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Is Boeing Subsidized?  
User currently offlineSlovacek747 From , joined Dec 1969, posts, RR:
Posted (7 years 6 months 5 days 4 hours ago) and read 8170 times:

Hi all, I just got in an argument with a friend of mine on whether or not Boeing is subsidized by the US government. I know Airbus is but I thought that Boeing was completely privately owned by shareholders and did not receive subsidies from the gov't. I understand they get military contracts and so forth but am I correct in saying they dont get any handouts to develop new planes?

Thanks,
Slovacek747

80 replies: All unread, showing first 25:
 
User currently offlineVikingA346 From Sweden, joined Oct 2006, 515 posts, RR: 0
Reply 1, posted (7 years 6 months 5 days 4 hours ago) and read 8155 times:

I heard the argument! It was a brutal back and forth heated battle between two aviation enthusiasts, it was definitely something I'd pay money for to rewind on TiVo!

As for the topic, I am also very curious to know if Boeing is subsidized. I would think they would be for their military divison?



...you will walk the earth with your eyes turned skyward, for there you have been and there you shall return
User currently offlineBringiton From United States of America, joined Sep 2006, 866 posts, RR: 0
Reply 2, posted (7 years 6 months 5 days 3 hours ago) and read 8142 times:

Quoting Slovacek747 (Thread starter):
Hi all, I just got in an argument with a friend of mine on whether or not Boeing is subsidized by the US government. I know Airbus is but I thought that Boeing was completely privately owned by shareholders and did not receive subsidies from the gov't. I understand they get military contracts and so forth but am I correct in saying they dont get any handouts to develop new planes?

Boeing gets tax cuts to set up shop in a particular area be it in WA or elsewhere , they get tax insentives just like any other aerospace or large production house gets for setting up a shop in a particular area and contributing to the economic development of that region through employment and buisness generation . Boeing gets defence contracts through its Integrated defence and Phantom works devision but has to compete for those contracts in one of the most cut throat defence industries anywhere in the world ( BA-ID is second to LMA and in many ways have lost due to various reasons) . Those contracts might be for product development , technology development , procurment etc etc and FIXED profits are given to boeing as per US laws and dealings with the DOD . Boeing is not owned by the US govt (atleast i am not aware of it) and is a publically traded company with many share holders (some own more then others) . Boeing does not Get launch aids from the US govt to start a particular jet development , it hires sub contractors who compete amongst themselves for the lucrative contracts and get tax breaks etc to be more competitve so that they win over others .


User currently offlineRobsawatsky From Canada, joined Dec 2003, 597 posts, RR: 0
Reply 3, posted (7 years 6 months 5 days 3 hours ago) and read 8132 times:

Depends upon how you define subsidy but - they have both received some sort of direct and indirect subsidies in the past.

Check out these articles:

http://seattlepi.nwsource.com/business/207500_boeingeu12.html

http://www.businessweek.com/bwdaily/...h/oct2004/nf2004107_0871_db046.htm

http://www.buffalo.edu/reporter/vol35/vol35n40/articles/Boeing.html

http://seattle.bizjournals.com/seattle/stories/2005/07/18/daily22.html


User currently offlineSupa7E7 From , joined Dec 1969, posts, RR:
Reply 4, posted (7 years 6 months 5 days 3 hours ago) and read 8104 times:

The US Government and Boeing have a deep financial relationship. Mostly, it goes like this: Boeing sells aircraft, spacecraft, missiles, logistics and service products. The US Government buys these products.

Given a 5% profit margin (in 2005), Boeing made about $1.5B profit from $30B in defense sales, mostly to the Pentagon and NASA.

Perfectly legal. Is it a subsidy, no. Is it a big financial connection, yes.


User currently offlineBringiton From United States of America, joined Sep 2006, 866 posts, RR: 0
Reply 5, posted (7 years 6 months 5 days 3 hours ago) and read 8079 times:

Doesnt EADS sell Military harware to European govts aswell?? I would assume that its Efforts to sell military harware would not be loss making ones !!

