wingnut767
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Airbus Refuses To Rule Out State Loans On A350

Tue Dec 05, 2006 6:07 am

Airbus refuses to rule out state loans on A350 XWB
Airbus CEO calls Boeing's 787 a "heavily subsidized" airplane

http://www.marketwatch.com/news/stor...96B%7D&siteid=mktw&dist=TNMostRead

How can Gallois throw out such a statement about Boeing to the press? Why did he not give out any specifics ?
 confused 
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osiris30
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RE: Airbus Refuses To Rule Out State Loans On A350

Tue Dec 05, 2006 6:10 am

Here we go with the Airbus BS press statements... all this means as far as I can tell is nothing has changed at Airbus.. This attitude is indicative of the culture that created the 380 problem. This just proves it's still around (not really surprising). I'll go on record right now that the 350 is either a) very late to market of b) significantly under the performance promises from today's press conference.
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airfrnt
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RE: Airbus Refuses To Rule Out State Loans On A350

Tue Dec 05, 2006 6:11 am

Quoting Wingnut767 (Thread starter):

How can Gallois throw out such a statement about Boeing to the press? Why did he not give out any specifics ?

In the media, perception is reality. In the WTO on the other hand.....
 
Poitin
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RE: Airbus Refuses To Rule Out State Loans On A350

Tue Dec 05, 2006 6:19 am

Quoting Osiris30 (Reply 1):
Here we go with the Airbus BS press statements... all this means as far as I can tell is nothing has changed at Airbus.. This attitude is indicative of the culture that created the 380 problem. This just proves it's still around (not really surprising). I'll go on record right now that the 350 is either a) very late to market of b) significantly under the performance promises from today's press conference.

Unfortunately, true. They have learned nothing. Unfortunately for Airbus, the airlines have. There is a old saying:

    "First time shame on you, second time shame on me."


I can just see the guarentees that Airbus will have to make to get in the door, and the size of the liquidated damages they will have to agree too.
Now so, have ye time fer a pint?
 
keesje
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RE: Airbus Refuses To Rule Out State Loans On A350

Tue Dec 05, 2006 6:42 am

"We are all aware in our hearts that the 787 is based on highly subsidized spending. There is government funding on both sides of the Atlantic. We are discussing with governments future R&D funding, but other options are on the table," Airbus President and Chief Executive Louis Gallois said.

"We have no imminent (cash) needs. We are only asking for a level playing field. No decision has been taken or is imminent."

"We are not in a defensive attitude. We are clearly in an offensive attitude on the heavily subsidized 787," Gallois said.

Airbus says Boeing benefits from over $3 billion in tax breaks from Washington state and fat defense contracts from the U.S. government which reduce its costs on civil aircraft development. Boeing denies receiving any government assistance.
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astuteman
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RE: Airbus Refuses To Rule Out State Loans On A350

Tue Dec 05, 2006 7:04 am

Quoting AirFRNT (Reply 2):
In the media, perception is reality. In the WTO on the other hand.....

.....things might not be much different.

I'm nervous of people hanging their hats on some earth-shattering WTO ruling. FWIW, I don't think we're going to get one.

(But then I don't think the issue is anything like as clear-cut as some do, for a number of reasons )

Regards
 
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N328KF
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RE: Airbus Refuses To Rule Out State Loans On A350

Tue Dec 05, 2006 7:04 am

Quoting Keesje (Reply 4):
"We are all aware in our hearts that the 787 is based on highly subsidized spending. There is government funding on both sides of the Atlantic. We are discussing with governments future R&D funding, but other options are on the table," Airbus President and Chief Executive Louis Gallois said.

This comes from the master of taking money from the doles of the French taxpayer. Look at his work at EADS, Aerospatiale-Matra, SNCF, and Lagardere.

[Edited 2006-12-04 23:05:25]
When they call the roll in the Senate, the Senators do not know whether to answer 'Present' or 'Not guilty.' -Theodore Roosevelt
 
Asturias
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RE: Airbus Refuses To Rule Out State Loans On A350

Tue Dec 05, 2006 7:06 am

Quoting AirFRNT (Reply 2):
In the media, perception is reality. In the WTO on the other hand.....

As far as I can tell, the WTO is the UN of business. Good luck on that.

cheers

Asturias
Tonight we fly
 
wingnut767
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RE: Airbus Refuses To Rule Out State Loans On A350

Tue Dec 05, 2006 8:44 am

Quoting Keesje (Reply 4):
Airbus says Boeing benefits from over $3 billion in tax breaks from Washington state and fat defense contracts from the U.S. government which reduce its costs on civil aircraft development. Boeing denies receiving any government assistance.

