jacobin777
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Airbus Does (will) Get Subsidies!

Sun Dec 05, 2004 6:12 pm

well...this might put some questions to an end as to if Airbus gets or will get subsidies...

"Airbus chief executive Noel Forgeard has said he would seek reimbursable loans from the four Airbus partners -- Britain, France, Germany and Spain -- to finance a third of the development cost.
The German government, according to the Financial Times Deutschland, has allocated 650 million euros in its 2005 budget to finance a 17-year credit for Airbus."


its the the 2nd sentence which spells it out...........they can put any spin on to it, but the bottome line is.......Airbus=subsidies

http://www.ttc.org/200412050307.ib5372616319.htm

comments, opinions..
"Up the Irons!"
 
sabenapilot
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RE: Airbus Does (will) Get Subsidies!

Sun Dec 05, 2004 6:31 pm

.... reimbursable loans to finance a third of the development cost....

So in other words, 100% legal launch aid under the 1992 bilateral agreement.

I don't see your point, sorry... can we move on?
 
N79969
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RE: Airbus Does (will) Get Subsidies!

Sun Dec 05, 2004 6:53 pm

100% proof that Europe continues to act in bad faith. The preamble (non-binding) language of the 1992 agreement indicates that both signatories aimed to eliminate state support for airliner development. The US never exercised its right to give Boeing or MDD cash to develop airplanes because we assumed : a. It is not the government's role to fund such projects and b. Europe would end "launch aid" as Airbus matured.

Airbus has at least 50% of the market and is pushing for more. Yet Europe continues to treat Airbus as a nascent firm providing with capital at below market rates even as it's parent posts record profits.

Europeans continue to point to the binding terms of the 1992 agreement and ignore the intent. America's faith was apparently misplaced when we mistook Europe for an economic partner rather than a predator gunning to take away the U.S.'s largest single export market. I do not think we will make that mistake again.
 
A319114
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RE: Airbus Does (will) Get Subsidies!

Sun Dec 05, 2004 7:42 pm

There is a huge difference between subsidies and loans. Sure, it may be a form of aid but there's nothing wrong with giving loans to companies who a) generate thousands of jobs in your country and b) make profit. It's just a wise investment if you ask me.
Destruction leads to a very rough road but it also breeds creation
 
petertenthije
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RE: Airbus Does (will) Get Subsidies!

Sun Dec 05, 2004 7:43 pm

The US never exercised its right to give Boeing or MDD cash to develop airplanes

Then, should you not be complaining at the US government, rather than at the various European governments? The EU signed a treaty with the US that allows 30% launch aid. Europe sticks to that treaty, and does not break it. The US sticks to the same treaty, but chooses not to take the most out of it. So stop complaining here, and start complaining back home!

Besides, Boeing gets indirect subsidies through the military and NASA.


because we assumed

One of the laws of aviation goes that assumption is the mother of all cock-ups. That's why it starts with ass!
Attamottamotta!
 
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VirginFlyer
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RE: Airbus Does (will) Get Subsidies!

Sun Dec 05, 2004 8:11 pm

This topic is to be kept on track. Any worthless comments/flamebaits/namecalling/insults will be removed, and the users making them will be suspended. DO NOT turn this into an EU-vs-US flame war...

Please, for once, let's have an *intelligent* discussion about this issue - it can be done!

V/F
"So powerful is the light of unity that it can illuminate the whole earth." - Bahá'u'lláh
 
sabenapilot
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RE: Airbus Does (will) Get Subsidies!

Sun Dec 05, 2004 8:22 pm

The 1992 bilateral agreement is a well-balanced binding accord giving room for equal amounts of limited launch aid to aerospace companies from both sides, thus in effect leveling the playing field in this global competitive industry.

For the customers (i.e. the airlines), the 1992 bilateral in effect made sure the playing field was leveled to the higher standards if I may say so, because without doubt the agreement dramatically facilitates the development of revolutionary all-new designs.

Contrary to the EU, The US never exercised its right to give Boeing straight out cash to develop airplanes, but attacking Europe for strictly exercising its contractual right to do so is just ridiculous! You've agreed to it and you've signed it, remember?

In the US, the general feeling may be it is not up to the government to help fund large economic projects, but it should have come as no surprise to any of you most Europeans tend to think differently on this....

Knowing most -if not all- sectors of the European economy benefit to some degree from what some would call 'unfair subsidies', the general idea the launch aid for Airbus would simply end when Airbus matured, was naive to say the least, since government aid is an inherent part of the corrected free market mechanism we have as economic model in continental Europe.

The feeling Europe still sees and treats Airbus as a nascent firm and has to be convinced there is no more need for 'overprotecting' it is again very naive, since Europe very well knows Airbus has matured! The way in which European governments deal with Airbus is not that of (over)protective parents, but that of very supportive partners working together to generate as much employment as possible while at the same time making profit for the private shareholders.

In this economic process, Airbus is dealt with in exactly the same way as any other European multinational is dealt with by the governments so asking for the end to these government aids is asking to change the "socialist" or rather "social democratic" economic model we have in place in Europe, something Europeans are not ready to give up!



[Edited 2004-12-05 12:33:21]
 
N79969
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RE: Airbus Does (will) Get Subsidies!

Sun Dec 05, 2004 8:23 pm

I just lost some good material I had written but V/F is just doing his job. That's fine.

A319114,

What do you think about loans that don't necessarily have to be re-paid? Or are not available to other Europeans who also create employment and wealth? Why is the government acting like a bank for Airbus and not for other firms?

I am not complaining the outright cash Airbus received in the 1970s. In that context the subsidy argument is not so bad necessarily. But it is 2004, Airbus has 50+% of the market, EADS is making record profits but Airbus still asks for and receives capital at costs below market rates that does not have to be repaid necessarily. Like I said no one else gets that deal but Airbus.


Petertenthije,

See post 2 about why the US has not doled out cash. Do you realize that Airbus also benefits from EADS defense contracting and that Airbus has used U.S. funded NASA research? I think our complaints are headed in the right direction.
 
Beaucaire
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RE: Airbus Does (will) Get Subsidies!

Sun Dec 05, 2004 8:32 pm

The new Airbus A 380 will contain 40 % of goods ,materials and software that are produced in the USA. I know about Alenia ( Italy ) beeing a Boeing subcontractor in Europe but not their current involvment in any Boeing planes beeing manufactured.
Why all this hate when it come to discuss A&B ?
Both companies benefit from certain levels of financial support ( direct or indirect is not really important ) and both companies are vital for their respective counties level of engineering excellence.Can't we just stop it there ?
Please respect animals - don't eat them...
 
sabenapilot
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RE: Airbus Does (will) Get Subsidies!

