deal (including lobbists buying a Senator a $50 steak dinner) and has been since the mid 70's when it was discovered that LOCKHEED was doing exactly that to sell the P.O.S. TRISTAR to Japan. I can hardly wait for FIAT/CHRYSLERS to show up in dealerships you'll be able to hear them rust sitting on the showroom floors. And as far as the auto bailouts, in my opinion, we could have faired better with another round of losing the modern equivellants of Studebaker, NASH, Hudson, and Packard than to throw money down a sewer pipe to save GM, interstingly enough, the ONLY auto manufactiurer who DID NOT take any Federal money was FORD who are turning in close to record profits (must have something to do with that Mullaly guy who used to run Boeing).

Now, as we've been saying for years, lets see how AIRBUS stacks up to Boeing when they both have to sell on their merits and shortcomings, not some cut rate,'got a job? we'll put you in a new 150 seat airliner' or 'we'll cover those expenses' government dealings to 'pick up the slack', remember here that Boeing is butting heads with the U.S. government on this deal, it's not a give away expensed freebee from the government to Boeing, it's a down in the dirt, kicking, biting, and scrabbling for the deal thing.

I've wondered, and posed this question several times in this exchange, where did the money for the several re designs for the A-350 XXL come from? Did someone 'find' a large sack of Euros that had just' fallen into the street' or did the Governments of the affected nations who have a stake in this re direct funds to cover re designing the re design that you just re designed? Designing an airplane isn't like crumpling up a typing paper sketch you did instead of taking notes in class, huge money is involved in even the tiniest changes and I'm fairly certain that they didn't 'pass the hat' around Toulouse to cover the extra costs of a re design. And another question that I've raised in this thread, what of the ex AIRBUS big shots who were caught (not accused, CAUGHT and convicted)of dumping their stocks in EADS in insider trading when it looked like the 380 was going to tank? Have any of them spent any time in a jail cell?

If you think you're going to take a crap in my hat and pull it down over my ears over Condit/Druyn you'd better look inside your own hat first because it's going to be pretty squishy too!

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Don't make me go get my flying monkeys-

UPDATE 2-Airbus, Boeing spar again as appeal looms
Reuters News 07/01/2010
Author: Tim Hepher
© Reuters Limited 2010.



PARIS, July 1 (Reuters) - Airbus and Boeing clashed over aid for the next generation of European passenger jets on Thursday, while details emerged on the battleground for possibly lengthy appeals following a major trade ruling on aircraft subsidies.

Both sides claimed victory on their favourite points in a 1,000-page ruling handed down on Wednesday by the World Trade Organisation, which ordered European countries to withdraw prohibited subsidies to Airbus for its A380 superjumbo.

The WTO also criticised weaker subsidies for other models of Airbus aircraft, but rejected several U.S. negotiating points.

The United States says the ruling showed European Union states must refrain from offering more development loans, which are at the heart of the dispute, for the future mid-sized Airbus A350.

Boeing also said Airbus should pay back roughly $4 billion in past A380 loans or restructure them to make them commercial.

Airbus rejected both points, saying the panel had neither said how the subsidies should be remedied nor had it tarred the European funding system as a whole, only the specifics of use.

"Boeing's wishful thinking to the contrary, the A350 is untouched by the WTO's findings. Together with the four governments, we are moving forward at full speed," Airbus head of communications Rainer Ohler said.

Boeing said a legal principle had been set.

"Continuing with plans to provide $4-5 billion dollars of taxpayer's money to Airbus for the A350 on anything other than market terms would be not only unacceptable but prohibited by the WTO ruling," spokesman Charlie Miller said.

"It really is time Airbus stood on its own two feet. It is a mature company, the biggest producer of commercial aircraft in the world with a cash pile of almost 9 billion euros. It is perfectly capable of financing aircraft development using its own cash and commercial loans."

POSSIBLE APPEAL

Airbus typically receives advances from its four founder states -- Britain, France, Germany and Spain -- for plane developments which it says it regularly repays with royalties.

