Hoisted on own petard?

Update, May 19: With all the references in Comments about the GAO ruling, we are linking the 150+ page report here, courtesy of Sgt. Mac: GAO KC-X 2008 Protest

Update, May 17, 4:30PM PDT: Reuters has this story that Boeing will bid for the tanker “despite concerns.”

Original Post:

We had been planning to write a column about whether Boeing may be in danger of being hoisted on its own petard when two news items appeared Friday (May 14) that accelerated this column.

The first appeared in Army Times/Defense News (sister publications), quoting an unidentified Boeing executive as saying Boeing might night bid on the KC-X because officials feared it could not win the contest because EADS would be able to undercut the price due to subsidies at Airbus. (This also would explain the question we raised in our post, Why aren’t they talking about the airplane?)

The second story appeared in The Seattle Post-Intelligencer refuting the Defense News piece.

Whether the Defense News story is true or not, and Boeing’s Bill Barksdale says the angle about potentially not bidding isn’t true, the rest of the News story touches on what we were planning to discuss.

As part of the preparation for this column, we wanted to find the origin of the phrase, “hoisted on your own petard.” When we went to Wikiedia, we were more than struck by the irony: the phrase’s original is—French.

Here is an excerpt from Wikipedia:

A petard was a small bomb used to blow up gates and walls when breaching fortifications. The term has a French origin and dates back to the sixteenth century. In a typical implementation, it was commonly either a conical or rectangular metal object containing 5 or 6 pounds of gunpowder, activated with a slow match used as a fuse.

The word petard comes from the Middle French peter, to break wind, from pet expulsion of intestinal gas, from Latin peditum, from neuter of peditus, past participle of pedere, to break wind; akin to Greek bdein to break wind. (Merriam-Webster) Petard remains a French word meaning a firecracker today (in French slang, it means a handgun, or a joint).

The word remains in modern usage in the phrase hoist with one’s own petard, which means “to be harmed by one’s own plan to harm someone else” or “to fall into one’s own trap”, literally implying that one could be lifted up (hoist, or blown upward) by one’s own bomb.

So how might Boeing be in danger of being hoisted on its own petard?

Boeing and its supporters pushed the Pentagon very hard to have this round of KC-X competition be a best-price competition, while Northrop Grumman wanted a best-value contest.

Both sides believed that if the Pentagon chose a best-price competition, Boeing would have the advantage by offering a smaller airplane that had lower life cycle and lower infrastructure costs (operating costs and Military Construction, or MilCon, costs respectively) and that the extra capabilities of the larger Northrop KC-45 would not count.

The Pentagon’s February Request for Proposal was characterized as a best value RFP by officials, but as Northrop, EADS, Boeing and analysts read the document, it was clear that best price prevailed. The Pentagon made it clear that whoever presented the best price would win if the bid met all 372 technical requirements. Only if the bids came within 1% of each other, including analysis of the life cycle and MilCon costs, would credit be awarded for exceeding the minimum technical requirements.

Boeing asserts its KC-767 has at least a 24% advantage on life cycle costs. Northrop and EADS disputed this figure, but nonetheless were concerned that without initial consideration for the KC-45’s extra capabilities beyond the KC-767 (which are what won Northrop the bid in Round 2, later overturned by the GAO on procedural grounds), the KC-45’s goose was cooked. The additional MilCon costs are figures we have not seen.

Northrop also had concerns about the fixed price nature of the contract, as did Boeing. Northrop withdrew from the contest in April, citing the fixed price provision and the widely-held conclusion that the RFP favored the smaller KC-767.

EADS later decided to make a bid on its own, citing several reasons: it believes it has the best airplane and should go ahead and bid; it has hundreds of millions in sunk costs into the project from the Round 2 bid; the KC-330 Multi Role Tanker Transport on which the KC-45 is a derivative is more mature than it was in 2007 and is about to be delivered to the launch customer, the Australian air force; it is now in production, with the UK’s model now rolled out as well; the Air Force certified EADS as a “qualified” prime contractor, eliminating the need for a lead US company that was necessary with the Northrop relationship; and the Pentagon asked EADS to bid to provide competition for the contract.

Although Boeing’s commercial 767-200ER on which its KC-767 offering is based is some $60m less in list price than the Airbus A330-200 on which the KC-45 is based, Northrop came in lower than Boeing in the Round 2 pricing ($184m vs $200m) largely because the USAF added $5bn to the Boeing cost factor due to risk vs. adding $700m to Northrop. The same risk factor assessment is absent from this Round 3 bidding, which means the USAF’s adding of risk-factor money may not be a significant factor as it was in Round 2.