Sun Dec 05, 2004 8:47 pm

Like I said no one else gets that deal but Airbus.

The remark no one else in the EU can get similar funding aid for R&D of new technologies is completely wrong. Airbus consumes not even 20% of the annual budget spent by the EU in the R&D field, so you can forget that claim... It is not because other beneficiaries are much less spectacular (e.g. a small firm in a Flemish town which just invented a new way to weave tissue and receives a 100,000 euro check to help build a small factory and employ 5 additional people) that the EU aid program for R&D is not available to them.



[Edited 2004-12-05 12:49:03]
 
Leskova
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RE: Airbus Does (will) Get Subsidies!

Sun Dec 05, 2004 8:50 pm

N79969, actually, it's not just Airbus receiving government money - one of the largest recipient of subsidies from Germany was, in recent years (not sure if it's still the case) DaimlerChrysler - and that was not for their aerospace division.

When I see the amounts that this country's government alone gives out to large corporations - some of which use every trick in the book to pay little or no taxes - it, quite frankly, makes me sick.

I'll reiterate that I'd prefer companies in general - not just aerospace - to compete on their own respective merits, not on government money: the problem is that most governments seem to be more willing to use subsidies (by whatever name) to address shortcomings in their own country's economic framework than to do what would make much more sense: address the shortcomings.

Why give companies lots of money so they can compete against foreign companies residing in countries where the taxes are more favorable? Why not think about adjusting your own taxes?

Personally, I think the fact that Boeing has recently expressed the willingness to resume talking with Airbus as a big step forward - saying that a WTO solution would, most likely, hurt both companies more than it would help... actually amazingly similar to what some of us (not "us" as in "Europeans", but "us" as in "a.net members") have been saying all along.

Solve this problem by talking, and solve it so both sides agree at the end: if there is something you want to be achieved by the agreement, then have it expressed in plain wording, not by implied intent.

Too many agreements have failed because both sides thought the agreement implied different goals - because both sides had failed to have the goals explicitly mentioned in the agreement.

Regards,
Frank

P.S.: N79969, sorry about the material that was lost - there were some quite good points in it... not that I'd necessarily agree with all of them, but they were good nonetheless...  Big grin
Smile - it confuses people!
 
N79969
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RE: Airbus Does (will) Get Subsidies!

Sun Dec 05, 2004 10:18 pm

Sabenapilot,

I am not sure if I know what to say...but you kind of made my case for me. Thanks...I guess.

Despite all of your discussion about "corrected" free market models, European socialist ways, and what not, most businesses in Europe do not live by these rules. If they are not well run or produce a bad product, they go bankrupt. Case in point Sabena which you ought to be familiar with and which had an unnaturally long life. Other examples are Fairchild Dornier and Fokker. I am sure there are many more. But some reason Airbus is exempted from these rules. These "European ways" are fine when you are talking about health insurance or education for your continent.

You also made my point for me that Airbus is private-public partnership to create profits and jobs. The key word is "jobs." Airbus does not actually create net jobs in airplane manufacturing. It simply moved them out of the United States. The EU is using its muscle to take wealth away from United States by targeting a private firm. If it sounds outrageous that because it is an outrageous scheme. The EU is basically engaged in a form of economic warfare against the United States.

You also said more than once that the U.S. was naive. I agree with you 100%. In hindsight it is so clear. We imprudently expected that Europe would act in good faith. That is to say that when Airbus reached a level of self-sufficiency, that financial supports would be eliminated. Because of the trust we placed in Europe, we apparently saw no need to make binding terms to that effect as we trusted the EU to do the right thing. Silly us.

When Europe callously disregards the intent of the 1992 agreement and betrays our trust and then points only to the binding terms, it reinforces our deepest suspicions about European (particularly French) intentions to screw the U.S. whenever possible. This predates the days of GWB by many years.

The pattern is clearly there. The most recent and outrageous example is when Mario Monti actually complained to the Japanese PM when ANA (a private firm) purchased B737NG to replace A320. Mr. Monti felt that Europe should get half of Japan's market as a matter of almost birthright. When SAA decided to replace brand new B738 with A320s, I don't think our government reacted at all.

Now Airbus wants to supply half of the USAF's tankers. Somehow the EU and Airbus keep forgetting to set aside 50% for Boeing when it sells to Air Berlin or CSA. Perhaps you can remind them.

 
Aither
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RE: Airbus Does (will) Get Subsidies!

Sun Dec 05, 2004 10:24 pm

I like when some say "an infant industry" in 1992...

Airbus was 20 years old and was assembling the A300, the A310, the A320 and the A330 and A340 were almost ready to take off. They already had some massive orders from the largest airliners in the world.

And then Boeing would have said : "it"s ok to have an unfair agreement, you know it's a small company, it deserves some help, we are nice people you know".

Come on, be serious, the deal was not and is not that unfair.

Like i already, the biggest subsidy Airbus has ever received is when Boeing & MDD have merged making Airbus the only real competitor. Having similar products, they finally got 50% of the market...
Never trust the obvious
 
N79969
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RE: Airbus Does (will) Get Subsidies!

Sun Dec 05, 2004 10:43 pm

Leskova,

No big deal. They got sent to my email with the deletion notice so I can copy and paste if I want to re-post.

Does Daimler-Chrysler get loans that do not have to be repaid if whatever project is not profitable?

I would also like to add that many people (not you necessarily) like to say that Boeing Corporation receives military contracts and therefore Boeing Commercial Airplane Group is "subsidized." The truth is that Boeing is one of the smaller defense contractors. Well behind Lockheed, Northrop Grumman, and General Dynamics. It was even smaller before 1997 when it purchased MDD.

EADS also receives defense contracts. Big defense contracts. Airbus is part of EADS and benefits from the trickle down from being in a big and apparently very profitable family. In addition it gets capital at below commercial rates to develop specific airplanes despite having over 50% of the market. According to the Economist a while ago, one of the Airbus partner countries picked up the bill to develop Glare for the A380. That is in addition to the "repayable loans."

Airbus used U.S. taxpayer-funded NASA research for its supercritical wing on the A310. The FBW system incorporated into all Airbus airplanes was originally developed also by NASA in the early 1970s. The 5000-psi hydraulic system that will be used in the A380 was developed by the US DoD and paid for by people like me. If I took the time, I am sure I could find more examples.

I am incredulous when I hear European complaints that it is unfair for Boeing to use NASA research as if it were some unfair subsidy. I am not sure if Boeing is allowed access to European aerospace research or if it is reserved for members-only in the government-business partnership for European jobs and profits.
 
PVG
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RE: Airbus Does (will) Get Subsidies!