The United States says the loans contain preferred terms and are illegally tied to exports. The European Union denies this and says the system itself has not been branded unfair.

A lawyer familiar with the European case, who asked not to be identified, disclosed two areas for possible appeal.

He said the WTO had relied partly on weak preamble language in contracts when it concluded that German, Spanish and British loans for the A380 were "prohibited".

It had also, according to the lawyer, wrongly interpreted Airbus forecasts about where the A380 might be sold as a binding commitment to export in return for the public advances.

"We think this argument -- the key reason for some of the launch investment to be seen as a prohibited subsidy -- is vulnerable on appeal," the lawyer told Reuters.

The comments give the first indication of possible tactics if, as expected, the EU mounts an appeal within 30 days.

"We are quite optimistic that an appeal by the EU has a good chance to succeed and overcome many of the issues that we don't understand in the current report," Airbus's Ohler said.

The question of whether past subsidies should be repaid is a sensitive area going to the heart of whether WTO decisions have real teeth -- but with no agreed definition, trade lawyers said.

That is because the world's trading partners cannot decide whether paying back old subsidies would violate an equally sacred rule that trading decisions cannot be retroactive.

No subsidy is known to have been repaid, lawyers said.

The issue was hammered out in a dispute between the United States and Australia over aid for a leather exporter over 10 years ago. Australia was ordered to recover a A$30 million grant but even though the United States won the case it did not ultimately press for the money to be paid back, lawyers said.

"It is a very complex area. To repay a subsidy would require careful analysis," said a trade lawyer not involved in the case but who asked not to be named to preserve client relationships.

Airbus parent EADS declined to saw how much it received for the A380, but its balance sheet shows 4.8 billion euros of total government loans and analysts say this is mostly for that plane.

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" excuse me stewardess I speak jive"

Comparing Airbus who never try to hide they received fund from European Countries, and the subsequent debate to know that legal or not, and on the other side, a CEO and a board member of Boeing put in jails, the choice is not very difficult.

As already, I'm not a big Airbus, simply a European tired to read rascit and xenophobic comments comming from two US citizen, working in the "other team" and unable to debate in a constructive way.

You will probably try to explain to us, how it was "fair" to forbide Concord to fly in the USA, to simply to try to save the already defunt US- supersonic airliners project....

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Sorry for my bad English:-(

You need to get out of the house more and spend some time amongst other human beings-or stop getting your talking points off the wall of the third stall.
AND, I notice that ONCE AGAIN you do not have the guts, nerve, or wherewithall to answer or rebutt the questions I just raised (yet again) about the EADS senior officials who were CONVICTED OF INSIDER TRADING-am I making the inquiries a bit too tough for you? or can't you come up with a plausable defence for what these thieves did?
Once more time, and for about the fiftieth time, Condit and Druyen are ancient history in this. Druyen DID serve time in a Federal Prison, what about the three former top guys @ EADS? Any gray bar junction time logged by them?
No one stopped or prevented CONCORDE from flying to, from, or over the U.S. the ONLY restriction was no supersonic flights over U.S. territory. Supersonic flights over the U.S. are restricted by the FAA and DoD to specific corridors which can be found clearly marked on any aerial navigation chart issued by the FAA for any pilots useage.. In fact the aircraft was given permanent #1 status into JFK every time it flew to New York and everyone else had to aquess to it so it could always be #1 in the pattern.
Your fall back on itself, circular 'arguments' about this prove that you seem to continue to have brought a squirt gun to a gun battle.
You are almost not worth responding to any more.

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Don't make me go get my flying monkeys-

racist
–noun
1.
a belief or doctrine that inherent differences among the various human races determine cultural or individual achievement, usually involving the idea that one's own race is superior and has the right to rule others.
2.
a policy, system of government, etc., based upon or fostering such a doctrine; discrimination.
3.
hatred or intolerance of another race or other races.
No! I do not see that in any text of this thread!


xenophobic
–noun
an unreasonable fear or hatred of foreigners or strangers or of that which is foreign or strange.