Boeing’s supporters believe that adding the WTO costs of the illegal Airbus subsidies back into the equation, as discussed in the Defense News article, means an additional $5m to each KC-45. (We don’t know how this figure is derived; $5bn, the amount Boeing and its supporters allege was the illegal subsidy to the A330, divided by 179 airplanes is $28m per airplane according to our calculator.)

But we do note the $5bn figure alleged on the A330 is the same amount the USAF added to the KC-767 cost in Round 2. Flip this figure and it is a swing of $10bn.

EADS is less concerned about the fixed cost provision of the RFP than was Northrop. EADS officials point out that Airbus has been doing fixed priced contracts for decades, competing against Boeing in doing so. Although the same certainly can be said for Boeing-its commercial division has likewise been competing against Airbus with fixed price contracts-the KC-45 is in production and EADS now knows the development costs. Boeing’s KC-767 NewGen is a conceptual airplane. It is not in production and it is a derivative of the troubled Italian KC-767, which is five years late and still undelivered. Developmental costs of the KC-767NG may be much more a crap shoot than EADS believes its costs are for the KC-45, raising more concern for Boeing as outlined in the Defense News piece.

With the withdrawal of Northrop from the KC-45 program, the profit margin associated with Northrop now is out of the financial equation. This enables EADS to offer a lower price. No one will tell us what the Northrop profit margin was other than to say it was “significant.”

EADS also denies that it will low-ball any bid because it can’t afford to. Cost overruns on the A400M and A380 programs, deferred cash flows on the A380 production delays which we estimate to be in the billions of dollars, customer penalties associated with the A380 delays, and R&D funding for the A350 and the A320 re-engine combine to mean that EADS doesn’t have the financial where-with-all to low-ball bids, officials say. EADS also wants to acquire US companies to increase its US footprint.

In addition to Boeing’s belief that the A330 subsidies need to be calculated are aggravated by the elimination of the Northrop profit margin and the development uncertainties of the KC-767NG.

So Boeing is worried that EADS could actually submit the best price, which according to the terms of the RFP–and what Boeing and its supporters lobbied for–EADS would win the contract.

As we noted in our other post, Playing with Fire, you need to be careful what you ask for.

So what’s going on with the conflicting reports out of Boeing?

One observer indirectly associated with Boeing and supporting the KC-767 bid hypothesizes this may be an effort to stir the pot in connection with the bills introduced this week in Congress to force the Pentagon to consider the WTO subsidies. As we previously noted, we think this is playing with fire. Although Boeing believes that any WTO ruling against it with respect to the European complaint about illegal subsidies provided Boeing, this is a big gamble. What if the bet is wrong?

The twists and turns continue in this controversial procurement.

62 Comments on “Hoisted on own petard?

  1. If you can’t trace it back to the Great Greeks
    you can usually trace it back to Shakespeare:
    [ If a petard were to detonate prematurely due to a faulty or short slow match, the engineer would be lifted or “hoist” by the explosion. William Shakespeare used the now proverbial phrase “hoist with his own petard” in Hamlet.]

  2. A330 subsidy:

    Is 5b$ alleged subsidy distributed over
    ~1000 A330 on order/produced resulting
    in about 5m$ subsidy per airframe.
    a better fit? ( correct math for once! )

    • Thanks for this clarification.

      But in that case, the subsidy should to amortized over the life of the program–and how many more A330s/A340s will be sold before production ends? Nobody knows; how would the Air Force estimate this?

      • As i understand the terms of ‘ launch aid ” agreements in 92/94 , the payback period was to be something like 17 years or so, dependent on meeting ‘ sales’ targets laid out early in a program. There is no doubt the system was gamed, since if targets could not be reached in the time period(s), then the loans would be forgiven. The A380 comes to mind.

        Remember, EADS/Airbus is about JOBS JOBS JOBS and national pride.

        And the claims of ‘payback’ are about as transparent as current administration numbers on healthcare issues or the payback By General motors of tarp funds ( by using other government loans )

        Add to that that EU accounting standards are vastly different than U.S, especially regarding ‘ profits’ and VAT issues.

      • per A330 subsidy:

        Only trying to find a relation that matches up slightly better
        than the original one.
        I could think of a couple of other arrangements.

    • Of course, the way this tanker competition has evolved, it is all about American JOBS, JOBS, JOBS now. The warfighter has become, “What warfighter?”

