Wants US, EU To Abandon Feud Before WTO... But Also Takes Aim At Boeing

Allan McArtor, chairman of the North American division of European planemaker Airbus, says his employer and America's Boeing should abandon their contentious and costly battle over aircraft subsidies and negotiate a new trade agreement. But wait... this isn't necessarily peace in our time.

Despite his appeal for calm, McArtor also took the opportunity to chide Boeing -- accusing his US rival of employing "offensive and totally inappropriate" tactics, as it competes against Airbus for the lucrative KC-X Air Force tanker contract. McArtor made his comments this week in an interview with Thompson Financial.

McArtor also alleged then-Boeing CEO Harry Stonecipher prodded the US government to launch action against the European Union before the World Trade Organization in 2004, as a "smokescreen" measure to mask troubles at Boeing. Furthermore, McArtor asserts Boeing has received over $24 billion in government subsidies... an amount "far out of bounds with WTO rules."

For all the vitriol, however -- and McArtor's staunch belief Airbus has done nothing wrong in regard to receiving government subsidies, which he readily admits planemakers on both sides of the Atlantic will probably continue to benefit from -- the Airbus executive and former US Air Force pilot believes more would be accomplished on both sides if the WTO case was thrown out.

"Let's face it: if the WTO process plays out, we're going to end up negotiating something anyway," he said. "Why not skip the national histrionics and the lawyer-enriching trials and hearings and go right to the negotiating."

ANN has reported extensively on the ongoing WTO battle. In September, Boeing stated the EU is vastly overestimating what the US government has paid Boeing over the past 30 years. The EU claims at least $10.4 billion (less than half what McArtor alleges); Boeing argues it has received only about $750 million over that period.

McArtor believes both sides should instead get to work on revamping a since-mothballed 1992 trade pact, with close attention paid to defining acceptable levels of government support. That's not likely to happen, McArtor adds... and, yes, he places the blame for that on Boeing, saying the planemaker is using the WTO battle as the "centerpiece of their PR campaign" to win the KC-X deal.

A tanker variant of Boeing's 767 commercial airliner is duking it out against a similarly-modified version of the Airbus A330 for the KC-X bid. A team comprised of Northrop Grumman and Airbus parent company EADS is offering the KC-330 against Boeing's KC-767; whichever side wins the deal will provide the Air Force with 179 planes over 15 years.

FMI: www.af.mil, www.boeing.com/ids/globaltanker/index.html, www.northropgrumman.com/kc30/