Airbus's plans for the A350 have heightened tensions in the trans-Atlantic trade dispute. Airbus won approval from its shareholders last Friday to unleash a fresh marketing battle against Boeing by seeking orders for the new wide-body jet.
Mandelson said Airbus's plans for the A350 could only be viewed as provocation "by a rival that doesn't like competition. This market needs competition".
"Airbus's success is breeding envy and jealousy," he added. "Its expanding market share is clearly exerting pressure on its competitors, and this is the main driver of the dispute that has arisen between Airbus and Boeing."
EADS said on Friday it had not yet decided on whether to apply for government loans for development of the A350. Zoellick called the possible loans a "problem".
Airbus overtook Boeing as the world's largest manufacturer of big commercial jets last year, and both companies accuse the other of obtaining illegal subsidies.
Airbus has said it is entitled to apply for a third of the development cost under a 1992 European Union-U.S. trade deal, but Boeing maintains that deal is dead.
Columbia107 From Gibraltar, joined Aug 2004, 356 posts, RR: 2 Reply 2, posted (8 years 5 months 1 week 4 days 5 hours ago) and read 4131 times:
Certainly not envy when you have Airbus offering aircraft with a book value of US$55 million at circa US$30 million. At least that is what Reuter's is reporting when referring to the AirSong order for 40 short hall aircraft. Who on earth is going to refuse such an offer price.
My view is that Airbus strategy, with EU support (in order to keep highly qualified individuals employed) is to sell short hall aircraft to low cost airlines below book value with the purpose of selling long haul aircraft (with similar cockpit arrangements etc.) to the corresponding parent airline and which in fact carry a more lucrative profit margin.
Scbriml From United Kingdom, joined Jul 2003, 11362 posts, RR: 50 Reply 3, posted (8 years 5 months 1 week 4 days 5 hours ago) and read 4114 times:
The deal is dead ?
Since when ?
Since the US unilaterally withdrew from the agreement a few weeks back.
"Airbus success breeding envy and jealousy" Wow, Mandelson must have been browsing on a.net!
Just one question - under the deal, Airbus could apply for 33% loans for development of new planes. The US now says the deal is dead, so what is to stop the EU giving Airbus a 100% loan for developing the A350?
N79969 From , joined Dec 1969, posts, RR: Reply 4, posted (8 years 5 months 1 week 4 days 5 hours ago) and read 4084 times:
When the US the filed with the WTO --the deal died. Actually the genesis of Airbus is rooted in the envy and jealously among Europeans at seeing the United States produce Boeing, McDonnell Douglas, and Lockheed jets in the 1960s and 1970s.
BlueSky1976 From Poland, joined Jul 2004, 1709 posts, RR: 4 Reply 5, posted (8 years 5 months 1 week 4 days 5 hours ago) and read 4058 times:
"Envy and jealousy"? Of course!! Boeing will never get used to the fact that somebody else could have overtaken them... Not being numero uno is so "un-American and unpatriotic", lol... The fact is, they should just swallow their pride and keep doing what they are doing best - making airplanes, not playing politics. It will only hurt them in the long run.
Scotron11 From United Kingdom, joined Feb 2004, 1178 posts, RR: 3 Reply 7, posted (8 years 5 months 1 week 4 days 4 hours ago) and read 3960 times:
Boeing, Boeing, Gone! I do not think so! However, I do think this argument over subsidies to Airbus is Boeing trying to divert attention from the botched USAF refueling tanker fiasco. And more than likely a little politics entered into it because of the election, especially in Washington State, where Boeing aircraft are produced.
Subsidies? I feel Airbus is grown-up now, is making money, and should raise money privately, just like Boeing did for the 7E7. So what if Boeing received tax breaks, hell, even Airbus got tax breaks when they built their factories in the US!