Sun Dec 05, 2004 11:00 pm

I don't understand why Airbus is so happy with themselves? Firstly, it's obvious from everything that you read in the press that they have bought their market share gains. Second, Boeing's best customers in the U.S. are in bad shape financially and haven't been able to order anything for a long time, yet Boeing is still maintaining a 45-50% market share!

I like the Airbus planes as a consumer, but why are they blowing their horn?
 
Aither
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RE: Airbus Does (will) Get Subsidies!

Sun Dec 05, 2004 11:02 pm

« Case in point Sabena which you ought to be familiar with and which had an unnaturally long life. Other examples are Fairchild Dornier and Fokker. I am sure there are many more. But some reason Airbus is exempted from these rules.” These "European ways"…

Can someone reminds me what’s chapter 11 ? Embarrassment

“Airbus does not actually create net jobs in airplane manufacturing. It simply moved them out of the United States. The EU is using its muscle to take wealth away from United States by targeting a private firm.”

Are you saying there is a European “conspiracy” ?  Acting devilish

I thought it was just competition.  Insane
And by the way, until 2001, Boeing has never produced so much commercial aircraft per year, even if Airbus was gaining momentum. Better blame the market and Boeing sales forces who relied too much on the US and Japanese markets.


“You also said more than once that the U.S. was naive. I agree with you 100%.”

So if Boeing was naïve  Innocent , they made a mistake and finally, they are just paying the price now…


“it reinforces our deepest suspicions about European (particularly French) intentions to screw the U.S. whenever possible.”

You really can’t stand that a 60m country sometimes says “no” to you, can you ?. This US parano scares me, god knows where it will lead us all…  Sad


“The most recent and outrageous example is when Mario Monti actually complained to the Japanese PM when ANA (a private firm) purchased B737NG to replace A320. Mr. Monti felt that Europe should get half of Japan's market as a matter of almost birthright. When SAA decided to replace brand new B738 with A320s, I don't think our government reacted at all.”

How can you compare Air Berlin or SAA to the second largest air market in the world ? Monti was not complaining about ANA but about the fact the japanese market is completely locked to Airbus by Boeing. Monti expressed doubts this lock is based on fair practices.


“Now Airbus wants to supply half of the USAF's tankers. Somehow the EU and Airbus keep forgetting to set aside 50% for Boeing when it sells to Air Berlin or CSA. Perhaps you can remind them.”

Nonsense. By the way, Europeans buy a lot of US military products while the US military market is closed to us, thus benefiting a lot to companies like Boeing.

Cordially  Smile/happy/getting dizzy
Never trust the obvious
 
A319114
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RE: Airbus Does (will) Get Subsidies!

Sun Dec 05, 2004 11:05 pm

A319114,

What do you think about loans that don't necessarily have to be re-paid? Or are not available to other Europeans who also create employment and wealth? Why is the government acting like a bank for Airbus and not for other firms?


Like Leskova said, governments invest in other big companies, too. And even if they didn't, it's their own good right to invest in any company they like if goverments think it's a wise investment. The past has shown that investing in Airbus really is a good decision and I would be very comfortable with my tax money invested in such strong companies.
Also, your comment about US-funded designs being used in Airbus aircraft isn't very strong. Actually, it's also the other way around, like you even said yourself: Glare, developed by Europeans will be used in Boeing aircraft, too.

Destruction leads to a very rough road but it also breeds creation
 
N79969
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RE: Airbus Does (will) Get Subsidies!

Sun Dec 05, 2004 11:15 pm

Aither,

Go read what EADS just said Friday about the USAF tankers. The US military and Coast Guard operates several European aircraft types and European products are in the running to supply the President's helicopter. The idea that the US market is closed to European goods is simply a myth.

ANA bought A320/321 and was not happy for some reason and decided to replace them. Airbus sold plenty of A300s in Japan. Monti's complaint was outrageous. Why should Airbus be considered to replaced A320/321?

While you are looking up the story on EADS and the tankers, I suggest also looking up the EU's efforts to create a Chapter 11 like law. In the context you use chapter 11 as a counterpoint, it makes no sense.

Boeing was not naive but complacent. The US government was the naive party. Our mistake was trusting the EU. I am not sure if that is something that you should be gloating about as a European.
 
vfw614
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RE: Airbus Does (will) Get Subsidies!

Sun Dec 05, 2004 11:27 pm

I think I read somewhere that there will be a major reshuffle of Boeing's senior salespeople in the coming weeks. Boeing obviously has finally come to the conclusion that their problems do not arise from alleged subsidies, but might have to do with some much simpler aspects of business life.

Finally, why did the US agree to the 1992 deal ? Surely not because they had a generous day, but because they had something hidden in their closets as well. It is give and take. You need to see the whole picture when you talk about subsidies: Direct subsidies, indirect subsidies, loans, tax reductions, grossly overpaid military equipment (including the lack of a free tendering process...), state-funded research (like national aerospace agencies), political pressure in sales negotiations etc. etc.

I suspect the next thing is that the US demands from Brazil that the EMBRAER employees are paid US wages because otherwise EMBRAER has an unfair advantage over all other aircraft-producing nations....
 
strudders
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RE: Airbus Does (will) Get Subsidies!

Sun Dec 05, 2004 11:28 pm

This seems always a them and us situation. Of course Airbus get indirect funding from EU member countries, job protection, etc. Boeing and the rest get the same spins in defense and space contracts in the US (and the allowance to prop up airlines with chapter 11). And please do not say that is a level playing field.

However for the day I have been looking at posts in the forum, it always appears that it is a US v EU battle for who has the better product and is playing the game fair. May I point out that neither company is really playing the game well, as I see it, the Airlines are the winners.

IMHO Airbus has a good, cheap (there's the killer) short haul, Low cost airline loving product. There are the added advantages of parts and training and the whole load of other issues that come with the ease of making the same tube longer, with a few more windows etc. However this does not mean that they have taken advantage it is simple luck, if boeings products where of that generation then we would be talking about something else.

Boeing will pick up The pace and fall into line. However it must be said there is NO way any shape or form that Boeing would be allowed to fail in the US. The defense of the country relies on them.

So my point is lets stop all these inane US V EU battles as my Mum would say to me and my brother. " yours as bad as each other" Then clip us round the ear.

Struds


 
sabenapilot
Posts: 2442
Joined: Sat Feb 26, 2000 6:18 pm

RE: Airbus Does (will) Get Subsidies!

Sun Dec 05, 2004 11:33 pm

N79969,

I have re-read your latest post on more than one account, because it contains so many obvious thoughts and remarks which you seem to discover only right now, I simply could not believe the amplitude of your naivety so far.
Congratulations of finally having opened your eyes to reality.

However, your latest post still seems to contain some wrong thoughts too.