NO! I do not see any of this either!

You need to calm down! Remember this internet thing is VIRTUAL! So you dont need to get literally mad!

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" excuse me stewardess I speak jive"

What about are you speaking ? What's your trouble to put on the personnal way the discussions ?


Yes, there are cheaters who sells their shares (it's about that you speak ?) and there is an inquiries and yes, they are the bad guys. What's the link with the bid about the Tanker ? Simply to always critise Airbus. (Yes, and could you speak to us about the link between the Bush mafia and Halliburton: no bid for the contracts Irak, direct business for the "familly company", a very nice fair trade, for sure)


Ok, you and only you decide when the fact become past or not.
After these patethic cheaters, Boeing have to be definitely put outside the bid.
You think it's normal to cheat and say "Ok, sorry, I cheated, now we restart from the beginining and I promise to be fair this time".


Because selling share after having access to business information is a lower crime that stolling the country. Or do you think that USA have the right to explain to other countries how to apply justice ?


Speak a bit to us about the politic women who fight against Concorde in JFK...
And yes, of course, if the US supersonic project had succeed, the rules applied to supersonic flights had to be the same: the US birds had to follow the same restriction Your are serious when you say that ?


It's your responsability to be agressive, and to not achieve to deal with other point of view with calm and respect.

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Sorry for my bad English:-(

UPDATE 2-US, Ukrainian team dives into U.S. tanker contest
Reuters News 07/02/2010
Author: Andrea Shalal-Esa
© Reuters Limited 2010.



WASHINGTON, July 2 (Reuters) - A small U.S. company said it has joined forces with a state-owned Ukrainian aviation company to enter the hotly contested competition to build a new generation of aerial tankers for the U.S. military.

It's the latest twist in a nearly decade-long, drama-filled saga likely to end with a government contract worth as much as $50 billion to the winning bidder.

U.S. Aerospace Inc said in a filing with the Securities and Exchange Commission that it signed an agreement on Thursday with Antonov, which makes the world's largest cargo planes.

The company also said it told the U.S. Defense Department on Thursday that the team expected to offer significantly lower prices than other bidders.

Boeing Co (BA.N) and Europe's EADS (EAD.PA) are already locked in a fierce battle for a contract for 179 refueling planes to replace the aging U.S. fleet of Boeing-built KC-135 tankers, which are nearly 50 years old on average.

It was not immediately clear if the new team will be able to meet the Air Force's July 9 deadline for bids, especially since both Boeing and EADS had to meet several pre-submission deadlines to be allowed to submit their proposals.

No immediate comment was available from the Air Force or the Pentagon.

U.S. Aerospace said the new team also planned to bid for other U.S. military contracts, compete for work from other defense contractors, and sell Antonov aircraft, products and services in the United States.

It expects to bid three different models of Antonov aircraft, the AN-124-KC, AN-122-KC and AN-112-KC, which would be built by Antonov in Ukraine, with final assembly in the United States.

"We believe that we will be able to offer a superior aircraft at a significantly lower price than other potential bidders," the company said in a statement.

EADS declined comment on the news. No immediate comment was available from Boeing.

The Air Force's first attempt to replace its refueling tankers, a lease-purchase deal with Boeing that began in late 2001, was scrapped amid a major procurement scandal that sent two former Boeing officials, one of whom was a former Air Force weapons buyer, to prison for ethics violations.

The second attempt resulted in a contract to EADS and its partner at the time, Northrop Grumman Corp (NOC.N), but the deal was canceled after government auditors upheld a Boeing protest. Northrop dropped out of the competition in March.

Also in March, there was discussion about a possible joint venture between a U.S. defense contractor and United Aircraft Corp of Russia, an aerospace consortium partly owned by the Russian government, to bid for the lucrative contract.

