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Executive Rhetoric At Farnborough

Tue Jul 20, 2004 9:32 am

To all:

If you've been on for any length of time, you know very well that the Farnborough or Paris airshows are primetime for the executives from our favorite framemakers. This year would have been no exception had Harry not raised the ante and possibly changed the way A&B will do business in the future.

Of course, we have to deal first with the posturing, sniping and calumnizing of the "other side" (take your pick), taking issue with and ridiculing the market forecasts, design philosophies, strategies, A380 weight, 7e7 concept, subsidies, ect, ect. It would appear that the US content of the respective maker's planes has also acquired a status of its' own this year. I know that Airbus has been on a large-scale PR campaign in the US this year in order to portray its' a/c (especially A380) as very "American", putting on PR events at various suppliers & contractors to highlite the amount of investment and jobs being created in the US by Airbus. Now, credit where credit is due; Airbus has put quite a bit of money where it's corporate mouth is and jobs and investment are being created here. I suspect that it probably has more to do with the exchange rates than anything but, "handsome is as handsome does";
people are working, jobs and investment are being created and that's what really matters. Nevertheless, I do have to laugh at Mr. Hertrich's remarks about the relative "US content" of Airbus vs Boeing planes. The globalization of the industry has forever blurred the distinctions over "domestic" manufacture, wherever it may be. Are these executives the last to know?Well, maybe the not the last. Some of the  Nutshorn-blowers Nuts,  Nutsflag-wavers Nuts and  Nutsdrum-beaters Nuts here on still need to learn.

On a more serious note, one has to look very carefully at the statements being made by the various personalities this year about the 1992 agreement and the related subsidy issue. While there is no doubt that the mandatory rhetoric and equivocating is currently going on, I certainly believe that Harry and Boeing's political allies have served notice that the 1992 agreement is dead and that it is in the best interest of both parties to come to a mutually beneficial agreement before the politicians become actively involved. It would seem that from some of their statements, Mr. Forgeard and Mr. Camus realize this and have stated publicly that a trade war is not desireable and that all issues can be put on the table. If all parties are sincere, this could radically alter the thorny relationship between the US/EU regarding commercial and military aviation and defense spending. We shall see...

The one other issue which interests me in particular is the USAF tanking requirement. It would seem that EADS and its US allies sense a real opportunity for a KC-330 in the wake of the simmering Condit/Sears/ Druyun/ KC-767 scandal and the unwillingness of opponents to let it die. Personally, I have no issue with buying foreign equipment if it is the best option available.
However, I do have a problem with what I perceive as a "poor value" proposition,
and reading that Mr. Hertrich suggests that an A330, already a vague 40% American a/c, made 50% with tanking modifications represents good value to the US taxpayer is an absolutely ludicrous idea if ever I heard one. If the USAF were to even entertain the idea of shelling out billions for 500 planes that are only 50% US content and not even built here, I would let every politician in my district know what I think of that and what I thought of them as guardians of the public trust if they didn't run Ralph Crosby out of Washington until he had more (lots more) from EADS to offer.



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