For instance: I am sure you did not want to say Airbus is a badly run company, producing a bad product, saved from bankruptcy thanks to repeated launch aids for the continuous stream of new products, because it would make you look very biased and would result in yet another disillusion on your account when you'd finally discover for yourself Airbus is a very well run company, building first class products which deserves every portion of the huge market share they have come to conquer.

Also, when you say a socialized free market model like we have in Europe is fine for our health insurance or education system, but should not be applied in our civil aviation industry, I wonder on what basis you decide what sectors of our economy are eligible for socialisation and what sectors should be exempted for your pleasure? If you support the idea 'this is America, and this is how we do things', then you must also be ready for a similar 'this is Europe, and we do things differently'.

Contrary to what you suggest, Airbus is not exempted from the normal methods of doing business in Europe. There is a genuine difference between keeping ill-fated companies like Fokker, Alitalia and many others alive (BTW, isn't it the US which is keeping many of its airlines -United for instance- alive whereas the EU did not intervene when some of her carriers went under?) and actively working together in a win-win situation with successful and profitable businesses like EADS to help them grow ever further.

I am pleased to see you have finally come to discover Airbus is a private-public partnership to create both profits and jobs. A brief look at the shareholders of EADS (Airbus parent company) could lead to no other conclusion: part of EADS is free floating (private shareholders), part of it is government owned (public property). Since both sides have different goals, it is clear EADS (and thus Airbus) itself must make sure to satisfy the needs of ALL of its shareholders in exactly the same way as every company should do.
When looking at their latest results, it can be said they are doing a SUPERB job.

You say the Europeans do not actually create new jobs but rather move them out of the United States by using their muscle and money and that the EU is basically engaged in a form of economic warfare against the United States. Congratulations: you have just discovered what GLOBALIZATION and WORLDWIDE COMPETITION can mean when you are on the other side of the barrier!

One third of launch aid is what is allowed under the 1992 bilateral agreement, so 1 third of launch aid is what Airbus will get for their A350, like it or not.
I'd say enough about this, can we close this topic?
 
N79969
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RE: Airbus Does (will) Get Subsidies!

Sun Dec 05, 2004 11:34 pm

A319114,

I understand what you are saying. But the EU is taking jobs and money from the United States and Europe expects the United States simply accept it as "wise government" policy.

First of all the government is the goverment. Why is it a financier or investor normally. If Airbus projects were as economically wonderful as Foeregard and Leahy make them out to be, every investment bank, pension fund, private equity firm, and the rest would be tripping over themselves to put their name on it.

That professional investors and capital markets are unwilling to supply money at rates at which wants to pay is a telling sign.

I understand that you are comfortable with the way the EU has spent on your money on Airbus. That's nice.

What would you do the U.S. did the same thing to Europe? What if we decide that we preferred that the pre-1992 situation better when the U.S. had about 70-80% of the market and that the government decided to hand Boeing the cash on favorable terms to develop a family of airplanes to achieve that goal.

The indignant cries of victimhood from Europe would be simply deafening compared to the still-feeble noise coming out of country today about this issue. The EU would draw every sword available to them to allow them keep what they have essentialy seized from the U.S. in terms of an economic base.

"Glare, developed by Europeans will be used in Boeing aircraft, too."

The 7E7 won't have any Glare. It will be made mostly of carbon fiber from Toray Industries. Are you simply guessing or imagining this?
 
Leskova
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RE: Airbus Does (will) Get Subsidies!

Sun Dec 05, 2004 11:37 pm

N79969, DaimlerChrysler doesn't get loans - they get (or got) pure subsidies: money that did and does not have to be repaid.

While I was digging around the German government's website, I came accross a document called "Subventionsbericht 2001" (report on subsidies for the year of 2001), as well as a release about the publishing of the same report in 2003 - and in both, I found a paragraph that probably explains a bit of the discussion going back and forth between the US and Europe, because it gives a definition of what is considered a subsidy:

Begriffsklärung Subvention

Der Begriff "Subventionen" steht für zwei verschiedene Dinge: Bei Finanzhilfen handelt es sich um Geldleistungen des Bundes an Stellen außerhalb der Bundesverwaltung für begrenzte Zwecke, so zum Beispiel die Finanzhilfen des Bundes für den Bergbau, Hilfen für das Wohnungswesen und für die Landwirtschaft oder die Gemeinschaftsaufgabe regionale Wirtschaftsförderung für neue und alte Bundesländer. Steuervergünstigungen sind spezielle steuerliche Ausnahmeregelungen, so zum Beispiel die Ausnahmeregelungen bei der ökologischen Steuerreform und die Entwicklung der Steuermindereinnahmen aus der Eigenheimzulage, die für den Bund zu Mindereinnahmen führen.


Unfortunately, I was not able to locate the same document in English, so I'll try out a translation here:

Explanation of the Term Subsidy

The term "Subsidy" represents two different things: in the case of financial aid, it represents monies provided by the Federal Government for specific needs, for example Federal aid for the mining industry, as well as the housing industry, agriculture or the Unionwide program of regional economic development aid for the old and new German states. Tax credits are special tax exemptions, for example exemptions introduced by the Ecological Tax Reform as well as the development of reduced Federal Tax-income caused by the Home-Owners-Tax-Credit.


This goes back to one of the previous discussions, the one where some were arguing that tax-credits weren't subsidies - while, as this paragraph shows, they are considered a subsidy in Europe.

By the way - the full document, unfortunately only in German, can be found here: http://www.bundesregierung.de/dokumente/-,413.533883/Artikel/dokument.htm.

So I guess that before any real agreement can be reached, a solution to this dilemma will have to be found - because it will be quite difficult to reach a solution without both sides agreeing on the most basic principles.

Then there's also the organisational difference between Europe and the US: the US is a country, while the EU is an organisation - although there are some quite obvious similarities: the US has a federal government that has a say in some matters, but not in all matters - the states, for example, are free to offer tax credits to companies residing withing their borders, without the Federal Government being able to block this (I hope I remember this correctly).

The EU equivalent to the US' Federal Government, for this purpose, is the EU Commission, the equivalent to the state's governments would, in this case, be the governments of the member countries of the EU - the member countries can (and do) also offer incentives to companies residing within their borders. While this is often done by states within the countries, these aid packages are almost never handled by the state alone, but practically always involve, here in Germany at least, the Federal Government: case in point, the Volkswagen-Legislation in Lower Saxony - the EU commission did not sue Lower Saxony, but Germany.

The main problem arising from these organisational differences is that, even if - for example - Hamburg gave Airbus a large tax credit, they could still be prevented from doing so by the EU, while Washington giving Boeing a tax-credit for keeping the B7e7 production in-state is, by quite a large number of peope, seen as something completely removed from any discussion about subsidies.