      • Are there any other major defense programs that are not tied directly into domestic jobs, either here or in Europe? You think the A400M program is going ahead because of the needs of “the warfighter” without regard to the European defense industrial base or the desire to support a very important European manufacturer?

        This is the nature of things. It has always been like this.

      • Except that early in Round 2, Boeing and its supporters–later bootlegged by Northrop and its supporters–talked about the warfighter. Since about the middle of Round 2, the warfighter has disappeared and the argument has been about jobs (then 44,000 for Boeing, 48,000 for Northrop and moving targets ever since, which is why we totally ignore what either side claims anymore) and the Airbus subsidies.

        The warfighter and the KC-767’s attributes have gotten lost in the assertions by Boeing supporters about why Northrop/EADS/Airbus should NOT be allowed to compete (or penalized, totally ignoring WTO rules against self-help) vs. why the KC-767 might be the better airplane; and who produces more jobs. Where is the warfighter? He’s disappeared (or her, to be non-sexist).

        Why is the KC-767 the “better” airplane? The bloggers talk about this more than Boeing and certainly more than the politicians supporting Boeing.

        Why is the KC-45 the better airplane? Don’t ask Richard Shelby. He’d rather hold hostage 45 Obama appointments than talk about this. Don’t ask Jeff Sessions or Joe Bonner. They are all about Alabama jobs and forget the merits of the competition.

        The whole thing is disgusting.

  3. Hmmm- maybe my tongue in cheek prediction about BA once again snatching defeat from the jaws of victory was not so far out ?????

    A bit of history- some of which has been previously posted on another thread months ago . . .

    From 1995 ( approx) to 2004, BA basically opposed or ignored the subsidy issue due to worries about losing overseas sales- which were running about 50 to 65 percent of total BA sales.

    But in 2001, July, BA hired one Rudy de leon , and assigned him to look closely at the issue. Finally, in early 2002- BA through the back door- squelched the then imminent filing by SPEEA ( union) of a countervailing duties petition (CVD)- this at the same time they were sandbagging the then tanker lease program started in the aftermath of 911. At that time there was NO- repeat NO connection between tankers and WTO issues, since WTO specifically excludes military. (How to handle commercial planes ** in quantity **converted to military is still a conundrum ) .

    Below is the basic summary as of August 2001 regarding CVD. I was responsible for most of the numerical analysis and a lot of the research. AT that time, the ( senator ) Byrd amendment passed about a year earlier would have resulted in the duties imposed being credited to the group/company/organization making the filing. At the very highest levels in the then U.S> administration, a figure of 10 to 15 percent of ‘ sales price ” was being seriously discussed , awaiting only for someone to file.

    HERE WE GO AGAIN !

    Airbus Countervailing Duty Position Paper [ AUG 2001 ]

    For the past year, the SPEEA Legislative and Public Affairs Committee (L&PA) has been conducting an intensive investigation into the practices of Airbus Industries; namely, the subsidies being provided by EU governments, and the below fair market prices at which they sell their commercial airplanes. SPEEA is concerned because these practices have had a severe impact on the jobs of commercial aerospace workers and the people we represent.

    The L&PA Committee has concluded filling out a very detailed petition requesting relief under U.S. countervailing duty law. The SPEEA Council authorized this investigation, with the goal being to determine whether such a filing could be reasonably supported by examination of publicly-available information from both Boeing and Airbus. Once this petition is filed, the International Trade Administration (ITA) within the Department of Commerce and United States International Trade Commission (USITC) will be able to consider the initiation of a countervailing duty proceeding. Such a proceeding is administrative in nature, and may result in the imposition of special countervailing duties on specific imports.

    In order to fill out the petition, the Committee gathered data from various sources, including: Boeing Annual Reports; the first European Aeronautic Defence and Space Company (EADS) (formerly France’s Aerospatiale Mantra, Germany’s DASA, Spain’s CASA, and Britain’s BAE Systems) Annual Report for 1999/2000; statistical surveys conducted by the European Aerospace Industry (EAI) for 1997 – 1999; information from both Boeing’s and Airbus’ websites; numerous press accounts; and informal discussions with industry representatives.