I still not or never will understand the argument that Defense contracts underwrite the Civil side. Boeing competes on the open market for contracts and because they make a superior product they win contracts. They make a fighter, Airlifter, Missile and are payed for the product. They make a profit on that product and you call it a goverment subsidy. Year to date Boeing Commercial Aircraft has made the same amount of money as the Integrated Defense Systems side. And the operating margin is higher for BCA. So if they are receiving "fat contract" should not the IDS side be outperforming the BCA side? and should they not have an outrageous profit margin on the IDS side?? Boeing Capital Corp made a record profit last Quarter. Did the Goverment have a hand in this?

http://www.boeing.com/news/releases/2006/q4/061025a_nr.html


And when it comes to tax breaks every business in this country gets some kind of tax break to attract companies and factories to the area. So by your thinking every company in America is subsidized by the Goverment. The argument that Boeing is subsidized is getting very old Especially coming from a Company whi has a large portion of its shares owned by Goverments.
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pygmalion
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RE: Airbus Refuses To Rule Out State Loans On A350

Tue Dec 05, 2006 8:53 am

Quoting Keesje (Reply 4):
Airbus says Boeing benefits from over $3 billion in tax breaks from Washington state and fat defense contracts from the U.S. government which reduce its costs on civil aircraft development. Boeing denies receiving any government assistance.

Boeing has yet to collect any money from the tax breaks given by the state of Washington. They kick in at the delivery of the airplane. So if Boeing has to give back the tax break... it wont change anything until first delivery in 2008.

Fat defense contracts??? You mean like the A400M development and production contract that Airbus is using to correct their software integration issues with??? That kind of fat defense contract?
 
gbfra
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RE: Airbus Refuses To Rule Out State Loans On A350

Tue Dec 05, 2006 8:58 am

Reply 8 Wingnut 767

You don't understand this point because you do not see that there are important industrial spillovers from military R&D to the Civil side. Besides the American aircraft industry benefits significantly from NASA R&D.

I'm highly astonished that our American friends don't want to see this although it is very well documented. Have you ever checked the NASA report where they were proudly referring to their work which benefitted GE greatly to come up with the engine that allowed Boeing to build the B777 with only two engines?

I have another NASA example at hand. It's about the propfan:

"NASA's propfan concept of the mid 1970s envisioned use of a large external fan‹in effect a reincarnation of the propeller‹to move great amounts of air and thereby effect a dramatic increase in the bypass ratio...

...In a cooperative General Electric/ NASA program, the UDF was extensively ground tested in 1985-86 and it demonstrated a fuel consumption rate 20 percent better than modern turbofans. Then General Electric teamed with Boeing Commercial Airplane Company to test the UDF in flight aboard a modified Boeing 727 jetliner. Flight tests began in August 1986 and continued into 1987. General Electric also built a second demonstrator engine for 1987 flight tests on a McDonnell Dougias MD-80 twinjet. The company's schedule calls for engine certification by the end of 1990 and availability for service in 1991-92.

A new propfan program, a direct offshoot of NASA propfan technology, was launched in 1986 when Allison Gas Turbine Division and Pratt & Whitney Division of United Technologies began a joint venture to pursue commercial, and possibly military, applications of the propfan. The development team includes, in addition to Allison, two other members of the NASA PTA industry group: Hamilton Standard (propfan) and Rohr Industries (nacelle). "

http://vesuvius.jsc.nasa.gov/er/seh/profan.html

This is just one example from the past. There a many more.

[Edited 2006-12-05 00:59:49]
The fundamental things apply as time goes by
 
pygmalion
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RE: Airbus Refuses To Rule Out State Loans On A350

Tue Dec 05, 2006 9:03 am

NASA R&D data is available to any who ask for it.... including Airbus. So beyond the benefit you get from standing there and joining in the party... all the NASA technology is available to any and all.
 
wingnut767
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RE: Airbus Refuses To Rule Out State Loans On A350

Tue Dec 05, 2006 9:06 am

And that is the job of NASA. To help advance Aviation. To compare that to Government ownership and Government loans is ridiculous.
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gbfra
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RE: Airbus Refuses To Rule Out State Loans On A350

Tue Dec 05, 2006 9:12 am

Ah, yes, to help Aviation. In a purely philosophical sense? Or just to support PHD programs at universities?

If you think the the financial consequences of joint programs with the American industry are ridiculous too, well, then you can't be helped.
The fundamental things apply as time goes by
 
pygmalion
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RE: Airbus Refuses To Rule Out State Loans On A350

Tue Dec 05, 2006 9:15 am

Maybe Airbus should have read this one???

Advanced Technology Composite Fuselage
 
wingnut767
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RE: Airbus Refuses To Rule Out State Loans On A350

Tue Dec 05, 2006 9:17 am

Quoting Gbfra (Reply 13):
If you think the the financial consequences of joint programs with the American industry are ridiculous too, well, then you can't be helped



Quoting Gbfra (Reply 10):
You don't understand this point because you do not see that there are important industrial spillovers from military R&D to the Civil side.