And this difference in the approach toward an agreement will probably be another one of the big problems: on, geographically speaking, our side, you've got the EU commission speaking for not just the member countries but also the states that these member countries are made up of, while on the US side, you've got the Federal Government speaking for itself, while later on being able to turn around and say "Well, that money isn't coming from us, that's the state giving money - and we cannot influence that".


As for European research not available to non-European companies - while I'm not sure about it, I do somehow doubt that institutes such as DLR and Max-Planck-Institut would not provide Boeing with their research if they asked for it... but, as I've mentioned, I'm not really sure about that part.

Ok - sorry that this post turned out to be a bit on the long side...

Regards,
Frank

Smile - it confuses people!
 
dynkrisolo
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RE: Airbus Does (will) Get Subsidies!

Sun Dec 05, 2004 11:44 pm


I like when some say "an infant industry" in 1992...

Airbus was 20 years old


It's not how old they were and how many products they had. Prior to 92, they had less than 20% of the market. Also, it was an agreement between the US and EC, not Boeing and Airbus.

Many people want to equate the repayble loans to indirect subsidies that Boeing has. The same people refuse to acknowledge that EADS and BAE SYSTEMS have more revenue from their governments than Boeing has. The US has a large budget for aerospace R&D, but it doesn't mean Boeing is getting all of it, and not all of what Boeing gets benefits their commercial programs. In fact, the EU has recently sponsored R&D for the A380. In the US, I can't think of any government sponsored R&D directly applied to a commercial product in recent history. Sponsoring long-term, high-risk R&D is the government's job, but sponsoring R&D for a commercial product is corporate welfare.

The repayable loans sound innocent, but is it really? Here's the agreement:

http://www.aviationnow.com/avnow/news/channel_awst_story.jsp?id=news/090604gatt.xml

Article 4.2(a) says 25% of the development cost can be loaned at the same cost the government borrows.

Article 4.2(b) says another 8% of the development cost can be loaned at 1% above the cost the government borrows.

Article 4.3(a) says Airbus will only need to pay back 20% of the loan for the first 40% of the forecast deliveries.

Article 4.3(b) says Airbus will only need to pay back 70% of the loan for 85% of the forecast deliveries.

First, government rate is not market rate. Second, by inflating forecast, it will further reduce the upfront cost.
 
N79969
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RE: Airbus Does (will) Get Subsidies!

Mon Dec 06, 2004 12:04 am

Sabenapilot,

Your latest post affirms my earlier view from days past that you epitomize the worst of effete, condescending European arrogance. In the European view, it seems that to place trust in Europe is naive. That seems to be a consistent theme throughout your remarks in this thread. I tend to trust people to keep their word and if that makes me naive in your eyes, so be it. That is absolutely fine with me-- almost a badge of honor.

Luckily for Europe though, I think the majority of Europeans are decent, honest individuals who can be taken at their word and will not abuse a friend's (ally's) trust.

Let's talk about economics for a moment. If Europe decides to subsidize a non-traded good such as health insurance or educations for its citizens, that has no effect on the United States. It is none of our concern.

However when the EU decides to subsidized traded-goods such as airliners, that transfers wealth away from the United States. That is our concern. Europe has made this issue our business. Like I posted in my response to A319114, I guarantee EU would not tolerate it if the US were to simply emulate the EU "partnership" model.

You contradict yourself. Since you used the terms "globalization" and "competition", I would assume that you actually understood what they meant. "Globalization" refers to the declining relevance of borders in the areas of finance, information, and product flow. "Competition" means competing on merits at market conditions. In contrast, the EU-Airbus "Repayable loan" scheme and "government-business partnerships" are anachronims of a bygone era. Globalization and competition are not bywords for when one government engages in economic warfare on an ally.


By the way, have you ever wondered how Europe can afford expansive health insurance and educational systems and Airbus all at once?
 
A319114
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RE: Airbus Does (will) Get Subsidies!

Mon Dec 06, 2004 12:45 am

Come on, let's stay on aviation with this topic, there's no need to discuss about health or educational systems on this site.
You want to talk about economic warfare? What about Bush's huge import taxes on steel, trying to save American jobs (luckily, a thing of the past right now). What is happening with Airbus and Boeing is purely competition and both companies have government back up, which makes sense. Just because Airbus tends to sell better is no reason to act like a bad loser. I mean, comments like 'The EU would draw every sword available to them to allow them keep what they have essentialy seized from the U.S. in terms of an economic base.' and 'it reinforces our deepest suspicions about European (particularly French) intentions to screw the U.S. whenever possible' are totally ridicilous and show a lack of knowledge about international economy.
Destruction leads to a very rough road but it also breeds creation
 
N79969
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RE: Airbus Does (will) Get Subsidies!

Mon Dec 06, 2004 1:15 am

A319114,

I will be glad to stick with the issue of aviation subsidies. But that naturally leads to other areas of discussion which ought not to be necessarily stifled.

Let me add to your list: tariffs of Canadian timber, ban on importation of beef, and protection of textiles. I agree with you. These are bad ideas and harmful to our neighbors. But they are par for the course in international trade as you well know. I am not talking about tariffs and these issues are aviation. This thread is about outright cash for Airbus.

What is happening and what has occured is not purely the result of competition. If Airbus lived or died purely by competition, would the company have generated enough cash off of the A300/310 to finance the rest of their airplanes? Despite all the assertions, Boeing has not enjoyed the same government backing as Airbus. There is nothing approaching parity. That is the larger theme in this thread.

You accuse me of ignorance of the international econonmy because of what I said of Europe's probable response would be if the US were to adopt an EU-like position. I am not sure of which bit of factual data that you think I am unaware of. It is certainly not ridiculous just because you do not like my metaphors. Not sugar coating remarks does not count as ignorance.
Look at the historical facts. For instance, the US actually caught an Airbus exec trying to bribe Saudi Airlines to choose Airbus over Boeing in 1991. (Check out what bribes did for your taxes in France in 1991) Please enlighten on what I am missing about the international economy.

Anyway just read Sabenapilot's posts to see what I am getting at. I think some of his views are not atypical.


Leskova,

Thanks for the information. Your characterization of Federal-State relations is accurate. Why is the EU challenging Hamburg's grant of a tax credit to Airbus? Why hassle Airbus or Hamburg? Is this just another way for them to define the scope of their authority?

What project did the EU fund for Daimler?




 
bjg231
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RE: Airbus Does (will) Get Subsidies!

Mon Dec 06, 2004 1:28 am

"isn't it the US which is keeping many of its airlines -United for instance- alive whereas the EU did not intervene when some of her carriers went under?"


Yes, but there's a BIG difference between offering bankruptcy protection for carriers adjusting to a post 9/11 market and providing loans to a PROFITABLE and MARKET LEADING organization.
If at first you don't succeed, then skydiving is not for you.
 