Sebolino From France, joined May 2001, 3667 posts, RR: 5 Reply 8, posted (8 years 5 months 1 week 4 days 4 hours ago) and read 3929 times:
Just one question - under the deal, Airbus could apply for 33% loans for development of new planes. The US now says the deal is dead, so what is to stop the EU giving Airbus a 100% loan for developing the A350?
That's actually a very good question.
The deal was made to be sure that both part were not too strongly subsidized.
If the deal is broken, nothing forbid the EU to increase the loans, or even to give non repayable subsidies like Boeing has.
On the other hand, nothing would forbid the US gvt to increase the subsidies ... except the lack of cash.
Airbus would be forbidden in the US. So what ? That's not the biggest customer.
Cannikin From United States of America, joined Oct 2004, 98 posts, RR: 0 Reply 9, posted (8 years 5 months 1 week 4 days 4 hours ago) and read 3925 times:
Both are recieving help from their Govs, both are good companies. This is nothing more than a national pride war. A larger version of an A vs. B argument. Silly.
Cedarjet From United Kingdom, joined exactly 14 years ago today! , 7709 posts, RR: 55 Reply 12, posted (8 years 5 months 1 week 4 days 4 hours ago) and read 3854 times:
Airbus could never be banned in the US - since 40% of an Airbus is made of US components, there are a LOT of American jobs at stake. I would say that the demise of Airbus would harm the US nearly as badly as the demise of the Boeing Commerical Aeroplane ("Airplane"?) Division. Since only about 60% of a Boeing is made in the USA, and Airbus build more planes than Boeing, a healthy Airbus is probably as important to the US economy as Boeing Commercial.
fly Saha Air 707s daily from Tehran's downtown Mehrabad to Mashhad, Kish Island and Ahwaz
N79969 From , joined Dec 1969, posts, RR: Reply 13, posted (8 years 5 months 1 week 4 days 3 hours ago) and read 3797 times:
That tax break that Boeing may receive--any company can receive it. The state of Washington does not care. If Airbus want to build something in Washington state, they are free to do so and can ask for a tax break. Boeing cannot go to Brussels and ask for launch aid though.
The combined audacity or willful ignorance of history or both that are required to make such a remark about the U.S. is astounding. Like I said, Airbus was born out of European envy and jealously of the United States aerospace industry.
Although I very strongly hope that it does NOT occur, Airbus could be slapped with heavy tariffs for sales in the U.S. if the EU were to continue with is smoke-and-mirror position that every Boeing F-15 sale is actually a subsidy to BCAG.
The "Trojan Horse" effect of U.S. suppliers won't undermine the U.S. position really.
Maersk737 From Denmark, joined Feb 2004, 632 posts, RR: 1 Reply 14, posted (8 years 5 months 1 week 4 days 3 hours ago) and read 3740 times:
"That tax break that Boeing may receive--any company can receive it. The state of Washington does not care. If Airbus want to build something in Washington state, they are free to do so and can ask for a tax break. Boeing cannot go to Brussels and ask for launch aid though."
Knoxibus From France, joined Aug 2007, 200 posts, RR: 21 Reply 16, posted (8 years 5 months 1 week 4 days 2 hours ago) and read 3623 times:
ignorance of history European envy and jealously of the United States aerospace industry
As far as I am concerned, having great aircraft like Concorde and Caravelle (and i am sure I am missing on some other great planes) while Airbus was not even properly created doesn't show a particular envy or jealousy to my eyes.
I am not saying anything on the space program in those days (but considering the amount of money that was spent it would seem logic and the help of a lot of ex-german scientist, i.e. europeans)
And the brits invented the jet engine, etc...
..so yes, back in those days, I think we had every right to be jealous and build a company concept based on subsidies only and that would make crap aircraft sold at a stupid price...
No matter what anybody tells you, words and ideas can change the world.
Scorpio From Belgium, joined Oct 2001, 4934 posts, RR: 46 Reply 17, posted (8 years 5 months 1 week 4 days 2 hours ago) and read 3582 times:
Boeing cannot go to Brussels and ask for launch aid though.