You must love that smug supperrior attitude that you have for yourself.
 Cool
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atmx2000
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RE: Airbus Refuses To Rule Out State Loans On A350

Tue Dec 05, 2006 9:24 am

Quoting Keesje (Reply 4):
Airbus says Boeing benefits from over $3 billion in tax breaks from Washington state and fat defense contracts from the U.S. government which reduce its costs on civil aircraft development. Boeing denies receiving any government assistance.



Quoting Gbfra (Reply 10):
You don't understand this point because you do not see that there are important industrial spillovers from military R&D to the Civil side. Besides the American aircraft industry benefits significantly from NASA R&D.

Airbus's parents all have military businesses that were as big as Boeing. And that these companies were largely the dominant aerospace defense contractors in their respective countries. In contrast, Boeing is neither the sole nor the largest US aerospace defense contractor. And if defense contracts were so important for success in the commercial market, MD would have beaten Boeing.

Big version: Width: 719 Height: 533 File size: 66kb


As for NASA, Airbus has benefited from NASA's work. Supercritical wings, anyone?
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Lumberton
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RE: Airbus Refuses To Rule Out State Loans On A350

Tue Dec 05, 2006 9:28 am

Quoting Astuteman (Reply 5):
'm nervous of people hanging their hats on some earth-shattering WTO ruling. FWIW, I don't think we're going to get one.

Frankly, I too would be shocked if anything significant came of this either, or if it even gets to final arguments. IMO, EADS hasn't ruled out government aid to keep the door open to a negotiated settlement. I have always felt that both sides are very reluctant to get a ruling that could have spillover into other areas like agriculture.
"When all is said and done, more will be said than done".
 
7cubed
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RE: Airbus Refuses To Rule Out State Loans On A350

Tue Dec 05, 2006 9:39 am

The European take is all about subsities. No one argues that both manufacturers get them. The US claim with the wto is about launch aid. As mentioned earlier, how can one say there's no subsities when both the French and German govt's are ass deep in both EADS and Airbus? The quote today was absurd and laughable; "We're looking for a level playing field" what a f'n joke. Airbus has rode the coattails of the European taxpayer since, what, 1969? If it wasn't heavily subsidized there would be no Airbus. You have a problem with Washington state aid, build planes there - I believe a southern state offered a boat load of tax breaks and incentives for A to build their refueling aircraft. Wonder how much the Chinese have offered A to build planes there?

As far as Nasa and Boeing's military division let's be real. Is it possible there will be no tech transfer from say the m400 to the a350? I doulbt it! Does Airbus offer an a/c with blended wingtips? If so, I believe it was the US governments funding to nasa that led to it's implementation - You're welcome Airbus.

From what I've seen, at least from the airbus side, is reality is setting in on the risks of lauching a new a/c. I own a business and I can tell you funding a new project is difficult and a major risk. If I got a handout of one third I would be a lot ballsier but I don't, so I get commercial loans and roll the dice. The EU is playin the fog game where you confuse the topic and from what I've seen here they're doing a pretty good job.

The US and Boeing's bitch is about launch aid, let's not get confused by the spinmasters in Brussels.
joe
 
sprout5199
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RE: Airbus Refuses To Rule Out State Loans On A350

Tue Dec 05, 2006 10:13 am

Quoting Gbfra (Reply 10):
You don't understand this point because you do not see that there are important industrial spillovers from military R&D to the Civil side.

And Boeing has to show its research in the commerical field. They, by law, can not use any US military research on commerical products.

Quoting Gbfra (Reply 10):
Besides the American aircraft industry benefits significantly from NASA R&D.

Does ANY Airbus aircraft use NACA Ducts? If yes then SHUT UP. Any Research done by NASA(NACA) is open to anyone.

I am so tired of this. Yes the State and Local Govts. give Boeing tax breaks, and to BMW, Toyota, Ford and anyone else who wants to employee hundreds if not thousands of people. If Airbus wants to build a factory here in Florida, then I'm sure the state of Florida, and which ever county they decide to build in, will give HUGE tax breaks to them. But on the same token, the US govt will not finance a new design. It might bail them out if things go bad(Chrysler comes to mind). But didn't Hamburg pay for the widening of the river so Airbus could bring ships into their plant?I guess my point is, My Governments reduce the amount they receive from a company, knowing that they will get 2 times that amount from the people who live and pay taxes in their state/county. The ROI comes when the product is successful. Where as the EU will pay for a new product design so that product will employee people so they dont have to pay unemployment.This helps the company more than the people. Even if that product is not successful. Sorry for the rant.

Dan in Jupiter
 
7cubed
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RE: Airbus Refuses To Rule Out State Loans On A350

Tue Dec 05, 2006 10:36 am

Spout5199

No need to be sorry! I'm certainly not. I'll admit I get a little on edge when I hear about B's unending handouts. It's about launch aid and as mentioned earlier the realities are just beginning to set in on the other side of the Atlantic. I've said since Clinton reworked the agreement in the early 90's that it was unfair. As long as B was selling more and had more market share no one cared. I knew that would change the day A out sold B. It didn't happen on that day but it did happen and the suit was filed.