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N328KF
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RE: Airbus Does (will) Get Subsidies!

Mon Dec 06, 2004 1:41 am

Sabenapilot:

If you don't have to pay the loans back if the project fails, then that is unfair.
When they call the roll in the Senate, the Senators do not know whether to answer 'Present' or 'Not guilty.' -Theodore Roosevelt
 
greaser
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RE: Airbus Does (will) Get Subsidies!

Mon Dec 06, 2004 1:45 am

(BTW, isn't it the US which is keeping many of its airlines -United for instance- alive whereas the EU did not intervene when some of her carriers went under?)

Like Alitalia and Volare?

Nonsense. By the way, Europeans buy a lot of US military products while the US military market is closed to us, thus benefiting a lot to companies like Boeing.
True, but not enitrely when talking about about the main EU nations. You know as well as I France has adopted the 'no foreign' buying policy more aggresively than the US has.'
The statement the US military market is closed to EADS is wow wrong. Really really wrong. I mean so wrong if you'd watch Baywatch you'd see many AS565s flying around rescuing Pamela Anderson. We have the T-45 Goshawk, from BAE. We have the famous Harriers. We have the Beretta M-9 as the pistol of choice for the Army, the Navy's caterer comes from a french company, Our Army Howitzers are joint projects with UK companies. Our Special forces use H&K weapons.
Now you're really flying
 
anxebla
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RE: Airbus Does (will) Get Subsidies!

Mon Dec 06, 2004 1:48 am

Sometimes I think a.net is not a very good web-site for allowing threads like this.
This topic is stupid, and the VirginFlyer's answer (reply nº 5) is a real disappointment... Why This thread has not been closed or deleted??
I've no more to say.
AIRBUS 320 The world's most advanced single-aisle aircraft
 
Leskova
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RE: Airbus Does (will) Get Subsidies!

Mon Dec 06, 2004 1:50 am

N79969, I guess that the hangover that I'm still feeling from that party on Friday is keeping me from expressing my thoughts as clearly as I want to express them...  Big grin

The EU is currently not blocking or rejecting any tax credits by Hamburg to Airbus - but it could be interesting to see what, if anything, happens regarding Hamburg currently buying land for the expansion of Airbus' plant im Finkenwerder...

What they are doing is challenging the Volkswagen Laws, because they violate the equality principle by not allowing every European, regardless of nationality, to buy as many shares in Volkswagen as they would like, and in recent months (or, by now, years - I think this was in 2002 or 2003) they have recalled some subsidies given to VW for new plants they built in Saxonia - because the subsidies were for building a new plant, not refurbishing an old plant: actually, the only thing that remained of the old plant was the walls, everything else was new, so it is, and was, quite a bit up for discussion if recalling these subsidies was justified. If I recall correctly, the larger part of the amount VW got was recalled.

As for DaimlerChrysler - or still Daimler Benz back then - I'm actually not really sure what they got the subsidies for, but the subsidies were given not by the EU, but by Germany (which, admittedly, means that they were cleared by the EU) - I'll see if I can find some documents regarding the amounts they got and for what...


And, please, people - let's not bring that Chapter 11 arguement back into this discussion: it is a different matter - while Chapter 11 makes avoiding a shutdown easier than most European bankrupcy laws do, Chapter 11 is by no means a walk in the park. If going into Chapter 11 meant that the US Federal Government automatically assumed some, or all, of the debt the filing company has, then, yes, it would be a subsidy.

As it is, Chapter 11 only provides the company with some breathing space, something that can be the deciding factor between liquidation and continued operation: they still have to deal with their creditors, who do have a say in the whole process.

To sum it up: Chapter 11 is not a subsidy.

Regards,
Frank
Smile - it confuses people!
 
sabenapilot
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RE: Airbus Does (will) Get Subsidies!

Mon Dec 06, 2004 1:54 am

N79969,

So as long as it doesn't affect the US, we in Europe can do as we like, but as soon as it starts to irritate your government, we should all stand to attention, obey to their instructions and give up whatever is favourable to our people because of the sake of your American interests?

Talking about anachronisms of a bygone era!!!

BTW, thank you for being so concerned about the funding of that 'oldfashioned' and 'socialist' economic model we have overhere.
Life is all about making choices, so you have to set your priorities you know.
Political parties in Europe tend to go for jobs and building out a welfare state, whereas priorities in the US seem to be strengthening the military and cutting taxes. Both are more or less nobel goals, yet they each have their consequences you have to live with.

Now, I am sure you didn't want to say we are overspending, because that would even be more foolish than your first insinuation airbus is close to bankruptcy without government aid, as European government deficits are consistently much lower than those in the US, sometimes they are even inexisting.

In all, the fact Europe can maintain a very good health insurance and educational system and co-fund Airbus all at once, is prove maybe all these things are not as expensive as you are made to believe and that even this 'massive subsidy issue' is not as important as you believe.

 
PVG
Posts: 463
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RE: Airbus Does (will) Get Subsidies!

Mon Dec 06, 2004 2:11 am

What about France bailing out Alstom? And Germany blocking takeovers of it's banks by foreign banks. Or, Germany trying to block vodafone from buying Mannesman? Why is Swiss Air still around? What about how the European governments more or less assumed all debt obligations of the formerly state owned airlines (LH, BA, AF) when they "privatized" 20 years ago and they were able to start as public companies with beautifully clean balance sheets? While I agree that Chap. 11 is an abused part of the law, I do not remember the US gov't ever directly bailing out a company except for Chrysler which turned out to be a very profitable investment for the US Government.

I could really care less about the semantics, but Europe and Airbus have bought their market share and they continue to sell too cheap. I mean, how could it possibly be that Airbus's costs are so much lower than Boeings' that they can consistently under-cut them on price? How can that be? Airbus operates in a high cost environment. They buy their parts from the same suppliers more or less. And, the Euro has increased in value vs. the USD by almost 65% in the past 20 months. How is it possible that they can afford to sell their planes for less than Boeing and maintain profitability? Has anyone ever really dug into their financial reports? Is there anything funny in there? I think that there may be just as good a case for anti-dumping as there is for WTO violations. I cannot believe that their costs are that much lower than Boeings'. It's just not possible. If anyone has good inside knowledge, then I would appreciate an explanation.
 
Aither
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RE: Airbus Does (will) Get Subsidies!

Mon Dec 06, 2004 2:16 am

"I like when some say "an infant industry" in 1992...

Airbus was 20 years old


It's not how old they were and how many products they had. Prior to 92, they had less than 20% of the market. Also, it was an agreement between the US and EC, not Boeing and Airbus."


20% of the market but they were 3 or 4 large competitors in 1992. And Airbus was already producing their today's aircraft family type. Since these products are similar to the Boeing ones and they became only 2 major players, it's no surprise they have 50/50 Market share.
Keep in mind the Airbus market share surged just after the Boeing MDD merger. It's not a coincidence.