    The Boeing Company has neither helped nor hindered us [ ** 6 months later, BA stifled the filing which was deferred due to 911 issues a few2 weeks after this was published on my website- which was up until early this year but removed due to change in ISP ***], nor have we had access to any Boeing proprietary data. As SPEEA represents workers within the industry, and not the industry itself, actual sales prices, contract information, profit margins, discounts, and lease information are closely held by the respective companies and were not available to us; however, these can be requested by the ITA and ITC.
    The L&PA Committee has made the following observations which lead to our belief that Airbus, through a variety of methods, is effectively selling their products below cost. Raw material, engines, avionics, landing gear, and similar parts cost the same for Boeing and Airbus. Assembly techniques, automation, certification, process controls, and computer-aided design techniques are essentially the same, and have no inherent cost differences.

    Additionally, labor costs are higher for EU countries, with differences from 15% higher in 1995 to about 5% in 1998. Finally, the EADS annual report shows that for the year 2000, Airbus’ share of EADS net consolidated profit was zero.
    We then compared the published selling prices of Boeing and Airbus commercial airplanes from 1998 – 2000, omitting figures for the Boeing 747. For 1999, the average cost of all airplanes sold by Boeing was $59 million per plane, whereas the average cost for Airbus was $46.4 million per plane. We then compared two comparable models of aircraft, the A320 and the 737-800. Figures reflected an average 737-800 costing (conservatively) about 10% more than the A320.
    Therefore, how can Airbus, with equal material and subassembly costs, higher labor costs and arguably lower productivity, and admittedly zero profits, still undercut Boeing prices by at least 10 percent? Our determination is that Airbus is selling most, if not all aircraft models into the U.S. at 10 (to) 25% below cost. Note: this does not include special lease, financial, or maintenance agreements, which even further harm our workers.
    In conclusion, the overall affect of the governmental subsidization of Airbus has caused distortions in international trade that support United States governmental action. Therefore, the SPEEA L&PA Committee is recommending the SPEEA Council and Executive Board take action to file the petition for countervailing duty relief with the United States Department of Commerce and International Trade Commission.

    Note: On Aug 9, 2001, The SPEEA Council passed the accompanying motion.

    *** NOTE THE ACTUAL FILING WAS SCHEDULED FOR THE WEEK OF 911- BUT DELAYED ***

    AND LATER STIFLED BY BOEING

    • “AND LATER STIFLED BY BOEING”

      Interesting.
      Sanity prevailed.

  4. “… with equal material and subassembly costs, higher labor costs and arguably lower productivity …”

    What about one or more or even all of those
    assumptions being wrong?

    In earlier times people denied the reality of
    things not mentioned in the bible and created
    elaborate explanations to explain what could
    not be.

    my friend Occam asks to greet you 😉

    • Wait Uve, are you saying that labor cost/ are the same for European and American workers? And Productivity is equal?

      Uve, I must admit that you have made me chuckle before, but this time I’m a bit stunned. Please, elaborate on which “assumptions” you believe to be wrong?

      • Surely UVE can find some current data compareable to that which I put together a decade ago, using AECMA stats available at that time

        regarding productivity, I will direct you to pages 6 thru 8

        of the pdf file ( 2001 version ) at

        http://dl.dropbox.com/u/3827206/CVDanalysisRDXm.pdf

        Note that I used AECMA figures and definitions of productivity and labor

        Of course few american aerospace workers get 4 weeks of vacation and bucu holidays per year ( 4 weeks may be available after about 20 years )

        and a 40 hour week is standard compared to about 36 hours week in france for example

        Mon dieu !!!

      • No idea, ( and I have no interest to delve into “bible interpretation”.).

        What I pointed out is that Don elaborately builds on
        the equivalent of an earth centric universal model
        where he has to jump through elaborate hoops to
        explain certain planet movements while all this
        is easily solved with a heliocentric model.

        He extrapolates from his own society to explain
        the workings of another society. He can’t be bothered
        to accept that his basic assumption seems to be faulty.
        Thus every “fact” he builds on this wrong assumption
        is tainted to unuseability.
        He can’t even accept that other people may actually
        mean what they say. If it doesn’t fit his prejudices they
        certainly must lie.
        US business in my experience is a lot more about
        redistribution than being effectively productive.
        Too much backstabbing, too much lying, too
        carnivorous.

    • Uwe,

      As the party to these ongoing conversations who regularly insists that it is absurd that systematic and prolonged government intervention on behalf of his side in a commercial competition has had any distorting effect, I would suggest that you not be too confident of Occam’s friendship.

      • “Occam’s friendship.”
        Hehe, good one.

        Not all is rosy (or likable) in the EU.

        RLI is an investment by the community designed
        as a containment against the absolute urge
        towards shorttime profits.
        The greed driven market is a market of redistribution
        and regularly not the productive creation of value.