Good points!
joe
 
warren747sp
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RE: Airbus Refuses To Rule Out State Loans On A350

Tue Dec 05, 2006 10:46 am

Of course, it is such a commercially viable project, commercial banks are just dying to line up for such a profitable return.
747SP
 
sprout5199
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RE: Airbus Refuses To Rule Out State Loans On A350

Tue Dec 05, 2006 11:07 am

Quoting 7cubed (Reply 20):

I think there is two things going on about Airbus and launch aid. 1. The EU doesn't understand they way we tax and the US doesn't understand the way they tax, 2. The leaders of the EU want to show the "upstart yanks" that they are better than US. Airbus is just taking advantage of #2. As a "chairman of a major company" I would do what ever is better on the bottom line, BUT doing that will hurt them in the long run. Nobody here in the states want a "economic" war with the EU, however we also know if it does happen, we will win. As much as the world doesn't want to acknowledge it, it needs the US. Just as we need the rest of the world. However, the US can pick the countries it needs most. I think the EU shouldn't force us to choose, because they will not like the choice we make. There is no "old school ties". Our country is built on the capitalist thinking. You were our enemy yesterday but you are our customer today, look at Vietnam.

Boy, this has gotten deep. If the Mods think I have stepped over the lines please delete.

Dan in Jupiter
 
7cubed
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RE: Airbus Refuses To Rule Out State Loans On A350

Tue Dec 05, 2006 11:45 am

Quoting Sprout5199 (Reply 22):

I agree, however I don't see Boeing as an "upstart" - quite the opposite. I do see the point you're making - Most Eu nations being established way back. Personally, I don't think they have a leg to stand on thus the counter suit. When all the cards are on the table the differentiating factor will be launch aid.
joe
 
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scbriml
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RE: Airbus Refuses To Rule Out State Loans On A350

Tue Dec 05, 2006 12:22 pm

OK, so let me get this straight. You'd all be perfectly happy for the EU to give EADS €4-5bn in tax breaks - which is free money, rather than a loan that has to be paid back? Problem solved!

Quoting 7cubed (Reply 18):
The US and Boeing's bitch is about launch aid

Which they agreed to in 1992, and seemed to be perfectly happy with while Boeing was comfortably ahead of Airbus.

Regarding the WTO, it's interesting how many people think it's a guaranteed win for the US. Why? In respect of WTO rules, I believe (I'll admit I'm not 100% on this) it's illegal for a company to receive indirect subsidies through it's partners - Japan's "investments" in the 787 could easily fit in this category.
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jacobin777
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RE: Airbus Refuses To Rule Out State Loans On A350

Tue Dec 05, 2006 12:28 pm

1)To the Airbus bashers-Airbus doesn't get "free" money, and does have to return the RLI..regardless if they make money on the project or not
2)To the Boeing bashers....Boeing gets state tax breaks, but so does Airbus in the United States...

While the question of whether Airbus should get RLI is debatable from an economic and philosophical standpoint, I think too much false information is thrown around here....

Also, the PCFG isn't paid by the United States taxpayers (another misconception)....
"Up the Irons!"
 
osiris30
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RE: Airbus Refuses To Rule Out State Loans On A350

Tue Dec 05, 2006 12:39 pm

Quoting Jacobin777 (Reply 25):
While the question of whether Airbus should get RLI is debatable from an economic and philosophical standpoint, I think too much false information is thrown around here....

 checkmark  I want to see Airbus off the government teet for its own good (Airbus's), not for Boeing's.
I don't care what you think of my opinion. It's my opinion, so have a nice day :)
 
atmx2000
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RE: Airbus Refuses To Rule Out State Loans On A350

Tue Dec 05, 2006 12:52 pm

Quoting Scbriml (Reply 24):
OK, so let me get this straight. You'd all be perfectly happy for the EU to give EADS €4-5bn in tax breaks - which is free money, rather than a loan that has to be paid back? Problem solved!

Yes, because it will mean that Airbus can't launch product after product without actually getting a return on investment. Airbus has gotten away with bringing so many products to market in a short time because launch aid was given on terms that significantly reduce their risk and slows debt repayment by tying repayment effectively to the success of the program.

Tax breaks on income or revenue only help you if you are selling something competitive. You have to take the risk to bring a product to market, and face the full consequences of failure on your own. I expect Airbus would not have been able to introduce so many aircraft models so rapidly if it had to borrow money to fund development under terms that nongovernmental lenders would give. They would have to slow the rate of introduction of new aircraft so debt loads wouldn't be so high (which would affect the credit rating) and require them to fund products through cash flow.

