How can the EU say that Boeing is subsidized by the US?

Answer 1

It sort-of is via gov contracts, tax breaks etc. But it is no where nearly the subsidy EADS/Airbus gets. Let's get real-- there are now only 2 real commercial airline companies-- Airbus and Boeing.

Airbus is in a world of hurt given that they can't deliver on the super-jumbo and I think the a350 is in trouble too. Boeing is kicking butt with their aircraft and the dreamliner will be great.

They'll do what they need to do to protect their industry.

Answer 2

Boeing has long been involved in the Space Program they also make a lot of military planes and helicopters. Air Force one is a specialized 747, which is made by Boeing.

It is hard to separate payments for work done, bonuses for a good job and other contract required payments. The EU can make a case for Boeing being subsidized by the US Government so they can illegally compete with companies like Air Bus. Boeing and the US government can make an equally compelling case for Boeing not being subsidized by the US. It is more a case of politics than actual trade. The new Air Buses mega airliner will compete with the currently largest passenger jet in service the Boeing 747. Since France is a member of the EU they get EU backing in both trade negotiations and politics.

This claim is a way to make Air Bus look better, but if you go into their financial records you can discover evidence of government help. Since Air Bus doesn't make as many military products or do as much work in the space program they can make a "purer" claim that the French government is not helping them. But, when you have a lot of contracts and dealing with a government then the finical records get complicated and many interruptions of the data can be made.

Japan took government subsidy of industry to new heights, it is been an old tactic, but Toyota was operating at a loss, for years, until it got a firm hold in the American Economy. So this case is far from unique. One common method to protect a nation's industries is for the government to pass tariffs on goods from another country. So if you put a tariff (a kind of tax) on cheap Japanese Steel then the more expensive American Steel can compete, or even be cheaper; inside the American market only. An American tariff on Air Bus could kill the company, just as a tariff on Boeing by the EU could kill Boeing.

The new Air Bus is quite controversial and it is still a question if other airlines are willing to invest in them or airports are willing to modify their terminals to service the new planes (these planes are true double decker airplanes). When Boeing made the 757 they made a plane smaller than the 747 thinking that the market was going in that direction. Now Air Bus is trying to introduce a plane that is at least 150% the size of Boeing's 747. If they are going to make it work then they will need a lot of support. This claim of government subsidies is one tactic to help produce that support and it will be more popular and have more support in Europe than in the US. The key is the US market though, since the largest airlines are US based companies or have large US markets. If Air Bus can replace all the current 747s in use or future orders for them then they will become very rich. The EU will also profit greatly. This is an equally important issue for Boeing, if the new Air Bus becomes popular then Boeing will have to play catch-up and that could be a serious problem for them.

Personally I think that this claim is false. Boeing has to compete with other nations and they have lost some key government contracts (like the F22 Raptor that went to Lockheed), which argues against government subsidies being paid. The requirements for the F22 program were extensive and both companies invested a lot of money. Since Boeing lost the competition they not only lost the contract, but they lost a lot of time, research, and money.

An Air Bus megaplane has to cost a lot more than a Boeing 747 and is the end product of a lot of research, invention and represents a whole lot of money and time invested. The parts for the new plane will come from all over the EU so if it sells then all of the EU will profit. A lot of things are at stake including jobs. When jobs (and tax revenues) are at stake it is difficult for politicians to NOT get involved. I am sure that Boeing will fire back with their own claims and counter claims. This is all part of a competition to win over public support and sell airplanes.

Answer 3

I believe they say because of the military contracts they get from the government. There also may be some tax breaks. Interesting the socialist Europe that has no military (can't afford it because of their social spending) and says the US is subsidizing a company for that company landing a contract to build a product. Yet I believe that they invest directly with airbus, giving money directly to the company for no work performed.

Answer 4

Boeing is very helpful in the aviation industry of the US and it is just right that the latter will subsidize its development programs.

Answer 5

some special programs receive govt grants. EU can say anything they want, but it is usually bulls**t.

Answer 6

Because they believe it to be true. It was true in the past and may be true now , thats why they want it investigated.

Answer 7

by simply making the statement.

Answer 8

They can say that because it's true.

Answer 9

because it is.