Friday, February 2, 2007

US official explains Airbus state subsidies

EADS demands a "fair playing field" to compete against American companies for Pentagon tanker and cargo transport contracts. But it hides its own huge subsidies from European gobernments - and thus misrepresents itself to the Department of Defense, Congress and the public.

Here's a summary of how EADS/Airbus unfairly competes with American aircraft companies. The following is an excerpt from testimony by Under Secretary of Commerce Grant T. Aldonas before a House panel in 2001:

"The single largest U.S. civil aircraft competitor is Europe’s Airbus, and the nature and scope of this competition is different from any other kind of competition that we encounter. In the United States, aircraft manufacturers have never been owned by the government. With the exception of military aircraft procured in the interests of national defense, the U.S. Government has not sought to direct what type of aircraft are produced, or when they are produced, or the price at which they are sold. Our industry is dynamic and shaped by market forces.

"European governments have a different orientation. Many governments in Europe view aircraft manufacturing in terms of its contribution to their national economic and engineering capability. These governments point to the aerospace industry as an engine of high technology growth and jobs.

"Airbus and other major aircraft manufacturers in Europe have a history of government ownership and control. Given this direct financial interest, European governments have undertaken steps to boost their industry’s competitiveness. Airbus’s corporate structure is telling. Airbus is owned by two companies: 20 percent is owned by British Aerospace Systems, and 80 percent by the European Aeronautics Defense and Space Company (EADS), which is the result a merger (of France’s Aerospatiale, Germany’s DASA, and Spain’s CASA) that was created at the behest of European governments.

"The Airbus consortium’s 'parent' governments have intervened in sales competitions in an effort to win orders for Airbus. Due to the fact that many foreign airlines are government-owned or substantially government-controlled, political rather than market forces can become decisive factors in purchasing decisions. In the past, some European governments have sought to influence these decisions by potentially offering increased airline landing rights for the purchasing airline, granting preferential trading rights in unrelated sectors to benefit the country purchasing aircraft, and demonstrating willingness to advance the status of countries interested in joining the European Union. The United States makes no such linkages."

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