Quoting Scbriml (Reply 24):
Which they agreed to in 1992, and seemed to be perfectly happy with while Boeing was comfortably ahead of Airbus.

I would remind you that the US had two commercial aircraft vendors, one of who was already struggling due to competition from a subsidized Airbus.
Frankly, the US capitulated. The notion that US defense expenditures were an effective subsidy for US commericial aircraft production is laughable considering the bigger US defense contractors failed in the commercial market.

Quoting Scbriml (Reply 24):
Regarding the WTO, it's interesting how many people think it's a guaranteed win for the US. Why? In respect of WTO rules, I believe (I'll admit I'm not 100% on this) it's illegal for a company to receive indirect subsidies through it's partners - Japan's "investments" in the 787 could easily fit in this category.

Maybe not, since they are developing their industry, just as European governments subsidized Airbus when it was starting.
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7cubed
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RE: Airbus Refuses To Rule Out State Loans On A350

Tue Dec 05, 2006 1:10 pm

Quoting Scbriml (Reply 24):
OK, so let me get this straight. You'd all be perfectly happy for the EU to give EADS €4-5bn in tax breaks - which is free money, rather than a loan that has to be paid back? Problem solved!

You're quite the extremist, We both know that both companies get and have received tax breaks from various governments both local and at the state level. This could be seen clearly when A was looking for a site to build their tanker. And as far as "repayable", that to me seems like lip service. How much state money has been funneled into the a380? We know that money isn't repayable unless the project makes money. I'm confident it will but what if it doesn't? Point is, it takes a large part of risk out of the equation.

Quoting Scbriml (Reply 24):
Quoting 7cubed (Reply 18):
The US and Boeing's bitch is about launch aid

Which they agreed to in 1992, and seemed to be perfectly happy with while Boeing was comfortably ahead of Airbus.

Exactly, and once Airbus had established itself and was all "grown up" we'd cut the cord.
joe
 
atmx2000
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RE: Airbus Refuses To Rule Out State Loans On A350

Tue Dec 05, 2006 1:41 pm

Quoting Jacobin777 (Reply 25):
1)To the Airbus bashers-Airbus doesn't get "free" money, and does have to return the RLI..regardless if they make money on the project or not

The problem is when do they have to return the money. They may have to return the money at some point, but it will be backloaded for failed products with launch aid. I would suggest the problem is that Airbus gets a huge influx of money upfront which allows them to do what they want whenever they want. If both Airbus and Boeing received money under the same terms, what would happen is each company would end up receiving a continous infusion of money from governments whenever they end up in 2nd place, with the end result being no product made money.
ConcordeBoy is a twin supremacist!! He supports quadicide!!
 
jacobin777
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RE: Airbus Refuses To Rule Out State Loans On A350

Tue Dec 05, 2006 1:54 pm

Quoting Atmx2000 (Reply 29):
The problem is when do they have to return the money. They may have to return the money at some point, but it will be backloaded for failed products with launch aid. I would suggest the problem is that Airbus gets a huge influx of money upfront which allows them to do what they want whenever they want. If both Airbus and Boeing received money under the same terms, what would happen is each company would end up receiving a continous infusion of money from governments whenever they end up in 2nd place, with the end result being no product made money.

I don't disagree with you in theory.....but again, that's a philosophical and economic debate...my point was that there are just too much false information coming out..and I wanted to get that clear...
"Up the Irons!"
 
sstsomeday
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RE: Airbus Refuses To Rule Out State Loans On A350

Tue Dec 05, 2006 2:39 pm

Airwise.com suggests that this is a calculated move on the part of Airbus; a publicity "preemptive strike," because they want to be on the OFFENSIVE with regard to justifying the guaranteed loans they are likely to seek for the 350 program. I sense a huge trade battle brewing. It seems the lines are being drawn.

"Airbus launched a preemptive strike against Boeing over subsidies as it drew a veil over the funding of its own re-engineered A350 mid-sized jet on Monday, saying Boeing's rival 787 model was padded with government assistance."

Source: http://news.airwise.com/story/view/1165269954.html
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pygmalion
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RE: Airbus Refuses To Rule Out State Loans On A350

Tue Dec 05, 2006 3:12 pm

RLI or launch money or whatever you want to call it, reduces Airbus risk and cost of capital when introducing new products. Tax breaks do not reduce risk, they increase revenue when products are successful and only when you keep your business going. If you make a bad business decision and your product goes unsold... your tax break goes uncollected/unpaid. It does not change risk. Front paid RLI or below market loans or easier access to investment capital reduces risk and therefore is illegal under WTO.