        By my judgement the US markets have to an increasing
        degree over time been nonproductive and redistributive
        in a nonobvious way. ( external wealth into the US,
        borrowed money, fraud ) the last large coup having been
        the credit default swaps product sold to the outside world.

        Material production seem to regularly be less profitable than
        distribution. Capital flow management is even more profitable.

        Put all together the US idea of “free” markets is unaceptable.
        as it allows to further canibalise the productive elements.

      • Uwe,

        I agree to some extent with much of what you say, including measures of both distress at the sometimes craven actions of Boeing and the US defense establishment, and admiration of the seemingly genuine community spirit of Airbus; however, what may seem benign within the community this effort serves, is poisonous and, I believe, debasing in the U.S. economy that is the the recipient of the unrelenting attack. A proud and productive part of US economy is being destroyed by your community’s far-sighted project.

        I also believe there is ample evidence that the impossible competitive environment created by the risk-less competition of Airbus, has driven Boeing which was a proud, scrupulous, commercially-focused, and engineer-led company, relentlessly into the control of industry-agnostic MBAs who have gutted the company while pursuing the safer waters of cost-plus defense services projects, and a nebulous integrator role on the commercial side.

        Much is made in defense of RLI, of the subsidies that the 787 received from Japan, but what benefit is that to Boeing, or especially to the US, or the members of the SPEEA? What are those subsidies but the sale of a major portion of the business to make manageable the costs and risks that a real commercial venture faces when launching a new jetliner.

        So I agree, that Airbus’s civic partnership looks like an enviable cooperation for Europe, but it cannot be mistaken for anything less than a disaster for the US, and the DoD will be making terrible mistake if they fail to take that reality into account.

  5. Uwe— AS previously posted many months ago, I’ll repeat the first page of the supporting analysis and where the data came from.

    While I did most- but not all of the data gathering and analysis, there were several others also involved. Including a good friend, since deceased ( in 2004) who was at the GATT92 meetings.

    This extract is intended to show some of the background information used for the
    Countervailing Duties petition in more detail than is necessary for filing.
    All prices and average cost data by model are based on publicly available information from
    Boeing and Airbus.
    Comparisons of productivity and labor rates are those done by AECMA, the EU equivalent of
    the AIA ( Aircraft Industries Association ) for example :
    http://www.aecma.org/
    http://www.aecma.org/meta_stats.htm
    http://www.aecma.org/Stats/Stat1999.pdf
    http://www.aecma.org/Stats/Stat1998.pdf
    http://www.aecma.org/Stats/Stat1997.pdf
    OTHER INFORMATION SOURCES INCLUDE :
    http://www.finance.eads.net/erappo.html
    http://www.speednews.com/
    http://www2.airbus.com/home.asp
    http://www.boeing.com/commercial/prices/index.html
    Yearly and Total averages are weighted by delivered quantities of equivalent models
    Equivalent model comparisons between Boeing and Airbus are based on a Boeing News
    article published June 14 -21 -2001.
    Models 747 and 757 deliveries were excluded from all comparisons, since there are no ‘
    equivalent’ Airbus models. In some cases, certain models have also been excluded for the
    same reasons.
    ” 40 Percent of Airbus made in U.S.”
    http://www2.airbus.com/media/media.asp July 2001
    “ . . . . Today Airbus spends more than $5 billion annually with American suppliers to its wide
    range of aircraft models. Up to 40 percent of an Airbus aircraft is made of components
    produced by several hundred American companies, McArtor said.“ [ Allan McArtor is Chairman
    of Airbus North America.

    NOTE AGAIN- THIS WAS DATA AS OF 2000 – 2001 AND THIS WAS THE SUMMARY COVER PAGE OF ABOUT 12 PAGES OF COMPARISIONS AND GRAPHS AND MULTIVARIATE ANALYSIS

    As to my friends credentials

    http://www.fas.org/news/taiwan/1992/s920311-taiwan.htm

    THE MCDONNELL DOUGLAS-TAIWAN AEROSPACE DEAL (Senate – March 11, 1992)

    [Page: S3346]

    . . . Mr. President, I ask to place the testimony of Mr. Daniel Hartley, president of the Seattle Professional Engineering Employees Association, and Larry Clarkson, vice president of the Boeing Co. that they delivered to the Joint Economic Committee last week in the Record at this point.

    The testimony follows:

    Statement of Mr. Daniel B. Hartley . . .