User currently offlineIkramerica From United States of America, joined May 2005, 21416 posts, RR: 60
Reply 6, posted (7 years 6 months 5 days 3 hours ago) and read 8055 times:

Quoting Supa7E7 (Reply 4):
Perfectly legal. Is it a subsidy, no. Is it a big financial connection, yes.

Yes, but when companies are required to sell things to the government at a loss, that usually happens in despotic nations. Give us discounted stuff or we'll shut you down is not the "american way" though of course it happens on a smaller scale on the local and county level (some cities and counties).



Of all the things to worry about... the Wookie has no pants.
User currently offlineRichardPrice From , joined Dec 1969, posts, RR:
Reply 7, posted (7 years 6 months 5 days 1 hour ago) and read 7976 times:

There is a foreign sales tax credit Boeing gets as an aircraft manufacturer - the tax they pay on exports is reduced below that of the norm.

Boeing has also received fairly significant bonds and grants from foreign countries wanting 787 construction - Italy, Japan et al.

This topic cannot go anywhere good, its been done to death - literally. I hope it gets locked before it gets ugly.


User currently offlineScouseflyer From United Kingdom, joined Apr 2006, 3364 posts, RR: 9
Reply 8, posted (7 years 6 months 5 days 1 hour ago) and read 7971 times:

 talktothehand  Please don't start this again - it's an argument that neither side can win so it we should all just "agree to disagree"!

User currently offlineAutoThrust From Switzerland, joined Jun 2006, 1545 posts, RR: 9
Reply 9, posted (7 years 6 months 5 days ago) and read 7920 times:

Quote:
"It's ironic that Boeing CEO Harry Stonecipher wants to step up complaints about Airbus 'subsidies,' considering Boeing's 7E7 will have up to $6 billion of 'subsidies' from Japan, Italy and the United States (Washington State)," says Pritchard, who studies the globalization of the commercial aircraft industry.

"But there are two major differences between an Airbus A380 'subsidy' and Boeing 7E7 'subsidy,'" Pritchard points out.

The Airbus subsidy is in the form of repayable loans with interest for aircraft development, which is legal according to the World Trade Organization, Pritchard says. The Boeing subsidy, on the other hand, is for aircraft production, which is prohibited by the WTO and which never will be paid back, he says.

http://www.buffalo.edu/reporter/vol35/vol35n40/articles/Boeing.html


Amazing just amazing and some people dare to blame Airbus getting illegal subsidizes.  banghead   crazy 



“Faliure is not an option.”
User currently offlineSebolino From France, joined May 2001, 3675 posts, RR: 4
Reply 10, posted (7 years 6 months 5 days ago) and read 7902 times:

Quoting AutoThrust (Reply 9):
Amazing just amazing and some people dare to blame Airbus getting illegal subsidizes.

When it's an American company, it's different ! At least, it looks like.


User currently offlineCobra27 From Slovenia, joined May 2001, 1003 posts, RR: 0
Reply 11, posted (7 years 6 months 5 days ago) and read 7875 times:

Quoting Supa7E7 (Reply 4):
The US Government and Boeing have a deep financial relationship. Mostly, it goes like this: Boeing sells aircraft, spacecraft, missiles, logistics and service products. The US Government buys these products.

Well said. Boeing gets indirect government support in Integrated Defense business. Airbus gets direct subsidies to launch new aircraft, even though they have been in service for more than 30 years, they are just to weak to lauch something on their own


User currently offlineN1120A From United States of America, joined Dec 2003, 26196 posts, RR: 76
Reply 12, posted (7 years 6 months 5 days ago) and read 7868 times:

Quoting Ikramerica (Reply 6):
Give us discounted stuff or we'll shut you down is not the "american way" though of course it happens on a smaller scale on the local and county level (some cities and counties).

