Airbus and illegal aid

[testpanel]

EU Failed to Cut Off Illegal Subsidies to Airbus, WTO Rules - WSJ (http://www.wsj.com/articles/eu-gave-billions-in-illegal-subsidies-to-airbus-wto-rules-1474554683)

[CurtainTwitcher]

From the fourth paragraph of your linked article (my bold):

The trade body in a future ruling is expected to find that the U.S., similarly, didn’t sufficiently address concerns about subsidies benefiting Boeing. It could lead to the EU being allowed to impose similar sanctions on U.S. exporters.

And no, I'm not in the the EU or US.


You might have also read about the recent $14 billion fine against Apple by the EU, then $14 billion fine against Deutsche Bank by the US? With apologies to Clausewitz, trade is the continuation of war by other means.

[oldchina]

The workers (Boeing and Airbus) work and the lawyers get rich.

Pointless.

[punkalouver]

Final decision may still be years away as appeals are still happening.

[notapilot15]

Finally it takes WTO to put an end to these financially nonviable fancy projects.

[ExDubai]

Finally it takes WTO to put an end to these financially nonviable fancy projects.
Which one, the Dreamliner or the 747-8 ?

[KenV]

Which one, the Dreamliner or the 747-8 ?
One was financed by illegal non commercial government loans/grants.
The other was financed by standard commercial loans.
Guess which one was which?

[Scuffers]

Boeing is top winner of state, local tax breaks | McClatchy DC (http://www.mcclatchydc.com/news/nation-world/national/economy/article24781525.html)

"Boeing is the biggest winner of state and local tax incentives, receiving more than $13 billion of them, according to a nonprofit watchdog group that tracks the subsidies."

[notapilot15]

Which one, the Dreamliner or the 747-8 ?
A380 and B777X.

B748 is done anyway and SEC will take care of alleged B787 accounting issues.

Winding down A380 is not a big shocker to Airbus, but Boeing is burning cash $12 Billion on B777X with the expectation of Washington State will give $8.2 Billion over program life period.

Imagine if WS cannot give incentives to B777X for any reason. Hopefully leaders in Chicago ivory tower have a plan B other than Chapter 11.

[pax britanica]

I think Clauswitz said diplomacy is war by other means but you are right in making the same allusion- warning for the UK there in trying to take on trade negotiations with the huge global 'blocs'/ Not much chance of a good deal being done is there.

Also Boeing is heavily supported by having virtual exclusivity as supplier to the USAF and USN something airbus doesnt have in the Eu and yes the workers at AB and Boeing do the hard work and lawyers get a fortune for a pointless exercise-why shouldnt airbus get support from the Eu and why shouldn't Boeing get support from Uncle Sam. They are startegic industries and it would be better to accept them as such rather than chase a pointless holy grail of competition just a because a few ivory tower economists think that market forces will protect consumers interests. Try that on the UK energy market to see what a facile concept that is compared to EU mobile phone roaming charges where the regulator eventually said enoughs enough they are banned.

As my Uni lecturer put it Economics is the history of money , its not a science and it is no use for predictign anything

[oblivia]

Global trade rules have nothing to do with economics. They're about politics and, more specifically, American imperialism.

[CONSO]

Global trade rules have nothing to do with economics. They're about politics and, more specifically, American imperialism.
Actually the US agreed to GATT92 which allowed Airbus to become viable thru low cost government loans. But the system was gamed such that payback of loans in some cases did not happen because sales ' targets' were not met by certain dates- and the loans get forgiven. Writeoff of loans is different than tax breaks- one must make a profit to pay taxes at any rate. By and large Boeing has to finance planes thru normal loans and retained profits.

Airbus- EADS gets the option to not pay back. But both sides game the system .

[Scuffers]

then we get to US defence orders and contracts.

name a single major contract awarded to AB over Boeing...

for example, look what happened over the KC-X tanker program..

https://en.wikipedia.org/wiki/KC-X

[Ian W]

then we get to US defence orders and contracts.

name a single major contract awarded to AB over Boeing...

for example, look what happened over the KC-X tanker program..

https://en.wikipedia.org/wiki/KC-X
Yes look at it.
B won that by cutting the price to a level that couldn't be matched by AB and by assuming all the program risk, if it slips B pays.

