Marathon Pundit: Boeing tanker bid will mean more American jobs

Monday, June 21, 2010

Boeing tanker bid will mean more American jobs

For the last few months I've been writing about the unfair business practices of EADS, the parent of Airbus, which is competing with Boeing for the contract to build the Air Force's next-generation of mid-air refueling jets--the KC-X. Boeing has a significant manufacturing presence in Washington state and Kansas, its corporate headquarters are in Chicago. But did you know that 14,000 Michigan jobs, through its suppliers, are linked to Boeing?

The Detroit News does:

With 14,000 Michigan jobs at stake, a widely expected World Trade Organization ruling that European government subsidies to Airbus have unfairly harmed Boeing, the airplane manufacturer, is of direct importance to Michigan residents.

The World Trade Organization is a voluntary organization whose members agree to abide by a set of rules governing international trade. After four years of hearings and deliberations, Boeing and U.S. government officials anticipate that a ruling by the Geneva-based WTO, to be released June 30, will find that France, Britain, Germany and Spain have provided $200 billion in illegal subsidies to the European firm Airbus, which competes with Boeing in providing jet aircraft to airlines around the world.

One of the key issues in the case is what U.S. negotiators have termed "launch aid" for Airbus products. This consists of low-cost government loans for producing products that do not have to be repaid if the products are not a commercial success.

Because of this, Airbus is able to undercut Boeing prices as they compete to sell jet airliners. Spokesmen for Boeing have said that between 1999 and 2004, Boeing's direct employment declined from 115,000 to 55,000, while its market share tumbled to 48 percent from 67 percent. Company officials acknowledge that the employment decline can be attributed in part to the slowdown in air traffic following the Sept. 11 terrorist atrocities, but blame the market share decline on the subsidies for the European jet manufacturer.