Override, when you write that US companies are not legally allowed to pay bribes I feel a certain cynicism coming from that quote. Rightly so, almost any deal in the airplane business that is done requires you to grease the wheels. It is a fact of life. In my country it is even a legitimate tax deduction (maybe that is the reason why the Airbus company is registered here). The deduction only counts for bribes paid outside of our country. I hate corruption, but I realize that this is the way things work in most countries. As Europeans we might take a more pragmatic approach than our friends across the Atlantic, certainly not the only case where this is so.
You mention a CEO of a North American carrier loosing his golden parachute after “irregularities” were discovered at the time of an order being placed for the first generation fly by wire aircraft. You are implying that he was illegally compensated one-way or the other by Airbus. I don’t doubt it for a second. In the States the last year has shown us what money hungry crooks a lot of CEO’s really are. The value of your own stock portfolio probably reflects this.
The following case is from first hand knowledge (although dating back 14 years). At my company the head of maintenance was pushed out when it was found out that he had a time-share in the Caribbean, which was paid for, by one of the major engine suppliers for our wide-body aircraft (it wasn’t GE or RR). Another was back in the seventies when the Queens husband got into a lot of trouble for excepting bribes from Lockheed (it was our “Watergate affair”) back then. Let he without sin …………
One thing that Camus is right about is that the USA represents such power in the world that it can force governments to kneel down. Collectively as Europeans we don’t have that power. In other words, when El Al evaluates an Airbus (and is considering ordering a few), Condit just needs to phone a couple of senators who contact the President who reminds Sharon on which side his bread is buttered on. The same goes with Taiwan, and a great number of other countries in the world. Business is Business. No Virgins in this game. I am sure Airbus has its ways as well.
Any complaint by both sides of unfair advantage are moot, and for public consumption. Sure Airbus received large start-up subsidies (and will continue receiving reduced ones in the current frame work). They used them well and produced a product that (although not perfect) is well thought out, and deserves its place in our business. They forced Boeing to get better, and will force them to do a lot more in order to preserve their position in our game. Derivatives just won’t do it anymore. When you are talking about subsidies you are talking about semantics. What is or what isn’t one? Does defence spending crossover count? Do we include R&D at places like NASA and DoD that directly benefit the civilian side? The USA just want to talk about the one form (direct aid), the Europeans would like to include all the indirect benefits that Boeing has. I think that something can be said for both approaches, and neither will have an impact.
If we are talking about aerospace R&D budgets. In the USA they are a multiple of what is available in Europe. A lot of it is geared towards defence, but represents a direct gain to the civilian side as well. Boeing is such an integrated company having its fingers in most pies, that it benefits from the huge defence spending in the USA, much more than Airbus does in Europe. Boeing not selling enough airplanes? Let defence place an order for 100 Boeing 767 tankers that kind of thing. Is it the best aircraft for the job, comes second. In Europe those kinds of orders are unheard off.
What I am trying to say is that the Europeans can return any complaint made by the USA on how unfair things are to sender.
Having both of these companies benefits our business. There is competition and innovation, and that is good for all.
As usual things are not black or white, and the shade of grey differs depending on your perspective.
Regards O,
Last edited by Otterman; 4th November 2002 at 06:57.