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Union Considering Complaint Against Airbus  
User currently offlineB757300 From United States of America, joined Dec 2000, 4114 posts, RR: 23
Posted (13 years 4 months 2 weeks 1 day 10 hours ago) and read 1862 times:

Boeing Engineers May Press Case With US on Airbus Subsidies


Seattle, Dec. 5 (Bloomberg) -- Frustrated by years of job cuts amid increased competition with Airbus Industrie, Boeing Co.'s engineers are taking matters into their own hands.

The U.S. planemaker's largest union of engineers said it's considering a complaint with the U.S. Department of Commerce and the U.S. International Trade Commission. The union claims Airbus gets unfair state subsidies and dumps products, or exports them at prices below those in its home markets.

The engineers in particular want to restrict the subsidies Airbus can get to develop its A3XX ``superjumbo'' jetliner, said Kristin Farr, the union's assistant general counsel. The 550-seat plane Airbus hopes to introduce in 2006 would be the first airliner larger than Boeing's 30-year-old 747, one of the company's most profitable products.

``We've got standing in this as a representative of the workers,'' Farr said. ``They've seen the attritions and layoffs because we've lost market share to Airbus.''

So far the union has done some initial legwork and met with Commerce officials about the types of forms it would need to file, she said. With one full-time lawyer and eight members of a legislative committee on the case, the union lacks the resources of Boeing or the U.S. government.

The engineers would prefer to team with other unions, Boeing and the government to press the claim, said Charles Bofferding, executive director of the union, the Society of Professional Engineering Employees in Aerospace. It represents 24,000 of Boeing's 197,900 workers.

``I would say we're in an exploratory stage rather than committed to taking specific action,'' Bofferding said.

Subsidized Competitor?

Boeing and Airbus, founded in 1970 as a partnership of four European planemakers, are the only two rivals in the $50 billion-a- year market for large jetliners.

Airbus has progressed from selling just one type of wide- bodied plane to a 39 percent share of world deliveries this year. Since mid-1998, meanwhile, Boeing has cut more than 40,000 jobs from a workforce that peaked at 238,600.

Boeing has long called on U.S. officials to challenge what it views as unfair aid to Airbus. It claims state subsidies violate a 1994 World Trade Organization agreement, and complains that Airbus hasn't given enough information about the terms of government loans for the A3XX.

``We have the same concerns'' as the engineers, said Tim Neale, a spokesman for Boeing.

Still, he said the company would prefer to see the case resolved by governments through the WTO rather than to take action based on U.S. law as the union proposes. Dumping cases are typically controversial and might end with the U.S. levying additional duties on imports.

``We're strong supporters of the WTO process and see that as the way to resolve these international trade disputes,'' Neale said. ``And the WTO does have a very specific agreement on subsidies -- it doesn't allow them.''

Pending Talks

The union said it might seek to file a case with the WTO later. Farr, the engineers' lawyer, said their main concern now is to raise the issue and gather evidence.

It isn't clear where the U.S. stands on pressing a case at the WTO. U.S. Trade Representative Charlene Barshefsky has repeatedly asked the European Union for more information on A3XX financing, but hasn't made a formal complaint to the WTO. U.S. and EU officials are due to discuss the matter again this month. Policy could change under a new U.S. administration.

Officials for the Commerce Department and the ITC, a semi- judicial independent agency, declined comment. Airbus spokesman David Velupillai also declined comment. The planemaker has long said the aid it gets is legal.

Dec/05/2000 12:40 ET

For more stories from Bloomberg News, click here.

(C) Copyright 2000 Bloomberg L.P.



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The information herein was obtained from sources which Bloomberg L.P. and its suppliers believe reliable, but they do not guarantee its accuracy. Neither the information, nor any opinion expressed, constitutes a solicitation of the purchase or sale of any securities or commodities.(C) Copyright 2000 Bloomberg L.P. BLOOMBERG, Bloomberg News, Bloomberg Financial Markets, Bloomberg Television, Bloomberg News Radio are trademarks, tradenames and service marks of Bloomberg L.P.


"There is no victory at bargain basement prices."
22 replies: All unread, jump to last
 
User currently offlineCarioca Canuck From , joined Dec 1969, posts, RR:
Reply 1, posted (13 years 4 months 2 weeks 1 day 8 hours ago) and read 1724 times:

Maybe the union can hire Al Gore's cadre of lawyers........they will be out of work soon.......and they are obviously good at whining.

