Thu, Oct 06, 2005
EADS Directors Vote To Go Without Government Funding -- For
Now
Seeking to diffuse the trade tensions between the US and EU over
aircraft manufacturer subsidies, Airbus parent company EADS decided
Thursday to forego government loans for the development of the A350
-- for the time being. EADS called its move "a new window of
opportunity" in the financing spat that has the US and Europe
snarling at each other in World Trade Organization Court.
It's the biggest trade controversy ever and, if it is actually
litigated in WTO Court, could take years -- decades -- to shake
out.
"We strongly support government efforts to find an equitable and
mutually supported resolution and we call upon our competitor to do
the same," said EADS' co-CEOs Noel Forgeard and Tom Enders in a
statement quoted by Reuters. The announcement came as EADS board
members also approved the launch of the Airbus A350 -- designed as
a direct competitor to the Boeing 787 Dreamliner.
As Aero-News has extensively reported in the past,
the US filed a complaint to the WTO over European government loans
to Airbus for development of new aircraft lines. The European Union
immediately counter-sued, complaining that Boeing gets even more
subsidies from NASA, the Department of Defense and local
governments looking to land Boeing manufacturing
facilities.
European governments have approved about one-third of the $5.3
billion in development costs associated with the A350. None of that
loan money has yet been dispersed.
The US Trade Representative reacted
angrily to the EADS overture Thursday. "It's clear that the EU
countries are unwilling to stop subsidizing Airbus. Therefore, we
will continue to push ahead with our WTO case," spokeswoman
Christine Baker said in an e-mail statement quoted by the
Associated Press.
There was no immediate reaction from Boeing on the olive branch
extended by EADS. Industry analysts said the move was, in reality,
pretty insignificant, since Airbus won't incur major costs in
developing the A350 until 2006 and 2007. Airbus plans to launch the
A350 in 2010.
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