The 1992 agreement was a political one. EU and US agreed that RLI was illegal but would be allowed at 1/3 rate to allow Airbus to get situated in the market. It also said that the RLI would be reduced as Airbus gained ground... But Airbus loved getting RLI and so it never went away even when Airbus hit 50%+ market share. So the US said. We hereby cancel the agreement as allowed by that agreement. RLI was illegal before 1992... it was allowed temporarily by the 1992 accord and now that the 1992 accord is no longer in force, being canceled, as allowed, by one of the parties (US)... RLI is once again illegal.
 
trex8
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RE: Airbus Refuses To Rule Out State Loans On A350

Tue Dec 05, 2006 5:23 pm

Quoting Pygmalion (Reply 32):
EU and US agreed that RLI was illegal

really?

Quoting Pygmalion (Reply 32):
It also said that the RLI would be reduced as Airbus gained ground.

where in the agreement? Washington must have a different English translation than Brussels has?
http://eur-lex.europa.eu/LexUriServ/...do?uri=CELEX:21992A1017(01):EN:NOT
 
trex8
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RE: Airbus Refuses To Rule Out State Loans On A350

Tue Dec 05, 2006 5:44 pm

sl OT but they must be celebrating at NG and EADS, USAF will not take WTO dispute into account re tanker program
http://today.reuters.com/summit/summ...reuters_aerospace_n_defense_summit

so when are they ever going to launch this A332F?
 
astuteman
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RE: Airbus Refuses To Rule Out State Loans On A350

Tue Dec 05, 2006 6:09 pm

Quoting 7cubed (Reply 18):
If I got a handout of one third

That would be great for you. But RLI is not a "hand-out".  no 

Quoting Sprout5199 (Reply 19):
Where as the EU will pay for a new product design

But they don't

Quoting Sprout5199 (Reply 19):
But didn't Hamburg pay for the widening of the river

They pay for this... (in your own words, too..), and infrastructure investments like it. All Airbus R+D spend is revenue funded - so sorry.

Quoting Sprout5199 (Reply 22):
Our country is built on the capitalist thinking

And using your size and political clout to play one regional incentive package off against another, and so get the best deal, is of course, a practice that's NEVER carried out by the fine "capitalist" companies in the USA?

It's certainly common to hundreds of multi-nationals keen to set up business in the UK, or the EU for that matter.......
Presumably the likes of Nissan, Toyota, Ford, GM, IBM, Haliburton, Exxon (should I go on) are all "socialist" businesses dependent on government hand-outs.........

Quoting Atmx2000 (Reply 27):
Airbus has gotten away with bringing so many products to market in a short time because launch aid was given on terms that significantly reduce their risk and slows debt repayment by tying repayment effectively to the success of the program.

Or at least that's your take on it.......

Quoting Jacobin777 (Reply 30):
my point was that there are just too much false information coming out

Unfortunately, Jacobin, that's the most accurate, possibly the only accurate, statement in this thread.
We (all - I'm not differentiating here) seem much too keen to jump on jingoistic arguments simply because they match our own personal agendas.
These then become "fact".


Quoting Lumberton (Reply 17):
Frankly, I too would be shocked if anything significant came of this either,

Some people are going to be very disappointed when their "facts" don't get reflected in an earth-shattering WTO ruling.

Regards
 
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scbriml
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RE: Airbus Refuses To Rule Out State Loans On A350

Tue Dec 05, 2006 11:32 pm

Quoting 7cubed (Reply 28):
You're quite the extremist

Been called a few things, but never that! rotfl 

Quoting 7cubed (Reply 28):
We know that money isn't repayable unless the project makes money.

We do? Would you have any reference that indicates this?

Quoting 7cubed (Reply 28):
Exactly, and once Airbus had established itself and was all "grown up" we'd cut the cord.

Does it actually say that in the agreement? How exactly does the agreement define the point at which Airbus becomes "grown up"?
Time flies like an arrow. Fruit flies like a banana!
 
jacobin777
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RE: Airbus Refuses To Rule Out State Loans On A350

Wed Dec 06, 2006 12:54 am

Quoting Astuteman (Reply 35):
Quoting Jacobin777 (Reply 30):
my point was that there are just too much false information coming out

Unfortunately, Jacobin, that's the most accurate, possibly the only accurate, statement in this thread.
We (all - I'm not differentiating here) seem much too keen to jump on jingoistic arguments simply because they match our own personal agendas.
These then become "fact".

Thanks for the kind words...actually Astuteman, I find your posts to be quite accurate, the only problem is I feel I need a bloody Ph.D. to get through them.. Wink
"Up the Irons!"
 
baroque
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RE: Airbus Refuses To Rule Out State Loans On A350

Wed Dec 06, 2006 1:00 am

Quoting Jacobin777 (Reply 25):
While the question of whether Airbus should get RLI is debatable from an economic and philosophical standpoint, I think too much false information is thrown around here....

All too true as the Astute one has remarked.