User currently offlineWingman From St. Vincent and the Grenadines, joined May 1999, 2099 posts, RR: 5
Reply 2, posted (13 years 4 months 2 weeks 1 day 7 hours ago) and read 1711 times:

It's very hard to prove dumping charges and the state loans are based on the pre-WTO agreement between the EU and the US.

Dumping is a serious charge and that would be a legitimate complaint, but here's the reality. The orders for commercial jetliners has exploded since the formation of Airbus. Their timing was impeccable. Considering the production problems encountered by Boeing in 1998, at the peak of their employment numbers, I'm not sure Boeing could've handled this demand on its own. In fact, I would say its a damn good thing Airbus is here because otherwise, airlines would be waiting for years for delivery. The other obvious benefits of competition also apply. I think there is a certain number of aircraft any single company can make well in a single year. Beyond that number, the production logistics and supplier pressure are too much to cope with. For Boeing, that number might be around 500. Just my thoughts with little basis in fact.


User currently offlinePrebennorholm From Denmark, joined Mar 2000, 6289 posts, RR: 54
Reply 3, posted (13 years 4 months 2 weeks 1 day 7 hours ago) and read 1698 times:

Airbus is aiming at a 50% market share, Boeing at 100%.
So what's the problem? Why shout "wolf is coming"? Can't they just calm down and sell those 150% ?
 
Cheers, El Prebsi



Always keep your number of landings equal to your number of take-offs, Preben Norholm
User currently offlinePrebennorholm From Denmark, joined Mar 2000, 6289 posts, RR: 54
Reply 4, posted (13 years 4 months 2 weeks 1 day 6 hours ago) and read 1686 times:

By the way, how does this compare with another long story on another current thread with the headline "Boeing Sets Sales Record, Pressure On Airbus"? an article from Aviation Weekly and Space Technology.
Sales record, and laying off 40,000 workers!!! Well, that might fit if Boeing at the same time has been outsourcing major parts of the production to foreign subcontractors. What shall we believe?
Best regards, Preben Norholm



Always keep your number of landings equal to your number of take-offs, Preben Norholm
User currently offlineCPDC10-30 From United Kingdom, joined Feb 2000, 4773 posts, RR: 24
Reply 5, posted (13 years 4 months 2 weeks 1 day 5 hours ago) and read 1677 times:

Sour grapes if you ask me. If Airbus made cr*p airplanes as B757300 would have you believe, why would any airline buy them? If you complain that Airbus is offering too low a price, what about Ilyushin and Tupolev...their price is much lower than Airbus. Airlines always go for a mix of quality and price...never one or the other.

Boeing is currently outselling Airbus, so the timing of this announcement is a bit strange.


User currently offlineB757300 From United States of America, joined Dec 2000, 4114 posts, RR: 23
Reply 6, posted (13 years 4 months 2 weeks 1 day 5 hours ago) and read 1670 times:

Ok, when did I say Airbus makes crappy aircraft? I have never said that. In fact, on another thread, I said both companies made competent aircraft. The only problem I have with Airbus is how they handle their finances, i.e., govt. subsidies. You just proved the point I made on that same thread: Boeing fans get attacked every time they say anything remotely bad about Airbus. If you like Airbus, that's fine with me. I respect your opinions about Airbus even if I don't agree with them so give me the right to like Boeing!!!  


"There is no victory at bargain basement prices."
User currently offlineSccutler From United States of America, joined Jan 2000, 5392 posts, RR: 26
Reply 7, posted (13 years 4 months 2 weeks 1 day 4 hours ago) and read 1667 times:

would have to be McDonnell-Douglas.

If you look at the marketplace, a compelling proportion of what Airbus sells would have otherwise been MD territory.

Frankly, I think it is a sure thing that Airbus benefited from unfair subsidies... but a trade war won't bring back MD.

It still, ultimately, comes down to product.



...three miles from BRONS, clear for the ILS one five approach...
User currently offlineFly-By-Pilot From United States of America, joined Sep 2000, 209 posts, RR: 0
Reply 8, posted (13 years 4 months 2 weeks 1 day 4 hours ago) and read 1662 times:

I think the US Gov should fund Boeing instead. Then it would be fair. I dont think Boeing would give a damn if Airbus gave away 40 330/340's for free. Why would they, Boeing has complete dominance in this market. I think those 150 mill A3XX's scared Boeing a bit. If Airbus doesent have to play buy our rules then Boeing should play buy their rules. 100mill 777's, oh yeah that would undercut Airbus.

