IMO Boeing is over it's neck in subsidies & they love it.
Fragment from report below:
The $4.2 billion launch cost is based on two factors: first is from Boeing statements that the 777 launch costs were between $6-7 billion, though Boeing has never officially disclosed the actual costs but did say the company called the 777 program at the time "the world's most expensive privately
funded commercial venture” (Branegan, 1995).
The second factor is based on statements from Boeing board members in 2003
that has targeted the Boeing contribution to the 7e7 program at no more than 60% of the 777 program (Pae, 2003). Thus, $7 billion times the 60% contribution limit gives us an estimated $4.2 billion Boeing contribution to the 7e7 program. The Boeing self-financed portion of $4.2 billion is less than the comparable $5.2 billion that EADS and BAE Systems self financed for the A380 program (EADS, 2003). We can expect new production subsidies to evolve as the program moves forward with first tier risk sharing partners developing second tier subcontractors.
DISCUSSION & CONCLUSION
The Airbus versus Boeing subsidy debate has been raging for more than three decades (for a concise overview, see Esty and Ghemawat, 2002). A new debate would likely differ from earlier disagreements in at least three respects.
First, the 7e7 launch plan includes both foreign and domestic subsidies.
Second, close to 50% of the launch funding is slated to come from sources that are classified as ‘actionable’ or ‘prohibited’ under the WTO’s subsidy rules.
Third, substantial state-level subsidies are part of the launch plan (e.g., $3.2 billion from the state of Washington).
Taken together, these three elements of the launch process add up to a public/private partnership of massive scale. From a public policy perspective, one has to question whether this represents good value for money.
Given that most of the value-added on the 7e7 will be earned by foreign partners rather than by Boeing or by US-based suppliers, US institutions might better serve the national interest by subsidizing those aspects of Boeing’s aerospace business that operate with higher US content.
Alternatively, subsidies might be allocated to Boeing for key parts of the airframe (e.g., wings), so that the US could at least maintain its core competence in airframe design and production. While Boeing is a global company, which means that production must also be global, the devolution of critical tasks to foreign suppliers ultimately raises strategic questions regarding the long-run viability of US commercial aircraft production in the LCA category.
Japan is also now deciding on a loan scheme for KHI, MHI and Fuji Heavy Industris to cover their share of development costs for the 7E7 airframe. METI, starting with the fiscal 2004 budget, gave Japan’s 35% share in the airframe national project status. But the allocation of loans has been held back by delays in the manufacturers, represented by the Japan Aircraft Development Corporation (JADC), completing a master executive contract with Boeing. Sources say the contract, which JADC originally aimed to complete by mid-2004, should now be completed by year-end.