No, the "American way" is to over pay on no-bid contracts  sarcastic 



Mangeons les French fries, mais surtout pratiquons avec fierte le French kiss
User currently offlineBringiton From United States of America, joined Sep 2006, 866 posts, RR: 0
Reply 13, posted (7 years 6 months 5 days ago) and read 7864 times:

Quoting Cobra27 (Reply 11):
Well said. Boeing gets indirect government support in Integrated Defense business

How is it support ?? You can also claim that boeing gets indirect support from the airlines that it sells its aircrafts to aswell !! Boeing offers products to USAF.USA,USN and USMC in addition to NASA and other foreign militaries and gets a % of profit for its products . I am sure EADS does the same thing when UK , Germany , Spain , Austria , France etc buy their military hardware from it !! They are both selling a product to a customer with the EADS's military devision and the ID devision and that product has to compete with other manufacterers which in US are likes of Lockheed martin , Northrop Grumman , Bae , GD etc etc .


User currently offlineAutoThrust From Switzerland, joined Jun 2006, 1545 posts, RR: 9
Reply 14, posted (7 years 6 months 4 days 23 hours ago) and read 7854 times:

Quoting Cobra27 (Reply 11):
Airbus gets direct subsidies to launch new aircraft, even though they have been in service for more than 30 years, they are just to weak to lauch something on their own

Rubbish, first Airbus gets repayable LOANS with Interests and second with over 400 deliverys this year:

Quote:

But Airbus has repeatedly said its cash flow is strong enough to finance its own development costs, including those of the A350, a direct competitor of the 7E7

http://seattlepi.nwsource.com/business/207500_boeingeu12.html



“Faliure is not an option.”
User currently offlineSebolino From France, joined May 2001, 3675 posts, RR: 4
Reply 15, posted (7 years 6 months 4 days 23 hours ago) and read 7842 times:

Quoting Cobra27 (Reply 11):
Airbus gets direct subsidies to launch new aircraft, even though they have been in service for more than 30 years, they are just to weak to lauch something on their own

Ridiculous.
They have loans, not subsidies, and they use it because it is offered and allowed by treaty, and financially interesting for them, not because they are weak.


User currently offlineLeelaw From , joined Dec 1969, posts, RR:
Reply 16, posted (7 years 6 months 4 days 23 hours ago) and read 7837 times:

As I've said before, both of the OEMs sit in front of the governmental trough as much as possible in numerous ways, and neither comes to the "subsidies" debate with "clean hands." IMO, any attempt to sort out or adjudicate which OEM has cleaner hands with regard to governmental aid/subsidies is truly a fool's errand; the ultimate case of chasing one's own tail. In short, a real circle jerk.

User currently offlineCobra27 From Slovenia, joined May 2001, 1003 posts, RR: 0
Reply 17, posted (7 years 6 months 4 days 23 hours ago) and read 7799 times:

Quoting Sebolino (Reply 15):
Ridiculous.
They have loans, not subsidies, and they use it because it is offered and allowed by treaty, and financially interesting for them, not because they are weak

Wooow really, so they pick loans only because they can? They don't actually need them, it is just allowed? Man, I never thought it that way


User currently offlineSebolino From France, joined May 2001, 3675 posts, RR: 4
Reply 18, posted (7 years 6 months 4 days 23 hours ago) and read 7790 times:

Quoting Cobra27 (Reply 17):
Wooow really, so they pick loans only because they can?

Of course. It will probably change with the A380 problems though.

Quoting Cobra27 (Reply 17):
Man, I never thought it that way

It's because you are biased, don't worry.


User currently offlineAutoThrust From Switzerland, joined Jun 2006, 1545 posts, RR: 9
Reply 19, posted (7 years 6 months 4 days 22 hours ago) and read 7764 times:

Quoting Leelaw (Reply 16):
As I've said before, both of the OEMs sit in front of the governmental trough as much as possible in numerous ways, and neither comes to the "subsidies" debate with "clean hands." IMO, any attempt to sort out or adjudicate which OEM has cleaner hands with regard to governmental aid/subsidies is truly a fool's errand; the ultimate case of chasing one's own tail. In short, a real circle jerk.