User currently offlineOH-LGA From Denmark, joined Oct 1999, 1436 posts, RR: 20
Reply 9, posted (13 years 4 months 2 weeks 1 day 3 hours ago) and read 1650 times:

Geez...

Either you guys don't read alot of messages on the forum or do you just keep saying to yourself it's a lie and not believe rock-solid proof? The key word with the financing that Airbus is receiving from the European governments is deemed "refundable launch aid", essentially the government gives Airbus a low-interest loan and Airbus then pays the governments back using revenues from aircraft sales.

A clipping of an Airbus FAQ:

BUT THE U.S. GOVERNMENT SAYS AIRBUS HAS RECEIVED $26 BILLION IN “SUBSIDIES”.

That number is wrong. It was calculated by a U.S. college professor for a study commissioned by the U.S. Department of Commerce in 1990. He used a variety of assumptions refuted by the fact that these so-called subsidies are in fact repayable by the Airbus partners to the European government. In reality, since 1992 the Airbus partners have refundedmore than they have borrowed – hardly the hallmark of a subsidized company.


Also, Airbus has a repayment schedule to the European governments, it expects the launch aid to be completely paid off by 2006. The repayments will run at about $1 billion a year from here to 2006.

So basically the Boeing people are whining even when they have no real hard solid evidence (from what I've read) so I think Al Gore's lawyers would work perfectly, make something out of speculation. Oh yes, the government hasn't given any money to the A3XX project yet, they are currently undergoing a "critical project appraisal" to determine the economic and financial returns on the project.

Right now I believe the current market share is something like 60% Boeing / 40% Airbus. Now that's not bad for Boeing, Airbus is trying to play catchup, and the A340-500/600 and A3XX are part of it's plans to do so. They are aiming for a 50/50 market, and that's not bad now is it?

Moi,
Kai



Head in the clouds... yet feet planted firmly on the ground.
User currently offlineLutfi From China, joined Sep 2000, 759 posts, RR: 0
Reply 10, posted (13 years 4 months 2 weeks 1 day 3 hours ago) and read 1641 times:

100 mil 777's?

Actually, for a big order, Boeing would price around 105m USD for a B777-200.



User currently offlineAmbasaid From , joined Dec 1969, posts, RR:
Reply 11, posted (13 years 4 months 2 weeks 1 day 2 hours ago) and read 1630 times:

I'm just amazed at how innocent you believe Boeing to be. Trust me, they are playing on the same pitch as Airbus.
We recently went to collect a number of aircraft, the concessions offered if we managed to sign the aircraft over before the end of the 3rd qtr of the year, came to $18 MILLION. Why was Boeing so eager for us to take delivery, well it meant that they had met delivery schedules and their stock prices stayed high...
The directors collected massive bonuses for this.



User currently offlineCPDC10-30 From United Kingdom, joined Feb 2000, 4773 posts, RR: 24
Reply 12, posted (13 years 4 months 2 weeks 1 day 2 hours ago) and read 1634 times:

What would you rather order, fleet of 777;s for $140-$192 million each (depending on model) or a bunch of A330's for free?

What I want to know is why do people with "Boeing" names start drooling over Airbus? Change your name to A3"somethingoranother" if you're an Airbus lover.

Actually, would it surprise anyone if Airbus was selling well below cost? No. Airbus has always been known to sell at a loss just to win orders.

I appologize, my remark was based on your previous postings above. They led me to believe that you didn't think much of airbus products. I'm not really an airbus fan, but I don't like them being bashed.


User currently offlineB757300 From United States of America, joined Dec 2000, 4114 posts, RR: 23
Reply 13, posted (13 years 4 months 2 weeks 1 day 1 hour ago) and read 1625 times:

I guess I need to put (joke) next to every comment I make.  


"There is no victory at bargain basement prices."
User currently offlineTullamarine From Australia, joined Aug 1999, 1427 posts, RR: 0
Reply 14, posted (13 years 4 months 2 weeks 1 day ago) and read 1621 times:

There is a political idiom that goes "Never start an inquiry unless you know all the answers already." This could be very apt in this situation.

