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Us Accuse Britain Of Stoking Trade Row With £340m Airbus Loan

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http://www.guardian.co.uk/business/2009/au...rade-row-airbus

The trade dispute between the US government and the European Union over state backing for Boeing and Airbus escalated after Washington accused Britain of taking a "major step in the wrong direction" by pumping £340m into the Airbus A350 widebody jet programme.

Lord Mandelson, the business secretary, drew rebukes from US officials after announcing that the UK government will help fund the construction of the rival to the Boeing Dreamliner. The £340m loan towards building wings for the A350 will secure more than 1,200 jobs at plants in Filton, near Bristol, and at Broughton in north Wales. Lord Mandelson denied that the loan constituted a naked state subsidy and described the ongoing legal row between the US and the EU as "senseless".

He said: "This is neither a bailout nor a subsidy, we're not sinking money from which we'll never see a return. This is a first-rate investment in British engineering expertise."

However, the Office of the United States Trade Representative, which negotiates trade agreements on behalf of the US president, slammed the move. The US has brought a case against the EU at the World Trade Organisation, which is expected to deliver preliminary findings on alleged multibillion euro subsidies to Airbus over the next month. The EU has launched a countersuit, claiming that Washington backs Boeing with substantial payments, with Airbus alleging that $5bn (£3bn) of Federal cash has been invested in the Dreamliner project alone.

"The commitment of launch aid, or any other form of preferential financing, by any of the EU member states would be a major step in the wrong direction," said the USTR. "We want to resolve the problem of WTO-inconsistent aircraft subsidies, but the commitment of additional support would make that even harder."

Mandelson, who launched the counterclaim against the US government when he was European trade commissioner, said Washington and Brussels had become embroiled in "senseless tit-for-tat" disputes. "I did not welcome it, or seek it, but it was inevitable once the Americans started down this course," he said.

Boeing said it was "disappointing" that EU states were investing vast sums in the A350 programme ahead of the WTO announcement. The A350, which has received nearly 500 orders from 30 customers, has received support worth €1.1bn from Germany and €1.4bn (£1.2bn) from France. "Airbus should finance its aircraft development using its own cash and commercial loans," said a Boeing spokesperson.

A spokesperson for Airbus said the company needed state backing to compete with its American rival. Airbus has plants in Germany, France, Spain and Britain and is owned by EADS, whose shareholders include the French and Spanish governments as well as German car manufacturer Daimler.

"The objective is to achieve a level playing field," he said.

Ministers hope that in addition to supporting jobs at Filton and Broughton the loan will help create and sustain more than 5,000 jobs within the supply chain across the UK. The news follows Rolls-Royce's announcement last month that it will open four new factories in the UK, creating or saving 800 jobs, helped by the government's building Britain's future programme.

The French and German governments have already announced support for the A350 and Spain is in discussions with Airbus.

Trade wars, protectionism it's all hotting up.

Globalisation making the world smaller and happier.

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Guest KingCharles1st

this is what is so worrying about Mandy- sometimes he does the right thing- or maybe just does the "Which side is Mandy's bread best buttered" thing

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this is what is so worrying about Mandy- sometimes he does the right thing- or maybe just does the "Which side is Mandy's bread best buttered" thing

:ph34r:

yeah

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Well, the "Special relationship" we have with America has been stressed somewhat this week.

  • Plans to release the Lockerbie bomber
  • Their hatred of anything that could be classed as socialist, such as the NHS
  • Airbus loan

Could be fun.

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Guest KingCharles1st
Well, the "Special relationship" we have with America has been stressed somewhat this week.
  • Plans to release the Lockerbie bomber

  • Their hatred of anything that could be classed as socialist, such as the NHS

  • Airbus loan

Could be fun.

Sometimes I would rather have a "special relationship" with Sibley or Bruno than the Americans

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Don't those silly yanks get it?

When Mandy gives Airbus cash, it's "investing to provide liquidity on a commercial basis to provide" blah blah blah

When the yanks give Boeing cash it's a subsidy.

Simple. Non? :rolleyes:

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Thats gotta be salt in the wounds for Boeing, delays to the 787 are really hurtung them. Airbus have caught up pretty fast with the A350...

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Yes - interesting that the article doesn't mention that angle. Relatives in the industry tell me that the 787 project is in fact in very deep trouble: under stress testing, a crucial weight-bearing part of the wings failed at far less than its designed tolerance. The engineers still haven't established why, and apparently another year's delay is an optimistic estimate. Even on that basis, the 787 will enter service about 2.5 years behind schedule, compared to only 1.5 for the A380. If Airbus can bring the A350 into service with significant less time and cost overruns than Boeing have experienced with the 787, this will potentially give them a significant advantage.

But there again, by the time either plane is ready to fly, oil reserves may have been depleted so much and the global economy may be so sodomised that there's no longer any market for either of them...

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Our special relationship with America is over, I think they realised were not as important as we thought we were, it's all down to cash no ones got any to spare so were on our own, good.

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Our special relationship with America is over, I think they realised were not as important as we thought we were, it's all down to cash no ones got any to spare so were on our own, good.

Perhaps a bit of the opposite is happening too?

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Even on that basis, the 787 will enter service about 2.5 years behind schedule, compared to only 1.5 for the A380. If Airbus can bring the A350 into service with significant less time and cost overruns than Boeing have experienced with the 787, this will potentially give them a significant advantage.

Yes, this could be disastrous for Boeing. Being last to market can crucify sales of an airliner, as airlines often tend to buy whatever everyone else does, providing there are no problems. This happened in the 70s with the Douglas D10 vs. Lockheed L1011. The latter plane was far superior, but Rolls Royce, the sole engine supplier, delayed the programme by a year by going bust. The end result was that the DC10 outsold the Tristar by 2 to 1; Lockheed only sold 250 planes out of the 500 needed to break even, and subsequently withdrew from the civil aircraft market.

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Ah, yes the 787, just found the Carbon designs are WRONG!

Their bonding process won't work!

They got cracks (Comet style).

As you say 2.5 years behind & the 1st fight delayed in-def..............

With the coming Collaspe of America you got to wonder if this plane will ever fly?

Mike

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this is what is so worrying about Mandy- sometimes he does the right thing- or maybe just does the "Which side is Mandy's bread best buttered" thing

The simple fact is that Mandy has far far superior interpersonal and communicative skills than the PM has - and it has been necessary for him to be de facto PM. :ph34r:

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Ah, yes the 787, just found the Carbon designs are WRONG!

Their bonding process won't work!

They got cracks (Comet style).

As you say 2.5 years behind & the 1st fight delayed in-def..............

With the coming Collaspe of America you got to wonder if this plane will ever fly?

Mike

Wot you mean we can't just out-source fuselage work to Naples without hand-in-hand QC?

Eedjits.

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