I'm concerned about this whole issue as i'm sure the Bush/stonecipher duo will do everything to accuse Airbus of the worst things, allowing them to take truly unfair, unilateral actions. IMO they're just preparing the grounds, Airbus should be very worry and check they don't have some weapons of mass destruction somewhere in their plants  Laugh out loud

[Edited 2004-12-05 18:20:01]
Never trust the obvious
 
Aither
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RE: Airbus Does (will) Get Subsidies!

Mon Dec 06, 2004 2:33 am

PVG,

Don't believe the US are anything differents : it just takes different forms but the results are the sames. The political pressures, lobbying etc on domestic and foreign contracts are huge. The ties between politics and business are the sames.The thing about the tanker is one example but not an isolated case (E.g. Rumsfeld and the oil company, etc.)

About the way Airbus is cheaper, i would recommend to read another recent thread where it has been discussed.
About the Euro/US exchange rates, Airbus, as any large interntational company, is covered on the currency markets (edging).


If both company go to the WTO, they will be both condemned, it won't be good for jobs, airlines and passengers. However i see this battle a relatively good news for the future new entrants (chinese, russians, eventually indians). We should be more concerned by these guys.
Never trust the obvious
 
atmx2000
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RE: Airbus Does (will) Get Subsidies!

Mon Dec 06, 2004 3:27 am

This seems always a them and us situation. Of course Airbus get indirect funding from EU member countries, job protection, etc. Boeing and the rest get the same spins in defense and space contracts in the US (and the allowance to prop up airlines with chapter 11). And please do not say that is a level playing field.

Exactly how does airlines entering chapter 11 benefit Boeing only? Did you notice that the two US airlines currently in chapter 11 have signficant numbers of Airbus aircraft, and that one of those airlines (USAir) is moving towards an all Airbus mainline fleet. If anything, Airbus is gaining an advantage from chapter 11, because the sickest airline is an Airbus operator and the overcapacity is hurting more loyal Boeing customers not in chapter 11 than airlines with significant Airbus fleets not in chapter 11.

I think people are being idiotic when they suggest that Boeing defense and space contracts, many of which have nothing to do with aviation, are a form of subsidy. The US government is buying a product from Boeing, and while the profits from these products are relatively consistent, the margins aren't as large as for commercial aircraft. Also Boeing has to invest to be able to win such contracts, so the profits can't be used to subsidize other operations necessarily, without its shareholders becoming upset. That is not to say that Boeing has not benefited from contracts that did involve aviation technologies. But let us not forget that Boeing had a relatively small defense business through the latter part of the cold war, and it was only the post cold war era consolidation of defense companies that led to Boeing becoming a bigger defense contractor.

Also do not forget that Europe benefited greatly from cold war era US defense spending. The US was spending more than 1% of its GDP on NATO and forces deployed in Europe. US defense technologies, created by investments by US taxpayers, enabled European countries that didn't have the ability to create huge defense industries and the tax base and employment to sustain them, to defend themselves. Often the US gave offset deals that made purchasing defense products from abroad more palatable and transferred technology which spurred industry in Europe. Europe saved quite a bit of money because of US defense spending and was able to use that money for subsidizing commercial sectors as well as their welfare states. The simple fact of the matter is that US defense spending was a huge transfer of wealth to Europe. The US accepted it because it felt that a secure Europe with a strong economy was in the best interest after being dragged into two world wars in Europe, despite the fact that it meant greater competition for American companies and a bigger burden on US taxpayers.

The loans for commercial product development should stop. These are market distorting. If Boeing were to receive the same type of loans under the same terms where loans for unsuccessful programs don't have to paid back, we would see a spate of unsuccessful programs or programs with low ROIs because both companies would feel the need to respond to any competitive threat as soon as possible and request state funded loans as we see with the A350. We would likely see a continuous stream of aid for new derivatives and performance improvement programs that would result in programs never becoming profitable enough to pay off existing loans and fund future development programs.
ConcordeBoy is a twin supremacist!! He supports quadicide!!
 
Boeing Nut
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RE: Airbus Does (will) Get Subsidies!

Mon Dec 06, 2004 3:32 am

I think people are being idiotic when they suggest that Boeing defense and space contracts, many of which have nothing to do with aviation, are a form of subsidy. The US government is buying a product from Boeing, and while the profits from these products are relatively consistent, the margins aren't as large as for commercial aircraft.

And they aren't handouts either. These government contracts are won by bid. They aren't the only ones after the contracts. So, if Boeing doesn't win it, they really feel it financially.
I'm not a real aeronautical engineer, I just play one on Airliners.net.
 
planemaker
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RE: Airbus Does (will) Get Subsidies!

Mon Dec 06, 2004 3:34 am

"Airbus does not actually create net jobs in airplane manufacturing. It simply moved them out of the United States."

Please, please, do not give Airbus so much credit!!  Laugh out loud Boeing has been doing a very good job of exporting jobs without any help from Airbus. With each new aircraft model Boeing has been increasingly off-shoring Boeing jobs, now culminating with most of the 7E7's fuselage and all of the wing!!!

Do not delude yourself, Boeing doesn't care a bit about American jobs - they only care about their shareholders!
Nationalism is an infantile disease. It is the measles of mankind. - A. Einstein
 
FinnWings
Posts: 633
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RE: Airbus Does (will) Get Subsidies!

Mon Dec 06, 2004 3:48 am

how could it possibly be that Airbus's costs are so much lower than Boeings' that they can consistently under-cut them on price? How can that be? Airbus operates in a high cost environment

The answer is very simple: EFFICIENCY. The situation is very similar than in mobile phone market. A good example is Nokia... they are Finnish company and market leader in mobile business. Even Finland has one of the highest taxes in the world and workforce is very expensive still Nokia can sell their phones for a lower price and higher profit than their competitors in many cheap workforce countries...

It is all about the efficiency of the company... It seems that Airbus has done their homework very well during the past years and it is very streamlined company even there is so many countries involved in the production.

Best Regards,
FinnWings
 
Aither
Posts: 1000
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RE: Airbus Does (will) Get Subsidies!

Mon Dec 06, 2004 4:04 am

"The loans for commercial product development should stop. These are market distorting."

Oh well...  Insane like Airbus said in recent statement : " "tired, old, baseless accusation."

But i understand our fellow american when you can read in their press such bull...t article such as this one http://msnbc.msn.com/id/6652659/site/newsweek/
Never trust the obvious
 
trent900
Posts: 499
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RE: Airbus Does (will) Get Subsidies!

