CHICAGO – Boeing Co. CEO Harry Stonecipher stepped up his attack on subsidies for Airbus on the eve of a U.S.-European Union trade meeting, calling on European governments Wednesday to stop giving its rival “truckloads” of cash for new airplane programs.
Stonecipher pressed his company’s case in separate remarks on both sides of the Atlantic as EU and U.S. negotiators prepared to meet today in Brussels to review a 1992 aviation accord.
“Airbus is a mature, profitable company. It no longer needs launch aid to compete,” he said in an op-ed piece published in the Financial Times of London. “It is time for launch aid to end.”
The Boeing chief reiterated that point to analysts in Phoenix, opposing what he called the “front-end truckloads of money” given to Airbus Industrie, based in Toulouse, France. The Chicago-based company says those subsidies add up to $35 billion over 12 years.
“We’re saying enough is enough,” he said at a conference hosted by Morgan Stanley when asked about Airbus and the trade issue. “You’re very successful, you’re delivering and selling more airplanes than Boeing. … Why don’t you go to the bank and borrow money? Why do you need launch aid?”
The outspoken Stonecipher has been on the offensive against the subsidies since taking the U.S. aerospace giant’s top job last December. U.S. Trade Representative Robert Zoellick also is on the record against new subsidies, raising Boeing’s hopes that the two sides might at least reduce them. The subsidies currently amount to a third of production costs for new Airbus models.
For its part, Airbus contends that Boeing’s multibillion-dollar defense contracts, tax incentives and other perks amount to huge subsidies. The European Union said this week it will accept Airbus subsidy cuts only if Washington, D.C., reduces aid for Boeing.
On another issue, Stonecipher said Boeing is being more cautious than its chief competitor concerning the emerging recovery in the commercial airplane business.
“We don’t see it (a recovery) as robust as Airbus does,” he said. “Time will tell. But if we are wrong, we will accelerate” production.
Also Wednesday, Boeing forecast that world air cargo growth will expand at an average rate of 6.2 percent over the next 20 years, with traffic tripling from current levels.
Boeing shares closed down 26 cents at $53.66 on the New York Stock Exchange.
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