Boeing Engineers May Press Case With US on Airbus Subsidies
Seattle, Dec. 5 (Bloomberg) -- Frustrated by years of job cuts amid increased competition with Airbus Industrie, Boeing Co.'s engineers are taking matters into their own hands.
The U.S. planemaker's largest union of engineers said it's considering a complaint with the U.S. Department of Commerce and the U.S. International Trade Commission. The union claims Airbus gets unfair state subsidies and dumps products, or exports them at prices below those in its home markets.
The engineers in particular want to restrict the subsidies Airbus can get to develop its A3XX ``superjumbo'' jetliner, said Kristin Farr, the union's assistant general counsel. The 550-seat plane Airbus hopes to introduce in 2006 would be the first airliner larger than Boeing's 30-year-old 747, one of the company's most profitable products.
``We've got standing in this as a representative of the workers,'' Farr said. ``They've seen the attritions and layoffs because we've lost market share to Airbus.''
So far the union has done some initial legwork and met with Commerce officials about the types of forms it would need to file, she said. With one full-time lawyer and eight members of a legislative committee on the case, the union lacks the resources of Boeing or the U.S. government.
The engineers would prefer to team with other unions, Boeing and the government to press the claim, said Charles Bofferding, executive director of the union, the Society of Professional Engineering Employees in Aerospace. It represents 24,000 of Boeing's 197,900 workers.
``I would say we're in an exploratory stage rather than committed to taking specific action,'' Bofferding said.
Boeing and Airbus, founded in 1970 as a partnership of four European planemakers, are the only two rivals in the $50 billion-a- year market for large jetliners.
Airbus has progressed from selling just one type of wide- bodied plane to a 39 percent share of world deliveries this year. Since mid-1998, meanwhile, Boeing has cut more than 40,000 jobs from a workforce that peaked at 238,600.
Boeing has long called on U.S. officials to challenge what it views as unfair aid to Airbus. It claims state subsidies violate a 1994 World Trade Organization agreement, and complains that Airbus hasn't given enough information about the terms of government loans for the A3XX.
``We have the same concerns'' as the engineers, said Tim Neale, a spokesman for Boeing.
Still, he said the company would prefer to see the case resolved by governments through the WTO rather than to take action based on U.S. law as the union proposes. Dumping cases are typically controversial and might end with the U.S. levying additional duties on imports.
``We're strong supporters of the WTO process and see that as the way to resolve these international trade disputes,'' Neale said. ``And the WTO does have a very specific agreement on subsidies -- it doesn't allow them.''
The union said it might seek to file a case with the WTO later. Farr, the engineers' lawyer, said their main concern now is to raise the issue and gather evidence.
It isn't clear where the U.S. stands on pressing a case at the WTO. U.S. Trade Representative Charlene Barshefsky has repeatedly asked the European Union for more information on A3XX financing, but hasn't made a formal complaint to the WTO. U.S. and EU officials are due to discuss the matter again this month. Policy could change under a new U.S. administration.
Officials for the Commerce Department and the ITC, a semi- judicial independent agency, declined comment. Airbus spokesman David Velupillai also declined comment. The planemaker has long said the aid it gets is legal.
Dec/05/2000 12:40 ET
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