    ++++

    • Don, you are holding up as neutral testimony
      the targeted communications of an involved party.
      A Value Added fairy Tale 😉

      And as mentioned elsehwere even Boeing has
      seen enough light to refrain from using
      such analysis.

  6. Another very good term largely used in common French idiom would be /

    “Pétard mouillé” !
    Wet Petard in English!

    Somewhat closer to the story !

    Béochien

  7. To: don on May 15, 2010 at 12:48 pm

    “Add to that that EU accounting standards are vastly different than U.S, especially regarding ‘ profits’ and VAT issues.”

    EU accounting standars tend to be a lot
    more conservative in asset valuation.
    This tends to paint reports made under the
    US framework quite a bit rosier than
    the same “facts” reported under EU bookkeeping
    rules.
    http://de.wikipedia.org/wiki/Vorsichtsprinzip
    ( use the fish )

    Unfortunately in direct competitive contact
    this rosy picture does not prevail.

  8. poor UWE- perhaps he doesn’t notice dates

    1992 BA was concerned about MDC and Taiwan as shown above, and also noted the Airbust subsidy issue

    2000 2001 and ( my ) analysis using AECMA data he choses to ignore- and still hasn’t answered the earlier question relative to productivity- or provided any factual or credible data in support of his comments

    Of course in 2004 or so Boeing DID file re the subsidy issue AND WTO DID ( finally) rule against EADS-Airbust. AS in the old cliche- we’ve already determined what you are – just haven’t settled on the price . . .

    So instead of the platitudes , why not come up with a few facts on your side.

    How about the productivity figures for the last 5 years of the EU aerospace industry as determined and published by AECMA ? How about the wonderful mess of the A400M ? and the resounding financial success of the A380 ?

    I’m sure the readers will be waiting … and waiting … and waiting . . .

    • you want to bandy facts, get yours right:
      Boeing never did and cannot file at the WTO
      As I hear, the RLI/LA mechanism as agreed between US/EU was found legal and not distorting competition. The WTO has found some or all of the terms of the specific contracts as unacceptable.

      How about those productivity figures… in fact, across all industries EU productivity is significantly lower than the US counterpart. Still, there’s steel mills, car companies, ship builders, and aerospace companies in the EU competing with US counterparts. As you also mention, Labor costs in the EU are also higher… Your premise is that this inherent disadvantage is absolved by unacceptable subsidies, but… do you think it’s likely that all industries in the EU are subsidized so, then where does the money come from? If not, how are those other industries able to survive against their US rivals?
      The rainbow may touch-down in Ireland, But they are actually get more money from the EU than they pay.
      So either the EU somehow magically subsidizes it’s complete economy, or the statistics do not show the complete and or correct picture.
      Occam vote’s the last I think.

      How about the wonderful mess of the [B787] ? and the resounding financial success of the [B748] ?

  9. Yo ikemann . . .

    rather than splitting hairs as to who can file what, why dont you stick to a few easily found facts ?

    http://trade.ec.europa.eu/doclib/docs/2004/october/tradoc_119610.pdf

    is essentially the filing of the U.S against/ to/ through the WTO agreements.

    And as you would seem to infer- Boeing did not file ? Riiiight ……

    While technically, Boeing (BA) did not file, one can be sure they pushed the right buttons.

    However, BA could have filed a Countervailing duties petition at almost any time since 1994-95, which would have had similar effects.

    I find it interesting to note on the filing/complaint linked above the following on page 4

    . .Statement of Available Evidence
    AECMA, Statistical Survey (1998), Statistical Survey (1999), Facts and Figures (1999), Facts and
    Figures (2000), Facts and Figures (2001), and Facts and Figures (2002). . .

    Gosh oh gee ! They ( U.S Government ) seem to have used most of the same facts and figures I used and referenced- from the same organization ( AECMA) !!!

    as to CVD – here is but one example

    . . .The ‘ affected domestic producer ‘ definitions found for example in [[Page
    33920]]DEPARTMENT OF THE TREASURY Customs Service 19 CFR PART 159 RIN 1515-AC84
    Distribution of Continued Dumping and Subsidy Offset to Affected Domestic Producers AGENCY: U.S.
    Customs Service, Department of the Treasury.
    Affected Domestic Producers
    ” An affected domestic producer eligible for a distribution of countervailing or antidumping
    duties assessed under an order or finding would include any manufacturer, producer, farmer, rancher or worker
    representative (including any association of such persons) that remained in
    operation, and that was a petitioner or an interested party that supported a petition
    for the issuance of an antidumping duty order, a finding under the Antidumping Act of
    1921, or a countervailing duty order. . .

