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Eric Heymann Sees Wasted Energy in the Airbus-Boeing Trial

If an agreement can be reached in the WTO dispute between Airbus and Boeing, it will be achieved only after a long and costly process, writes Eric Heymann of Deutsche Bank Research. Since the original agreement of 1979, the issue of subsidies has become a focal point of heated discussion. Both sides accuse one another of receiving state subsidies, which hinder open competition. Heymann, writing for AICGS, calls this trial a waste of resources which could be better spent on developing new markets and products.

 

 
Tags: | AICGS | subsidies | Airbus | Boeing | EADS | Deutsche Bank research | WTO |
 
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Dominik  Bertram

Thu, Apr 12th 2007, 20:42

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I like this comment! What's this?
Heymann does have a point, since it appears to be more important for EADS at the moment to make some progress on their bid for the pentagon contract, as well as their launching of the A 380.
 
Christoph  Suess

Tue, Mar 4th 2008, 10:57

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I like this comment! What's this?
"it appears to be more important for EADS at the moment to make some progress on their bid for the pentagon contract"

Obviously EADS's bid for the pentagon contract was successful ;-)

What strikes me is the domestic turmoil in the US that the announcement has evoked. Of course, I understand the US workers in their concern over a possible loss of employement there. However, their main argumentation is - in my view - plainly wrong: if the Europeans produce for the US military, this makes the US more vulnerable. This leads into the completely wrong direction! If we as transatlantic partners even cannot trust each others in such fundamental matters as war and peace, whom can we trust then at all? India, North Corea, and Lybia? I just hope that US politicians won't give in this matter and set a positive example for trust in transatlantic relations!!!

 
Donald  Stadler

Wed, Mar 5th 2008, 19:26

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I wonder whether some the business EADS is having may one day be considered Pyrric victories? EADS seemed last year to be cutting prices on their main line business jets to cover the losses incurred by the A380 delivery debacle. That may have improved cash flow in the short term but only by 'buying' orders by discounting sales which would otherwise have been made in the future at closer to list price.

I don't know the specifics of the winning EADS bid for the transport aircraft. It may have been a Pyrric victory or perhaps the Pentagon got an unusually good deal to allow EADS to enter a potentially much larger market in other countries for similar aircraft. The demand for such aircraft would seem to be low except possibly in the UK, France, and Germany. Russia has it's own manufacturer of these aircraft which would leave China.
 

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