Mon Dec 06, 2004 4:18 am

Every large manufacturing company nowadays has to have some type of monetary loan etc to launch a large project. Airbus does it and so does Boeing. The American goverment could help Boeing a great deal more but they're obviously not interested (as a few posts above have mentioned about american jobs). If its all equal I dont see a problem.

Trent.
 
AirbusDriver
Posts: 228
Joined: Mon Feb 05, 2001 8:01 am

RE: Airbus Does (will) Get Subsidies!

Mon Dec 06, 2004 4:21 am

I don't know what the big deal is there is an agreement in place.

-Nobody stop us from doing the same.
-We can't expect everybody in the world to do it like we do it, should Canadian not get Gov healthcare because we don't.
Having flown both Airbus and Boeing, both make good airplanes, Boeing problem is that for they are way too conservative with there products.
Having flown both 737-300/400 ( some late 80 model ) when the A320 was available and now flying the Airbus the difference is day and night, can you blame any airlines for having bought the A vs the B???
-Another example, I jumseated recently on AA, on a new 737-800 and was very surprise to see that the all overhead panel, Center panel, Levers, Lights are the same as the old 737, now whose fault is that...
 
Planesmart
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RE: Airbus Does (will) Get Subsidies!

Mon Dec 06, 2004 4:34 am

Greaser
The statement the US military market is closed to EADS is wow wrong. Really really wrong. I mean so wrong if you'd watch Baywatch you'd see many AS565s flying around rescuing Pamela Anderson. We have the T-45 Goshawk, from BAE. We have the famous Harriers. We have the Beretta M-9 as the pistol of choice for the Army, the Navy's caterer comes from a french company, Our Army Howitzers are joint projects with UK companies. Our Special forces use H&K weapons.

The T-45 unit price, after deducting US-req'd mods was still nearly a 1/3 higher than if the complete aircraft had been built in the UK. Argument used to build in the USA was 'strategic importance'. But really, just another way of creating/maintaining jobs. Was this a SUBSIDY?
 
M27
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RE: Airbus Does (will) Get Subsidies!

Mon Dec 06, 2004 4:34 am

Another example, I jumseated recently on AA, on a new 737-800 and was very surprise to see that the all overhead panel, Center panel, Levers, Lights are the same as the old 737, now whose fault is that...

If it were on an Airbus, wouldn't you call it commonality, and thus it would be good? How come its bad on a Boeing?


 
AirbusDriver
Posts: 228
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RE: Airbus Does (will) Get Subsidies!

Mon Dec 06, 2004 4:45 am

I was just pointing out that some parts of the cockpit of the 737NG could have use newer technologies that Boeing has available. I think Boeing need to have more commonality between it's planes, but based on B777 technologies not 737-200.
 
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scbriml
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RE: Airbus Does (will) Get Subsidies!

Mon Dec 06, 2004 5:39 am

I understand what you are saying. But the EU is taking jobs and money from the United States and Europe expects the United States simply accept it as "wise government" policy.

US companies are exporting jobs faster than any influence that EU companies might have. How many 'US jobs' will be exported to build the 7E7?
Time flies like an arrow. Fruit flies like a banana!
There are 10 types of people in the World - those that understand binary and those that don't.
 
sabenapilot
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RE: Airbus Does (will) Get Subsidies!

Mon Dec 06, 2004 5:56 am

Ironically, it might even take more US workers to build a single A350, than it might take to assemble a B7E7, so if US jobs are your major concern, you better start praying we in Europe want to keep 'wasting' taxpayers money on projects that help create so many jobs in the US too instead of hoping for the A350 never to materialize...




[Edited 2004-12-05 21:57:02]
 
whitehatter
Posts: 5180
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RE: Airbus Does (will) Get Subsidies!

Mon Dec 06, 2004 6:06 am

The WTO will have a field day with this.

The US complaining side will have to show just how they are disadvantaged by the deal. Which means opening up the Boeing books, and their notoriously bloated management costs, to scrutiny. Just how much does having a fully expensed Vice President for everything from buying toilet paper to choosing office furniture cost? How much has the strange move to Chicago impacted on costs? Is this then inevitably passed on to the buyers?

Boeing has the same rights under the treaty. Why hasn't it ever tried to exercise those rights? If it's a case of the US Government not wanting to assist, then the defence "my daddy won't give me pocket money so you shouldn't get any either" isn't going to wash. That would be a direct imposition which would only be for the benefit of a specific company and not a true trade issue.

As for Government sourced capital, again convenient facts are being left out. Such as how Governments borrow. They don't send people round the banks signing loan agreements! It is done by issue of Government securities which pay out WELL ABOVE PRIME BANK RATES otherwise they would not attract investors.

European interest base rates are also higher than US ones. Another factor.

The Airbus tiering of repayments is also not as scandalous as the talking heads would have us believe. They are tiered to the success of the project, but at no stage can anyone say that the remainder of the debt gets abrogated if the project fails. That just is not true, and the repayments can always be reclaimed at a later date from other projects.

A little less screaming from the US posters here is in order. Trying to hide Boeing and the US's case weaknesses behind a veil of indignant rhetoric is not going to stand up for long, as that veil is getting pretty thin. There may be a case for renegotiating the treaty, but the American screeching is only going to ensure their case is examined even closer as independent minds do not like being bullied or told what to believe.
Lead me not into temptation, I can find my own way there...
 
jamesjoyce
Posts: 72
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RE: Airbus Does (will) Get Subsidies!

Mon Dec 06, 2004 6:12 am

Ladies, Gents, pleeezzz.

Please realise that the US are a single country and the EU is a union of 25 with a kind of centralised government but still 25 individual governments anyway. In 1992 they found this modus vivendi they both can live with. So can we continue on another topic now?

You cannot compare both economic systems and wheigh the pros and cons. But what you all should realise is that because of Airbus Boeing/MDD are making better airplanes and vice-versa.

Whenever flying either of these 2 products I feel safe and know they are the end results of 2 fine manufacturers.

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Military Aircraft Every type from fighters to helicopters from air forces around the globe

Classic Airliners Props and jets from the good old days

Flight Decks Views from inside the cockpit

Aircraft Cabins Passenger cabin shots showing seat arrangements as well as cargo aircraft interior

Cargo Aircraft Pictures of great freighter aircraft

Government Aircraft Aircraft flying government officials

Helicopters Our large helicopter section. Both military and civil versions

Blimps / Airships Everything from the Goodyear blimp to the Zeppelin

Night Photos Beautiful shots taken while the sun is below the horizon

Accidents Accident, incident and crash related photos

Air to Air Photos taken by airborne photographers of airborne aircraft

Special Paint Schemes Aircraft painted in beautiful and original liveries

Airport Overviews Airport overviews from the air or ground

Tails and Winglets Tail and Winglet closeups with beautiful airline logos