Whilst there is no doubt that some of the subsidies, grants, loans etc received by Airbus probably push the rules a bit beyond their limits it is also probably true that there are some pretty ugly skeletons hiding in the Boeing closet. For instance, I would be very surprised if Boeing or the US government would be overjoyed if anyone started to pry into the reasons why El Al's order for A330s was abandoned.

It is a fact that both the US and EU actively support their industry in any way they legally can and often in ways they shouldn't. The activities of both these governments in the area of agricultural subsidies is clear proof of how much they are prepared to bend and ultimately ignore WTO rules.


User currently offlineUdo From , joined Dec 1969, posts, RR:
Reply 15, posted (13 years 4 months 2 weeks 1 day ago) and read 1619 times:

I would suggest that we the brave forum members start a "Save Boeing's Life Fund". We can collect money and give it to the poor guys in Seattle who are treated so unfair in that wide wide world...poor guys, sales records, an always confident CEO, the US government behind it with satellites (Saudia order...) and pressure on several countries (like Israel), the B737 as an unstoppable sales rocket, I can understand how bad they must feel...
You know what? The A3XX orders frighten them, now after they have to realize there is a market which they underestimated and for that reason didn't develop an appropriate competitor. Now they try to intervene with politics, I would do the same in that situation.

By the way, MDD kicked itself out of business after not being able to offer aircraft which the airlines wanted. The DC-10-and DC-9-based MD-11 and MD-90 weren't a good base to compete against brand new developments like A320 and A340.
Tell me one airline which has so far been really satiesfied with the MD-11 or MD-90...except FedEx...

Regards
Udo


User currently offlineFuture_Pilot From , joined Dec 1969, posts, RR:
Reply 16, posted (13 years 4 months 2 weeks 1 day ago) and read 1616 times:

OK, I didn't have the nerve to read the whole thing but from the first paragraph said I can safley say that aircraft makers from "the best nation in the world(USA, lol)", are loosing customars to Airbus and that boeing workers are simply afraid for their jobs, and are doing what americans do best-complain and sued.....how pathetic is that....ha ha.

User currently offlineA320FO From Austria, joined Oct 2000, 211 posts, RR: 1
Reply 17, posted (13 years 4 months 2 weeks 22 hours ago) and read 1604 times:

I don't want to get into this A versus B war flaming up again, but I can recall a not to long ago (~ 1 month) ruling from the WTO (World Trade Organisation).

This ruling allows the EU to charge high penalty taxes on certain US products, with Boeing belonging to the affected companies, due to "subsidizing" foreign sales politics of the US government. These companies set up trade corporations set somewhere on a tax oasis (I believe in the Carribean), virtually selling products free of all taxes.
But see another thread on the subsides topic.

Now, don't forget the current exchange rate of the euro versus dollar. AI sells its planes in $$, but pays for a large part of it's supplies and labor in euro! Taking an advantage out of this situation is everything else than illegal, it simply is the way global economics work....

Just my two cents worth....

A320FO


User currently offlineCV640 From United States of America, joined Aug 2000, 952 posts, RR: 5
Reply 18, posted (13 years 4 months 2 weeks 15 hours ago) and read 1568 times:

Both companies do compete very aggressively, and probably wouldn't turn down any assistance offered by their governments. I am sure that certain airline get killer deals when they buy aircraft from Airbus if they are a Boeing customer, or Airbus customers who buy Boeing planes. For example, I'm sure Qantas got a killer deal on the Airbuses, while Air France got the same on the 777s it bought. Each wants to establish a presence in the others territory.

This suit sounds tough to accept. Boeing is at max capacity right now, tough to develop new aircraft or devilver more right now, record back logs and large amounts of orders, more then Airbus this year, from what I have heard. SO tough for me to see why they are suing, can't really get much out of it. I think both sides should accept the fact that both companies are here to stay, it might wander back and fort but a 50-50 split is probably going ot be the norm, airlines like it, keep sthem honest and aggressive in developing aircraft for their needs. I think Boeing leads that area with the 767-400, 737-900, and 757-300, but both will do what is necessary.