[pax britanica]

If Boeing won it as suggested that virtually 'dumping' in trade terms and thats supposedly not allowed. AB won a very vigourous and tough competition to build the tankers and that meant they had to offer a very aggressive price and terms which Boeing could not match until the 'had' to. I am sure they will be compensated for that.

And I am not anti Boeing -when it comes to Military, and critical civil infrastructure , stuff you should always (be able) to buy your own. The UK of course being an exception to the Euro Bloc and the US model falls between two stalls and pays more for the wrong thing and has it made overseas as well

[Scuffers]

Yes look at it.
B won that by cutting the price to a level that couldn't be matched by AB and by assuming all the program risk, if it slips B pays.
That's simply not what happened.

AB won the contract, Boeing cried, got the process thrown out, then the specifications changed, etc etc.

AB then realised there was no point in wasting yet more time and money by re-bidding.

Look, I have no issue with the US wanting to keep stuff like this in-house so to speak, but to pretend it's an open process, all above board etc is laughable, this has to be the biggest subsidy of domestic manufacturing there is, and to pretend otherwise is just laughable.

[CONSO]

" If Boeing won it as suggested that virtually 'dumping' in trade terms and thats supposedly not allowed."

Please do not confuse commercial trade versus military contracts eg dumping does NOT apply.

And as to subsidy re tankers- its NOT an issue. The 767 has been around since 1981-82. The basic airframe was Mil spec certified in the late 1990's. Boeing fubared the 'lease' arrangement for tankers after 911 in 2001-2002.Partly garbaged up the Italian and Japenese tankers in the early 2000's . After assigning the old MDC whiz kids for the current tanker contract to upgrade the wiring from commercial to mil spec- they found out said power point rangers did not know the diffeerence between cvommercial wiring and mil spec requirements- thus causing a major delay- rewiring, etc. None of which was subsidized .

[PDR1]

" If Boeing won it as suggested that virtually The basic airframe was Mil spec certified in the late 1990's. [...] upgrade the wiring from commercial to mil spec [...] did not know the diffeerence between cvommercial wiring and mil spec requirements...

That's really quite funny.

Do you actually know what any of these terms really mean? What is the difference between "commercial" and "mil-spec" wiring requirements then?

Are you alleging that Boeing allowed unqualified staff to do wiring work on aircraft without adequate supervision? That's quite a serious allegation you know - the sort of thing people go to jail for. Do you have any evidence to support the claim?

[CONSO]

it was reported in the press by Boeing that they had to rewire about a half dozen tankers- and I know some who were involved in trying to fix the mess.

I said nothing about unqualified staff doing wiring- wiring is done by IAM personnel according to O&IR paperwork produced from drawings and lists. The basic problem had to do with multiple paths and separation of wiring issues as compared to allowable commercial. For but one example- virtually all mil spec wiring requires EMP hardening/shielding and separation
Have a nice day !!

From wiki

In July 2014, Boeing recorded a $272 million pre-tax charge to cover a redesign of the tanker's wiring.[52] (https://en.wikipedia.org/wiki/Boeing_KC-46_Pegasus#cite_note-52)[53] (https://en.wikipedia.org/wiki/Boeing_KC-46_Pegasus#cite_note-FlightglobalBoeingReportsKC-46ALossRejects-53) The wiring issue arose when it was found that 5-10% of the wiring bundles did not have sufficient separation distance or were not properly shielded to meet an Air Force requirement for double or triple-redundant wiring for some mission systems. In September 2014, it was confirmed that the wiring redesign would delay the first 767-2C flight from June 2014 to November 2014.[54] (https://en.wikipedia.org/wiki/Boeing_KC-46_Pegasus#cite_note-54)[55] (https://en.wikipedia.org/wiki/Boeing_KC-46_Pegasus#cite_note-55) The 767-2C's first flight took place on 28 December 2014; it flew from Paine Field (https://en.wikipedia.org/wiki/Paine_Field) and landed at Boeing Field (https://en.wikipedia.org/wiki/Boeing_Field)

[Aluminium shuffler]

Boeing are hypocrites. Airbus may get state aid up front, but Boeing get state aid in a murkier fashion of tax breaks, work practices exemptions and government contract exclusivity. There is little difference in terms of competitiveness, but there is a world of difference in employee conditions. I know which I consider more "honest". But, the US complaining about others when struggling to compete is nothing new. All the rubbish between the "Big 3" and "ME3", citing state aid in the ME while overlooking the Chapter 11 trading, allowing massive advantages to the Big3, the whining about competition in the EU, which was totally unfounded, the blocking of Concorde flights just because the US still couldn't make something similar 40 years on...