No, but they can go to Washington (D.C. in this case) and ask for launch aid. They won't get it, but that's Washington's problem, and not that of the EU. It's perfectly legal for Boeing to get launch aid under the 1992 bilateral. Washington not giving that aid is THEIR choice. The bilateral is not unfair for any manufacturer, because it allows for equal subsidies for both.
Dayflyer From United States of America, joined Sep 2004, 3807 posts, RR: 4 Reply 18, posted (8 years 5 months 1 week 4 days 1 hour ago) and read 3549 times:
"Subsidies? I feel Airbus is grown-up now, is making money, and should raise money privately, just like Boeing did for the 7E7. So what if Boeing received tax breaks, hell, even Airbus got tax breaks when they built their factories in the US!"
Finally, common sense from someone in Europe! Thank you Scotron11.
This is exactly the US argument. If Airbus is SO good and making money, let it stand on it's own two feet. Quit sucking off the government titty already.
Either that or let the US provide subsidies to Boeing at the same rate. Whats wrong Airbus, are you afraid that the massive economic power of the US ($10 TRILLION annually GDP and growing) would be brought into play against you?
BlackKnight From United States of America, joined Dec 2004, 241 posts, RR: 0 Reply 19, posted (8 years 5 months 1 week 4 days 1 hour ago) and read 3470 times:
This goes along with the discussion in the thread:
The end of an industry as we know it
PlaneSmart From New Zealand, joined Dec 2004, 739 posts, RR: 0 Reply 20, posted (8 years 5 months 1 week 4 days ago) and read 3398 times:
N79969
"Like I said, Airbus was born out of European envy and jealously of the United States aerospace industry."
Airbus was born out of frustration. Good aircraft built in Europe like the BAC111, Trident, Caravelle, Mercure were doomed to low sales.
European manufacturers were constantly opposed in the mkt place by US manufacturers with US Govt export finance, available at well below mkt rates, & with generous terms and conditions.
And a civil order was usually a requirement for access to US military aircraft.
U also ignore work the Govt has bought for the US aerospace industry. The one i'm most familiar with is the Goshawk. Even allowing for modifications, it could have been manufactured for nearly a lot less in the UK. Justification for US assembly was 'strategic importance'. Really just a Govt subsidy to the US aerospace industry.
The pendulum has swung, and now the squeeks are coming from the other side of the Atlantic. Gives us lots of topics to discuss here.
Leskova From Germany, joined Oct 2003, 6075 posts, RR: 72 Reply 21, posted (8 years 5 months 1 week 4 days ago) and read 3391 times:
Dayflyer, the US is permitted to give Boeing support by indirect means - funding of research and/or development programs, for example - whether they chose to do so or not, or whether they use the full bandwidth available under the agreement (not that that plays a role, since the US withdrew from the agreement) is their, the US's, decision.
On the other hand, the agreement establishes that indirect support ( e.g. benefits provided for aeronautical applications of NASA or military programmes) should be limited to a 3% of the nation's LCA industry turnover. This discipline is primarily targeted at the support system in use in the US. In contrast to the European system of repayable launch investment there is no requirement for indirect support to be reimbursed and the generous ceiling of 3% is calculated on the larger basis of the turnover of the LCA industry and applies per individual year.
Nonetheless, like quite a few other Europeans on a.net I, too, would prefer it if both manufacturers stood on their own two feet - no direct and no indirect subsidies.
Unfortunately, and I've said this before as well, I don't really see that happening anytime soon - something for which I see both sides as responsible...
Flyabunch From United States of America, joined Nov 2004, 512 posts, RR: 5 Reply 22, posted (8 years 5 months 1 week 4 days ago) and read 3357 times:
"Subsidies? I feel Airbus is grown-up now, is making money, and should raise money privately, just like Boeing did for the 7E7. So what if Boeing received tax breaks, hell, even Airbus got tax breaks when they built their factories in the US!"