How true, well said. Both manufacturers get their money somehow, the point is what the WTO will say to each case.

Quoting Sebolino (Reply 18):
Quoting Cobra27 (Reply 17):Man, I never thought it that way
It's because you are biased, don't worry.

 checkmark  Indeed.



“Faliure is not an option.”
User currently offlineKeesje From , joined Dec 1969, posts, RR:
Reply 20, posted (7 years 6 months 4 days 22 hours ago) and read 7760 times:

The US governement (Im-Ex Bank) financed 777 & 787 contracts to e.g. Air Canada, Air India and Emirates. They say that played a big role in getting the contracts.

IDS is a much bigger & more profitable business for Boeing then commercial aviation. The relations with Dod are very close. An ethics program was launched to set clear bounderies.

Also putting high pressure on states with government owned Airlines in China, Israel and Japan can be qualified as strong government support I guess.

"Subsidy" is a bad word in the US. Giving support, financing, creating / saving jobs, leveling the playing field, protecting US interest etc. however are generally accepted.


User currently offlineCobra27 From Slovenia, joined May 2001, 1003 posts, RR: 0
Reply 21, posted (7 years 6 months 4 days 22 hours ago) and read 7741 times:

Quoting Sebolino (Reply 18):
Of course. It will probably change with the A380 problems though.

So there would be A380 without government loans? And who would the bring the cash in


User currently offlineSebolino From France, joined May 2001, 3675 posts, RR: 4
Reply 22, posted (7 years 6 months 4 days 22 hours ago) and read 7714 times:

Quoting Cobra27 (Reply 21):
So there would be A380 without government loans?

I guess.

Quoting Cobra27 (Reply 21):
And who would the bring the cash in

Not me at least.
I would say, shareholders (EADS), banks, investors, partners, the equivalent of non-federal gvts, even foreign governments .... just like Boeing does.

You can't at the same time accusing Airbus of having undue state help because they are profitable, and saying that they can't do anything without this aid.


User currently offlineAirFrnt From United States of America, joined Jul 2004, 2822 posts, RR: 42
Reply 23, posted (7 years 6 months 4 days 18 hours ago) and read 7579 times:

Quoting RichardPrice (Reply 7):
There is a foreign sales tax credit Boeing gets as an aircraft manufacturer - the tax they pay on exports is reduced below that of the norm.

That tax credit hasn't been in place for a while.

Quoting RichardPrice (Reply 7):
Boeing has also received fairly significant bonds and grants from foreign countries wanting 787 construction - Italy, Japan et al.

No, the local contractors received them. The same contractors also receive bonds and grants to help out on Airbus projects.

Quoting Keesje (Reply 20):
The US governement (Im-Ex Bank) financed 777 & 787 contracts to e.g. Air Canada, Air India and Emirates. They say that played a big role in getting the contracts.

Ex-Im is simply a financal arm, and makes profit just like any other state bank (including the state banks in Germany that do the same for European products) do. It's not a subsidy in any way shape or form.


User currently offlineBaroque From Australia, joined Apr 2006, 15380 posts, RR: 59
Reply 24, posted (7 years 6 months 4 days 17 hours ago) and read 7529 times:

Quoting RichardPrice (Reply 7):
This topic cannot go anywhere good, its been done to death - literally. I hope it gets locked before it gets ugly.

I agree. For those who wish to gain information on the matters, try the
WTO website - add Aircraft subsidies, the papers set out both cases.
House of Commons - numerous documents try

House of commons, repayable launch investment. This gives a range to chose from. You can look at the debates on matters such as the grant to Bombardier for example.
A major report is at
http://www.publications.parliament.u...06/cmselect/cmtrdind/368/36803.htm

BAE annual reports, especially around 2001 and 2002.