The comment about both sides being worried agriculture would get caught up is probably another dimension that might not be as obvious as it could be powerful. Those FL sugar cane farmers are a ferocious bunch in defence of their neat little scheme and you would not want to cross a mass of French farmers. All in all, not a good scene!
 
airfrnt
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RE: Airbus Refuses To Rule Out State Loans On A350

Wed Dec 06, 2006 1:51 am

Quoting Astuteman (Reply 5):

.....things might not be much different.

I'm nervous of people hanging their hats on some earth-shattering WTO ruling. FWIW, I don't think we're going to get one.

(But then I don't think the issue is anything like as clear-cut as some do, for a number of reasons )



Quoting Asturias (Reply 7):
As far as I can tell, the WTO is the UN of business. Good luck on that.

This is the difference between the American experience with the WTO and the European experience. America had far more liberal trade laws going into the WTO period, but Europe very successfully used the WTO to slam areas that had been special interest issues, like fruit and steel exports.

Now the shoe is going to be on the other food. Airbus is clearly a special interest in Europe, and has many of the same breaks and structures that those industries had in America. If the WTO doesn't at least pretend to hold the same standards when it is dealing with Europe versus America, there is going to be a massive backlash.

Quoting Astuteman (Reply 35):

That would be great for you. But RLI is not a "hand-out". no

In this case, I would very respectfully request that you read the credit bureau's (whom all of the banks use to interpret Airbus's financial state). In particular Fitch recently had a great write up on Airbus's financials, in which they explicitly state that because of the repayment terms, political realities, and governmental expectations, they did not consider the RLI aid as debt, and as such did not factor it into Airbus's credit rating.
 
pygmalion
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RE: Airbus Refuses To Rule Out State Loans On A350

Wed Dec 06, 2006 1:52 am

in 1991 there was a GATT subsidy case against the EU for loans to Airbus. GATT ruled that the launch aid/ loans were subsidies and were in violation of GATT. The EU blocked the ruling as was allowed by GATT rules.... When WTO came about in 1992, there was an open ruling about the illegal subsidies... the EU and the US reached a bilateral accord that agreed to RLI as long as it was decreasing as Airbus gained market share. Both parties agreed that RLI was a violation by ruling of the GATT, but in order to allow Airbus to become competitive, it would be allowed as long as it was decreased as Airbus gained ground. In 2000, the US complained that Airbus was not decreasing RLI as they gained market share, the matter was let dropped by the US. In 2003 or so, the US again brought up the fact that Airbus was not decreasing RLI as agreed to in the Accord. In the end, the US canceled the accord as allowed by giving one years notice. When that year expired, the US filed a WTO complaint that Airbus was receiving RLI that was in violation of WTO rules. And here we are today.
 
sstsomeday
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RE: Airbus Refuses To Rule Out State Loans On A350

Wed Dec 06, 2006 2:13 am

Quoting Atmx2000 (Reply 27):
Yes, because it will mean that Airbus can't launch product after product without actually getting a return on investment. Airbus has gotten away with bringing so many products to market in a short time because launch aid was given on terms that significantly reduce their risk and slows debt repayment by tying repayment effectively to the success of the program.

Tax breaks on income or revenue only help you if you are selling something competitive. You have to take the risk to bring a product to market, and face the full consequences of failure on your own. I expect Airbus would not have been able to introduce so many aircraft models so rapidly if it had to borrow money to fund development under terms that nongovernmental lenders would give. They would have to slow the rate of introduction of new aircraft so debt loads wouldn't be so high (which would affect the credit rating) and require them to fund products through cash flow.

Yes, tax breaks come at the BACK END, once you start to make money. It's quite different than up-front risk and development money.

In addition, I would suggest, because it is easier to launch a clean-sheet A/C with launch aid, that the wrong A/C sometimes get green-lit. I suspect that the 340 and 380 might have not be launched in their present forms, and that Airbus would have done a more careful analysis of market indicators and available technology, like Boeing did, and instead have come up with a 777-type A/C class of their own, as well as not be so late with the 350. Perhaps they would have noticed, even before the 380 was green-lit, that the 747 had already seen it's heyday and airlines were turning to more point-to-point and frequency. They might have predicted that the 380, spectacular as it is, would end up being a "niche" market. I'm suggesting that launch-aid might have made Airbus cocky and over-confident or at least complacent, and their choice of new products may have been coming more from managers/politicians wearing rose-colored glasses and with launch aid in their pockets, than from engineers. Launch aid, ironically, I think is a double edged sword.

I think Airbus' philosophy to build a better 737 (320), and build a better 767 (330), which worked out very well for them, fell flat when they applied the same strategy to a 747 competitor (340, 380). I suggest launch-aid was partially responsible for less than sound judgement regarding recent A/C types.

Quoting Atmx2000 (Reply 27):
The notion that US defense expenditures were an effective subsidy for US commercial aircraft production is laughable considering the bigger US defense contractors failed in the commercial market.

Also, since Boeing competes with other American defense contractors, and since EADS is a defense contractor and could pursue more of that market if it wished, I find this part of the issue a non-debate.