Not to whip a dead horse, but companies asking for subsidies from states, counties, and even cities in the U.S. to finance a new plant is quite common. Even smaller companies can apply for and get such aid. It is all part of politicians insuring their reelection by making sure that they create jobs for their constituents.
Rabenschlag From Germany, joined Oct 2000, 993 posts, RR: 0 Reply 23, posted (8 years 5 months 1 week 3 days 23 hours ago) and read 3301 times:
Not to whip a dead horse, but companies asking for subsidies from states, counties, and even cities in the U.S. to finance a new plant is quite common. Even smaller companies can apply for and get such aid. It is all part of politicians insuring their reelection by making sure that they create jobs for their constituents.
really? so you mean that direct subsidies to whatever companies are a widespread means of american economic policies? if so, why complain about europe with it's few state owned companies and direct subsidies?
you mean, every company which creates jobs in the US can benefit from these subsidies? i believe that. we have seen that happening with BMW and Mercedes when they set up their plants in the south.
but, the same is true the other way around, EU subsidies for US companies if they produce in the EU. talk about AMD's plant near dresden, germany, or GE's new research facilities near munich....
i must confess that i am sick and tired of the constant sissy whining of some US a.net fellows about unfair subsidies, especially with the amount of direct (not repayable or anything, just plain money) and indirect subsidies pumped into the 7e7. it reflects a bad and truly unamerican attitude: that of a bad loser.
OldAeroGuy From United States of America, joined Dec 2004, 3206 posts, RR: 66 Reply 24, posted (8 years 5 months 1 week 3 days 23 hours ago) and read 3258 times:
Can anyone direct me to a source that would provide a record of the monies repaid by each Airbus airplane model for the EU launch aid loans?
The terms for re-payment would also be of interest, i.e. how many airplanes had to be sold before re-payments began, what was the typical re-payment amount per airplane, interest rates, etc.
Thanks, Old Aero Guy
Airplane design is easy, the difficulty is getting them to fly - Barnes Wallis
25 Ken777: Most cities and states in the US develop incentives to lure plants (read jobs) into their area. I live in little old Tulsa and we've done it. More imp
26 Leskova: OldAeroGuy, I think you'll find what you're interested in on page 22 of EADS' "Financial Statements and Corporate Governance 2003" publication... http
27 PlaneSmart: Try searches on S&P, Reuters and Bloomfield. Notes in published accounts may give some idea, but you won't be able to determine who they are from, for
28 OldAeroGuy: Thanks Leskova. It will be interesting to see what's out there and what can be gleaned. PlaneSmart, one step at a time. First Airbus and then Boeing,
29 Hamlet69: "The deal is dead ? Since when ?" The U.S. announced (I believe in Oct.) that they are voiding the 1992 GATT agreement. According to the articles agre
30 Scbriml: Three words- World Trade Organization. Remember that the 1992 GATT agreement was a private pact between the U.S. and the E.U. And that would worry the
31 707lvr: Clearly, very few people in here or elsewhere have actually read the bill which gave Boeing the Washington State tax "subsidies." All it did was move
32 Boeing7E7: "Envy and jealousy"? Of course!! Boeing will never get used to the fact that somebody else could have overtaken them... Not being numero uno is so "un
33 Warren747sp: It's the best public works program in the world.! Certain to bring envy and jealousy from the unemployable world wide. W
34 Sebolino: The U.S. announced (I believe in Oct.) that they are voiding the 1992 GATT agreement. According to the articles agreed to by both parties, this means
35 PlaneSmart: In the last 7yrs the US govt has imposed tariffs on NZ butter, lamb, steel and aluminium. When NZ complained to the WTO, the US dragged out the review
36 Glideslope: We are ready. If I were the EU Commissioner I would be much more concerned over who is bugging who's conversations in EADS meetings? Not a good situa
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