    +++

    There is a interesting conundrum with the wording which comes from what calculation evolves when there is but ONE LCA producer in the industry.

    When I queried the General Counsels office of the ITA about 7 years ago on this issue, here is what I wrote as to the response ..

    . . .Those numbers relate only to the INDUSTRY – NOT TO THE NUMBER OF EMPLOYEES
    OR WORKERS – e.g if 10 steel companies in domestic production. the total number of producers is
    in the denominator. = /10
    Now if say 3 companies file, and they represent say 40 percent of the domestic production [
    sales/deliveries ] , then the numerator would be 4 and the result would be 40 percent. If all companies
    had equal shares e.g 10 percent each , then the 3 companies would have 30 percent… Neutral companies
    drop out of the calculation .
    Note the math breaks down when there is only ONE producer which makes 100 percent of
    the domestic production. The legislation was not drafted to cover the special case of a sole producer .
    e.g Boeing ..

    IM still waiting for a response from UWE as to how productivity and EU ‘ costs ‘ as documented are sufficiently lower than the U.S WITHOUT bucu subsidies.

    So much so that EADS can undercut BA sufficiently to cover fuel usage and size issues while using credible data ?

    And it would be helpful if he or she could support the initial comment that claimed my data and conclusions were not supportable ??

    as in . . . He extrapolates from his own society to explain
    the workings of another society. He can’t be bothered
    to accept that his basic assumption seems to be faulty.
    Thus every “fact” he builds on this wrong assumption
    is tainted to unuseability. . .

    • reading only what you want to read, and knowing only what you read:

      paragraph 1:
      The following communication, dated 6 October 2004, from the delegation of the United States to the delegations of the European Communities, France, Germany, Spain and the United Kingdom, and to the Chairperson of the Dispute Settlement Body, is circulated in accordance with Article 4.4 of the DSU.
      And of course the US filed in support of Boeing. But when you call on another commenter for not coming up with facts it’s the least you can do is have yours straight.

      The document lists a total of 10 pages of available evidence. it includes Wall Street Journal, The Economist, The Guardian, The New York Times and Bundestag articles and many gov’t and court docs from the defendants.
      What you most definitely will not find in that extended list is any reference that might be construed as supporting the defending stance.

      interesting response: “The legislation was not drafted to cover the special case of a sole producer. e.g Boeing ..”
      So you’re basing your claim on regulations that were explicitly not intended to cover your specific case… I know you’ve got further evidence to support your claims, but apparently there’s evidence supporting Boeings position too.

      I’m still waiting for an explanation of how any EU business can make any money without bucu subsidies

      I don’t think we’re trying to say your facts are wrong, though we do disagree with your conclusions. The problem is that you’re building an circular argument without any checks or balances. You’ve started with your desired result and than build a house of cards to support it, instead of looking at what the data is telling.
      In short, you’ve committed the gravest sin in the scientific method resulting in your earth centric universal model

      • “you’ve committed the gravest sin in the scientific method resulting in your earth centric universal model”

        WE don’t even understand this one!!!! 🙂

      • Ignoring all checks and balances, avoiding anything that may disproof your theory and basically elevating your hypothesis to gospel, so holy all facts not explicitly supporting must be condemned as false/fraud/vile

        hearing only what you want to hear and knowing only what you heard…

  10. PLEASE read the context of YOUR . . . . Interesting response: “The legislation was not drafted to cover the special case of a sole producer. e.g Boeing ..”
    So you’re basing your claim on regulations that were explicitly not intended to cover your specific case… I know you’ve got further evidence to support your claims, but apparently there’s evidence supporting Boeings position too.

    ++++

    I was specifically talking-describing the FACTS involving the ability of Boeing to file a CVD Countervailing duties petition – which is different than the filing re WTO. And as I said earlier, Boeing (BA) stifled the unions filing. The issue of math can/could have been easily resolved HAD EITHER BA OR SPEEA FILED.

    You still claim in some arcane manner that my ‘ earth centric ” view is somehow wrong or not supportable. Wouldn’t it therefore make sense for to explain why YOUR statements or views are NOT ” earth centric ” ??

    I think we can all agree that the Normans are/were NOT the center of the universe.

    As to my conclusions, please iterate YOUR view how IF mcartor was correct in saying 40 percent of Airbus is built in U.S, ( by part count or $$$ ?? ) that the remaining 60 percent being ‘made’ assembled in the EU/EADS sphere with higher labor and lower productivity costs could STILL undercut BA prices by 15 to 25 percent WITHOUT some form of subsidy BEYOND the initially allowable 33 percent ‘ launch’ aid which was supposedly paid back out of profits and/or royalties ?