25 Post contains links Keesje : The Export-Import Bank supports the financing of U.S. goods and services, maintaining, and creating more U.S. jobs... http://www.exim.gov/ Lets not s
26 Alessandro : Dare I add, El Al? Yes, I add El Al, Israeli airlines that have all Boeing fleet.
27 Post contains images Stitch : Quite simply, Slovacek747, the "real truth" of the matter is far more convoluted and subtle then the simple "sound bites" many inside and outside A.ne
28 TeamAmerica : A tax incentive is not a subsidy. When I take money from X to give to Y, I am subsidizing Y. A tax incentive is simply taking less money from Y. The
29 Bringiton : That was precicely the point I was making . All i was doing was laying out the facts on the table !! BTW the tax breaks are on products sold meaning
30 Post contains images Dougloid : Just what are you implying, sir? I mean, a man with a pair of huevos on him will say it out loud-so why are you dancing around the edges of what you
31 Post contains images SJCRRPAX : Absolutely. If you are European you will make up all kinds of wild stories to prove this, and if you are **American** you will deny this. Here is the
32 707lvr : It never ceases to amaze - the number of people who continue to believe that a reduction in the GROSS SALES TAX imposed by a LOCAL jurisdiction specif
33 Post contains images TeamAmerica : Ditto what Dougloid said above. This is an ugly thing to imply, and cowardice to not simply say what you mean.
34 StarGoldLHR : Blackberry ?
35 Post contains images Stitch : Actually, it applies to any aerospace company in WA state.
36 AirFRNT : I don't think there is a lot of people here who think that the word "Bank" is the same as the word "Subsidy". At least not outside of Airbus talking
37 SLCUT2777 : I'm sure if you did all the math of the DIRECT subsidies the governments of France, Germany and a number of other EU nations pay Airbus to keep peopl
38 ElmoTheHobo : The answer to your question is officially no for both, however both manufacturers, and if I may go out on a limb and say most aircraft manufacturers,
39 DfwRevolution : No, it can't. Boeing must demonstrate that research and techniques from government projects are not used in the design or development of commercial p
40 Post contains images Coelacanth : Hello from Coelacanth, I can sum things up for yah real quick . Boeing has grown up, is living on its owe , paying its bills and Airbus is still livin
41 TPASXM787 : So what if they do. In fact, so what if Airbus does? In A's case, if the gov't chooses to give them low interest loans repayable over many years, why
42 Jaxfll : Plus, let's not forget all the money that Boeing puts into proposals that never come to fruition. It's not like just because Boeing puts in a proposa
43 TPASXM787 : This is quite true, and Boeing just shelled out about $600mil last quarter in fines for doing just this, causing them to post a loss.
44 ElmoTheHobo : Yes, that is completely true, but technology, along with engineers and profits made the military division migrate to the commercial side. Boeing must
45 Alessandro : Doug, if read all the thread you´ll see what I said about Boeing and El Al. Sure I think the US government gives away money to Israel so they can buy
46 707lvr : I probably should have been more specific. The Washington State legislature made the following eligibility definitions for imposing the tax and theref
47 Baroque : Have you read the WTO documents? I suspect not. They will not give you the answer to your question but they will indicate the interpretations that ca
48 Cobra27 : They are a good government company, but they should provide they own money for developing planes, if they don't manage that, they should feel really
49 Post contains images Keesje : Just why do you have to touch this open nerve agian? Planned subsidies for Boeing’s 787 program from Washington State ($3.2 billion), Kansas ($0.5
50 Brendows : You just don't get it Keesje... It's called tax cuts, and every aeronautical business in Washington State could get it. Are you sure that Airbus/EADS
51 PolymerPlane : That's not the point. Those subsidy creates a market disadvatange for the competitor. It makes bigger incentive for Airbus to make money. A subsidy d
52 Aither : No one has mentioned the currency. A weak currency like the Yuan and the Dollar compared to the Euro is also a form of subsidy (it is hardly the macro
53 Danny : Another channel of subsidizing American companies is "help" for other countries. It works in a simple way: US Government offers gives money to another