All this aside I do have a prference for Boeing, but don't want to see Airbus go away at all, keeps Boeing moving ahead, plus I love the looks of some of the Airbus planes


User currently offlineRIX From United States of America, joined Aug 2000, 1785 posts, RR: 1
Reply 19, posted (13 years 4 months 2 weeks 14 hours ago) and read 1565 times:

"the best nation in the world(USA, lol)" is a crap that YOU posted here, no one else before you. Be less nervous and read the previous posts first.

User currently offlineWidebody From Ireland, joined Aug 2000, 1152 posts, RR: 8
Reply 20, posted (13 years 4 months 2 weeks 14 hours ago) and read 1554 times:

Fly-By-Pilot,

The EU is playing by your rules, and the U.S. government can provide low cost loans to Boeing, the same as the E.U. is doing for Airbus.

If they don't, then that's Boeing's problem, not Airbus'...


User currently offlinePrebennorholm From Denmark, joined Mar 2000, 6289 posts, RR: 54
Reply 21, posted (13 years 4 months 2 weeks 12 hours ago) and read 1543 times:

The Airbus company must be a pure magic company. From what we have "learned" here at airliners.net they:

1. Sell planes below cost
2. Give away some planes
3. Pay back loans according to schedule
4. Make EUR 550 mil. profit/year (1999).

Go and sell those Microsoft trash stocks and invest every cent you own in Airbus, the magic money generator. Better today than tomorrow. And don't let facts clutter reality. Just follow my advise and become a rich man.
Best regards, Preben Norholm



Always keep your number of landings equal to your number of take-offs, Preben Norholm
User currently offlineBrissie_lions From , joined Dec 1969, posts, RR:
Reply 22, posted (13 years 4 months 1 week 6 days 16 hours ago) and read 1525 times:

I really couldn't care less about what Boeing employees think of Airbus subsidies. Unless of course they are fully behind Australian farmers in their recent win over America at the WTO.....until then as far as I am concerned, Europe can keep subsidising Airbus until the cows come home (even though I know they are loans....not subsidies).

Cheers

Scotty

------

13:30 (AEDT) AUSTRALIA would seek the immediate removal of unfair barriers to lamb exports to the United States following a favourable World Trade Organisation ruling overnight, Trade Minister Mark Vaile said today.

Mr Vaile said a WTO panel on lamb meat found against US tariff measures placed on imports of Australian and New Zealand lamb.

"This is a great outcome for the Australian lamb industry and I appreciate its close involvement in the case," he said.

"The WTO panel has reaffirmed its interim findings that the tariffs imposed by the US on our lamb exports were unjustified and were inconsistent with WTO rules."

The restrictions put in place in July, 1999, included an initial tariff of nine per cent on an annual quota of 31,851 tonnes of Australian and New Zealand lamb.

Above-quota exports attracted a tariff of 40 per cent.

The tariffs were set for progressive reduction to 24 per cent for above-quota imports over the three years of the plan that aimed to increase returns for domestic sheep producers in the US.

But the WTO win means the restrictions will be removed.

"Once the WTO processes are complete we will seek the immediate removal of these unfair and unjustified import restrictions," Mr Vaile said.

The US could appeal against the ruling, but Mr Vaile vowed the Government would vigorously defend the finding.

If the US decided to continue with the tariff restrictions despite the WTO ruling, Australia could impose retaliatory measures against American imports to Australia.

------

15:50 (AEDT) A World Trade Organisation ruling against United States trade restrictions on Australian lamb was a victory for Australian farmers, Prime Minister John Howard said today.

"This is tremendous news for Australian exporters," Mr Howard told Parliament.

"For the first time in living memory to my understanding ... there appears to be a modicum of international trade justice for Australian farmers.

"For too long our farming producers have laboured under a world trading order which not only discriminated against primary producers to the benefit of those who depend more heavily on manufactured goods.

"But even among primary producers, the rules have been written to advantage the Americans and the Europeans to the detriment of Australians and New Zealanders. "What was done by the United States in relation to lamb was indefensible."

The WTO ruling will overturn restrictions put in place in July, 1999 which included an initial tariff of nine per cent on an annual quota of 31,851 tonnes of Australian and New Zealand lamb.

Above-quota exports attracted a tariff of 40 per cent.

The tariffs were set for progressive reduction to 24 per cent for above-quota imports over the three years of the plan that aimed to increase returns for domestic sheep producers in the US.

The US is expected to appeal the decision.


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