[Tom Bangla]

Unfortunate, but perhaps inevitable, that an interesting and valid discussion gets hijacked by transatlantic oneupmanship.



Disclosure: This post has been subsidised by the China Investment Corporation.

[PAXboy]

Tom Banglahijacked by transatlantic oneupmanship.
but - mostly - that's what trade is ... :}

[Scuffers]

And the Yanks never did get to make a supersonic airliner (even the Ruskies did that!)

[rottenray]

That's simply not what happened.

AB won the contract, Boeing cried, got the process thrown out, then the specifications changed, etc etc.

Actually, there were spec changes, in mid bidding cycle.

Those changes favored the 330-based frame, which our Air Force didn't want in the first place.

Once those changes came to light - which was the basis of Boeing's complaint - the ensuing investigation, which is rather well documented, resulted in Airbus choosing to not compete - again - with a product that didn't really fit the original bid.

Read up on it before you come complaining back to me.

I'll add a snarky remark right here. Most of our troops don't want anything except Boeing in that role.

The reason is simple. Far before the formation of Airbus Industrie, KC-97s and KC-135s were refueling our fighters and everyone else's.


A final technical concern, the 330's fly by wire system, came to light. The 767 can do some things which the 330 simply can't or won't.

Anyway, cheers, have fun fighting about this, and as usual on this site, running the US down.

[rottenray]

And the Yanks never did get to make a supersonic airliner (even the Ruskies did that!)

Not to get too pointed about this, the Russian supersonic never really did well. Your Concorde did for a while, but I get the feeling that it never really turned a profit.

That's another subsidy we should discuss in the future in a different thread.

In the mean time, keep blasting away and looking uninformed. It's fun to watch!


Cheers.

[Rwy in Sight]

My paternal grandmother coming from an island with rich and smart people used to say: do you know how to break rules is a start but knowing not to get caught is basic if you want to do successfully.

Maybe Airbus should have seek advice from my grandmother.

[CONSO]

" A final technical concern, the 330's fly by wire system, came to light. The 767 can do some things which the 330 simply can't or won't."

For example- cable-rat-hydraulic backup for minimal flight control when everything else turns to poo has been on 767 since day one over 30 years ago. check out Gimli glider . ..

[PDR1]

For example- cable-rat-hydraulic backup for minimal flight control when everything else turns to poo has been on 767 since day one over 30 years ago. check out Gimli glider . ..

Oh for crying out loud - this is embarrassing. Of course, as we all know, only american aircraft have ever had standby flight controls, and no fly-by-wire airliner ever had the ability to continue flight without engines running. That's why Air Transat 236 plummeted into the ocean the second the engines stopped.

Oh hang on - did it...?

[CONSO]

Ohhh - groooan- can you spell EMP effects on ALL electrical combined with NO hauptic feedback ? EMP effects are much more likely with military- and even with shielding- a LOT of things go poof...

But for a more detailed explanation go to military thread

http://www.pprune.org/military-aviation/550230-more-kc-46a-woes.html

BTW-The initial subsidy argument/issues re Airbus started in year 2000 by a Boeing union.- In mid 2001- Boeing hired an ex deputy sec of defense ( Rudy deLeon ) to pursue WTO issues independent of Union. When 911 happened, things turned to worms re commercial- and a suggestion to prop up commerical with insurance and lease 767 tankers to keep at least that line open . Boeing then stifled Union work on a WTO complaint and elected to push the tanker deal since Japenese and Italian tankers were aborning at that time. Since funding was not available to purchase, a lease arrangement was proposed. But Boeing furbared that whole thing up via major mismanagement and the rest is history.

[Metro man]

What about the massive agricultural subsidies given by the US government to American farmers enabling them to dump their products on the world market at below the cost of production and still make a profit ?