54 Baroque : Two Nations divided by a common language (Wilde/Shaw). Subsidy (COED) 1. Parliamentary grant of money to the sovereign for State needs; tax levied on
55 PolymerPlane : It's a subsidy in form of lower interest loan, and takin away risk of investment. Since if ever Airbus goes bankrupt, those loan will never be repaid
56 Sebolino : 1) The problem is not who could get it, but who gets it 2) Your statement is wrong. The huge tax cuts accorded to Boeing were decided specifically fo
57 Cobra27 : Are you talking about invstment or subsisidies? Are really Airbus and Boeing unable to finance solely their new designs?
58 Baroque : WADR this is incorrect PP. As it is Bombardier attracts RLI. If you read the HoC document you will find political correctness is not a criterion, it
59 Post contains images Keesje : In the US thy just hate the word "subsidy". Try "Incentives", "Support", "Stimulating Innovation", "Compensation", "Tax Reduction", "Protecting Ameri
60 Post contains images TeamAmerica : Yeah, Keesje, it's all word games. Just taking the $3.2 billion from Washington State into consideration. 1) This is a total over 20 years. It keeps
61 Cobra27 : According to this topic, Boeing and Airbus don't actually have any control. Everything is in the hands of government?
62 Post contains links Baroque : PING http://www.globalization101.org/index.php?file=news1&id=27 " On May 30, 2005, the office of the United States Trade Representative (USTR) announc
63 Brendows : Look at it this way: every state, whether it's in Europe or in the US, will fight to keep important companies in their area, and tax cuts is a much u
64 ContnlEliteCMH : Of course the relations with DOD are close, just as they between DOD and Lockheed-Martin and all the other big-player DOD suppliers. There's a reason
65 AirFrnt : It's the EU that sets the fiscal goals for the value of the Euro. Take it up with them. It's a choice, just like the United State's strong dollar pol
66 Post contains links PolymerPlane : from the House of Commons document: All RLIs granted are for UK based company. Boeing is not UK based company. Bombardier gets the RLI from the purch
67 PolymerPlane : What are you talking about? Yuan is one thing, Dollar is another thing. Yuan is kept artificially low by the chinese government, while dollar is a fr
68 Stitch : As a resident of the State of Washington and as one who followed the entire thing (since I worked for Boeing at the time), while Boeing was the "name
69 F22KA : Boeing it is NOT subsidized by the american govt. To be subsidized means to pass the tax bucket arround and collect money in order to save incompetent
70 Baroque : IF B sets up shop under the RLI rules, they can take part. Symmetry is a great thing, not apparently well understood here. This is a full m3m* system
71 Grantcv : Airbus gets loans at a discounted interest rate. That is an advantage they have that Boeing does not. As a result, Airbus has to employ more worker th
72 BoomBoom : Unfortunately the House of Commons docs do not address the subsidies granted by France and Germany. I suspect that's where the real money is and wher
73 Katekebo : Of course Boeing is subsidized. The whole American economy is subsidized by the US government. How? Because you pay less taxes in US than what you pay
74 PolymerPlane : This is just saying that aerospace industry is a global collaboration, that invites foreign investment. I fail to see what is the relevence to our di
75 Post contains links Zeke : I dont know what all the fuss is about, people at Boeing and Airbus work hard to get the best deals from their respective governments. Well if thats y
76 Baroque : My French and German are not good enough to have trolled their sites, but Mandelson think that they are following the same rules as the UK are follow
77 Post contains images Stitch : As a number of members have made clear with their reference posts, the issue is not as simple as "Boeing gets subsidies" or "Airbus gets loans". Both
78 Baroque : Yep. That is certainly what it looks like. And who knows what the WTO will think!
79 Post contains images Stitch : Considering some of their past rulings, they'll probably throw out the whole lot on both sides as illegal. On the plus side, this would cut down on t
80 Post contains images Baroque : That is my uninformed guess too. Wouldn't that be loverly!
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