Quoting 7cubed (Reply 28):
We both know that both companies get and have received tax breaks from various governments both local and at the state level. This could be seen clearly when A was looking for a site to build their tanker.

This is interesting. I would like to know more information about how EADS/Airbus receive tax breaks or other, less apparent subsidy. I know it's actually impossible for a large company in the U.S. NOT to receive tax breaks from states who are competing to have them participating their the local economy.

In terms of taxation, I wonder whether AIDS/Airbus is at a comparative disadvantage, because I would imagine corporate taxes in general are higher in those social democratic countries with expensive social programs. I need to become educated in this regard - I don't know the whole story, and opinions in this forum are obviously quite polarised.
I come in peace
 
astuteman
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RE: Airbus Refuses To Rule Out State Loans On A350

Wed Dec 06, 2006 2:17 am

Quoting Jacobin777 (Reply 37):
I feel I need a bloody Ph.D. to get through them..

Not to mention 45 minutes free time  Smile

Quoting AirFrnt (Reply 39):
In particular Fitch recently had a great write up on Airbus's financials, in which they explicitly state that because of the repayment terms, political realities, and governmental expectations, they did not consider the RLI aid as debt, and as such did not factor it into Airbus's credit rating.

I'm sure they're entitled to hold that view, and I'm sure they have their reasons.

But so far, RLI's have not been hand-outs. They have been loans with repayment terms, which have been honoured, and then some on top of that.

Whether A340NG loans, or A380 loans get written off in the future is a matter for the future, but they certainly haven't been so far.
FWIW, if one outcome of the WTO discussion is "you'd better honour these loans and repay them at the due time, whatever happens", I think that would be entirely reasonable.

Regards
 
pygmalion
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RE: Airbus Refuses To Rule Out State Loans On A350

Wed Dec 06, 2006 2:51 am

Quoting SSTsomeday (Reply 41):
In terms of taxation, I wonder whether AIDS/Airbus is at a comparative disadvantage, because I would imagine corporate taxes in general are higher in those social democratic countries with expensive social programs. I need to become educated in this regard - I don't know the whole story, and opinions in this forum are obviously quite polarised.

I wouldnt call it a disadvantage... Airbus airplanes have a complete exemption from the VAT (Value Added Tax)... so in terms of tax breaks it appears quite similar if not tilted in favor of Airbus... VAT exemption in lieu of a reduction... Boeing gets a sales tax reduction from the state of Washington, not an exemption.
 
jacobin777
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RE: Airbus Refuses To Rule Out State Loans On A350

Wed Dec 06, 2006 3:01 am

Quoting Astuteman (Reply 42):

Not to mention 45 minutes free time  Smile

I would say even longer... Wink

Quoting Astuteman (Reply 42):
But so far, RLI's have not been hand-outs. They have been loans with repayment terms, which have been honoured, and then some on top of that.

 checkmark 

Quoting Astuteman (Reply 42):

Whether A340NG loans, or A380 loans get written off in the future is a matter for the future, but they certainly haven't been so far.

 checkmark 
"Up the Irons!"
 
pygmalion
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RE: Airbus Refuses To Rule Out State Loans On A350

Wed Dec 06, 2006 3:06 am

whether paid back or not, they are still front loaded and risk reducing.
 
Rheinbote
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RE: Airbus Refuses To Rule Out State Loans On A350

Wed Dec 06, 2006 3:50 am

Face it, all large companies around the world get taxpayer money 'benefits' they essentially don't need, let alone deserve. Being large, they have the power to 'lobby' politicians and governments. The WTO is a lame attempt to distract from this fact and pretend that a kind of 'justice' is maintained. As someone else pointed out, WTO is the UN of international trade.
Both the US and the EU will partially loose their cases. Both will have devised new kosher schemes of providing taxpayer money to their national champions well before any ruling is issued by the WTO panel. All the bickering about subsidies is futile, in effect nothing will change.
 
astuteman
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RE: Airbus Refuses To Rule Out State Loans On A350

Wed Dec 06, 2006 3:51 am

Quoting Pygmalion (Reply 45):
they are still front loaded

They're easier to launder that way...........  Wink

Regards
 
pygmalion
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RE: Airbus Refuses To Rule Out State Loans On A350

Wed Dec 06, 2006 3:59 am

I prefer top loaded myself... dont have to bend over as much.  Smile
 
astuteman
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RE: Airbus Refuses To Rule Out State Loans On A350

Wed Dec 06, 2006 4:50 am

Quoting Pygmalion (Reply 48):
I prefer top loaded myself... dont have to bend over as much

A whole host of answers spring to mind......  Smile

Quoting Pygmalion (Reply 45):
they are still front loaded and risk reducing

Having endured the flippant response (my thanks), on a serious note, I'm not inclined to disagree with this comment.

Regards