Boeing Versus Airbus: Episode 1,000,000

The World Trade Organization has just overturned a July ruling that stated European governments had given EADS unlawful subsidies that helped Airbus steal market share from the Boeing Company. The original number was $20 Billion, but that has been reduced to $18 Billion. The European Economic Community now has six months to create new policies to ensure this does not happen again.

Boeing has also been convicted of receiving subsidies from the US government. That ruling is under review at this time. The question on the books now is what does this all mean. Now that it is a given that Europeans have paid Airbus subsidies, does Boeing push for repayment? If that happens then does Airbus push for Boeing to pay it the amount in subsidies Boeing received? Europe must comply and we will see how they intend to fall in line.

With all of this said, and now that both companies have been exposed for their attempts to get an advantage over the other, maybe we can finally get down to business. Boeing has been whining for years about the unfair subsidies that Airbus had received. In fact, the attitude at Boeing evolved from disbelief, Airbus will never be able to sell their product and then deliver them, to rage when they were able to sell their family of airplanes and deliver at lower prices than they could.

A Boeing executive told me a few years ago that it was now time to stop whining about subsidial advantage, and recognize that Airbus is a formidable competitor. Maybe now they can get beyond the whining and get down to business and compete. I cannot believe that Jim McNerney is sitting at a bar somewhere having a beer and crying about the glory days when they beat the daylights out of McDonnell-Douglas. Nope, Boeing is a better company than that, and I hope they prove it.

And that is my thought for the day!


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