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WTO ruling doesn't worry Boeing

disclaimer: image is for illustration purposes only
by Staff Writers
Paris (UPI) Sep 16, 2010
Boeing Chief Executive Officer James McNerney said he was heartened by a World Trade Organization ruling against airplane subsidies, saying the findings against his company seem to be not as harsh as the ones against European competitor Airbus.

"What we have heard -- indirectly, of course -- is fairly heartening in terms of the proportionality of things that were found in the case against the U.S. when compared to the case against Europe," McNerney was quoted as saying Tuesday by The Wall Street Journal after a meeting in the White House.

The ruling hasn't been released yet, and it likely won't for several more months, but European officials have issued statements unveiling what they said were some of the ruling's key findings.

The WTO panel in the ruling "condemns the massive subsidies" issued by the U.S. government and "received by Boeing, which violate WTO rules," French Transport Minister Dominique Bussereau said in a statement. The European Union previously claimed that Boeing received more than $20 billion in illegal subsidies and officials in Brussels said the ruling backs up that claim.

The WTO in June released a ruling claiming that Airbus received billions on government-issued, low-interest loans and research grants to develop planes such as the giant A380 jumbo, a decision Brussels has appealed.

The new ruling, Bussereau said, swings the pendulum back and "brings enormous satisfaction to the French and European aviation industry and saves jobs and the future of this industry."

Boeing and Airbus have been locked in a years-long court war that observers say might end with a settlement.

The companies are fierce competitors in defense markets, including in the United States where Boeing and European Aeronautic Defense and Space Co., the parent of Airbus, are trying to win a $35 billion contract to outfit the U.S. Air Force with 179 in-flight refueling tankers.

The Air Force has been eager to replace its Eisenhower-era tankers and is to announce a bid winner this fall.

The Europeans are throwing their KC-45 tanker, a large plane based on the Airbus A330, into the race. Boeing is bidding with an altered version of its 767, called New Generation Tanker.

The Generation Tanker is slightly smaller and probably cheaper than the KC-45; the European plane has logged more flight testing hours and is closer to serial production, experts say.

Both companies have argued that winning the contract would create and support thousands of U.S. jobs.

The KC-45 won the contract in February 2008 but the decision was overturned four months later by the Government Accountability Office after Boeing challenged it. The GAO said it found problems with the bidding and the contract is up for grabs.



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