At that point, Geoff Morrell, the Pentagon press secretary, said the U.S. Defense Department intended to run a fair and open competition and would welcome all qualified bidders.

U.S. Aerospace describes itself as an "emerging world class supplier" of structural airframe machined components and assemblies for U.S. commercial and military suppliers.

On its website, it said it provides components to the Pentagon, the Air Force and other U.S. defense companies including Lockheed Martin Corp (LMT.N), Boeing, and L-3 Communications Holdings (LLL.N). It said it supplies parts used on military aircraft such as the P-3 Orion, and wide-body commercial airliners such as the Boeing 747.

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" excuse me stewardess I speak jive"

A twin engined version of the AN-124? A quick check on GOOGLE says that US AEROSPACE just changed it's corporate name from New Century. They are shown as a subcontractor to LOCKHEED for P-3 parts and to Boeing as a subcontractor for 747 parts based in Rancho Cucamonga, CA. (near the Fontana NASCAR track), they lost $1.8 million last year and have $7200.00 cash in hand, I've got more than that in my checking account, and they are serious about getting into the tanker competetion?.OR, they can design a brand new AN-112 from scratch, or would that be a scaled down AN-96 airliners?

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Don't make me go get my flying monkeys-

Now everyone's got their armour of righteousness nicely polished, maybe I can take some of the shine off? I've hesitated about posting this, but if you don't say, who's to know?

Disclaimer - I'm not in the US or Europe, but I have slept in hotels in both. I certainly don't have a dog in the fight, except to see fair play for the value of the discussion.

For my American friends - you may not think there is any offence given or -ism from your point of view, but reading this thread and other Boeing vs Airbus or US vs Europe discussions here, it's almost inevitable that there's a number of casual remarks and presumptions of European failures, wierdness or shortfalls, evidentially based on looking from the US across the Atlantic, rather than an impartial evaluation.

If someone tells you they find your approach offensive, a good reaction it to take their view on board even if you don't agree. You are expecting no less from them.

When corresponding with someone who is not a native English speaker, you perhaps need to cut more slack for understanding - not just the language, but your cultural and national assumptions.

Sadly the salting of one-eyed fandom combined with remarks that can only come from a 'funny stuff foreigners do' world-view sucks the value out of threads like this, IMHO.

PS - My Boeing factory builds Airbus parts, which is about as much sense as the rest of the saga: - tankers, companies, countries, politics, news and the processes.

Regards,

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James K

"Switch on the underwater landing lights"
Emilio Largo, Thunderball.

www.VintageAeroWriter.com

I understand what your saying, and I'll speak for myself only. It seems that if you dont have a vested interest in this tanker deal then you shouldn't get so upset. I am not speaking of you James. EADS builds the aft pressure dome for the 787 and they are probably the only partner Boeing has that has not caused problems? So to me the frustration is not so much about what aircraft is chosen, its the fact that the pentagon keeps delaying the decision. I have a vested interest in this deal and not just as a US tax payer. Of course I want Boeing to be the manufacture of the new tanker. If I were the one to make the decisions I'd let the ones who fly, maintain and use these aircraft to make the decision A330 or 767. I am fed up with my governments indecisiveness.

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" excuse me stewardess I speak jive"

James, I know what you're trying to say, but the thing here is that those who've got the "opposing" view to Airbus have been stating facts - ones we have personal experience with - in this whole thing. "The Inspector" has worked on several sides of the lines over the years, 262crew has experience on both sides, I've had experience on all sides of the thing, and I can tell you right now - the A330 does not fit any of the KC-X specifications and in addition it's not the best plane for the job no matter what the specs without major revisions in its fuel system design and computer architecture because it's not designed to offload fuel - it's designed to fly people. Had they put up the A300 platform, I would've been okay had they won. The airplane's setup to work as a tanker with much less modification to the design and it's a proven long-lived airframe, something the A330 isn't. Until EADS makes an honest bid that fits the actual specs and not what they "think" we need, then I won't support their bid. It's that simple.