    • No, I can’t/won’t. I do not have/ have not found any data to disproof your hypothesis. In fact, the WTO has probably put you in the right up to a certain point.
      EADS/Airbus and all previous incarnations enjoyed subsidies and government supports above and beyond what was agreed upon in the GATT OR those allowed under that agreement were found to be excessive by the WTO

      However. So did Boeing (no proof other than common sense, wait for the WTO) – so claiming Boeing was “hurt” by these subsidies cannot be upheld.
      As to how EADS/Ab can sell ‘m for less than Boeing:
      1) Lower profit margin
      2) Lower cost per product.

      Officials have time and again said Airbus is about market share above profit, and Boeing/US handed it to them. 50% each and we’re both happy clappy.
      Most current Boeing products already existed before the first hint of Airbus. It could be that though EU hours are more expensive, fewer may be necessary for building a product on an airbus 1980’s product line than a Boeing 1960’s product line.
      shipping assemblies might be cheaper than shipping parts.
      The fact that Boeing adopted Airbus’ distributed production line model for it’s 787 may indicate this is true.

      Boeing builds beautiful aircraft but 744 wings were still build from the spars up at Everett – not sure on the 748

  11. I think Mr. Barksdale said something that, for me, transcends RLA, FBW, and all the scientific back and forth from our always colorful Airbus cheerleaders on this forum… He stated that Boeing considers it an **honor** to replace its own aircraft in this third round of this seemingly never ending saga.

    To me that alone speaks volumes. I know it won’t for many of those same colorful characters here, but then again, it really the commercial angle seems to be the most important to these folks.

  12. Going back to the initial issue here regarding either the BA petard or current cliche ‘ foot bullet ‘ – I have previously posted in this forum many related issues.

    I believe its now been well established that for the initial tanker lease- BA had inflated the real costs in an “unreasonable” fashion. But it was at least a few years AFTER the stifling of the CVD petition before the facts became known. Until then the BA position re CVD was ‘ concern’ about foreign sales ( to EU countries ) .

    IMO the REAL concern was the awkward position BA would have been in had we filed. HAD we filed, BA would have had to provide verifiable ‘ cost data ‘ for models equivalent to Airbus models. And of course Airbus would have been obliged to do the same. IF Airbus refused, then, under the rules, the ITA could have made their own determination, and used that to set the amount of duty to be paid . .

    So Boeing would have been in the position of having two sets of basic airframe ‘ cost’ data in the hands of two different agencies, leading to a good chance that the differences between govt cost and commercial cost for the same basic airframe would have been noticeable and almost impossible to justify . Thus IMO, Boeing had no other choice AT that time but to stifle.

    Is/was my above OPINION supportable ? Well, when I presented it to Boeing ethics and the BOD , not only was the silence of interest, but the resultant eventual blocking of any further communications by myself on that and related issues is a matter of written record, as is their comment of ” no merit” .

    It will be interesting to see how close my(our) estimate of 10 to 15 percent SUBSIDY/DUTY per certain LCA is to the still unpublished WTO figures.

    • It will be interesting to see how close my(our) estimate of 10 to 15 percent SUBSIDY/DUTY per certain LCA is to the still unpublished WTO figures.

      • discontinuity, continued:
        Current information is that the WTO denied retaliatory measures to
        to the US due to no factual damages.
        My logic may be faulty, but if there is no damage there was no
        effective ( in competition ) subsidy.

  13. UWE … “Current information is that the WTO denied retaliatory measures to
    to the US due to no factual damages.”

    And your source is ???

    And it still does not address the issue of CVD duties which CAN be imposed …

    But again- please explain and support your previous diatribes regarding MY allegations/issues/ assumptions/ or whatever else of my comments you contend are wrong, inappropriate, or ???

  14. BTW- is wikipedia wrong re work weeks in EADS supporting countries like germany and france ?

    Several nations have imposed limits on working time in an effort to combat unemployment. The theory is that less work hours per a worker will create a demand for more workers, and give those that are already hired more leisure time. This has been done both on a national level, as in France’s 35-hour workweek, and on the company-union level, for example the agreement between Volkswagen and its union to temporarily reduce the workweek to 29 hours to preserve jobs. This policy is controversial among economists.

    I believe that has been the case in france since about 2000 or so ?

    How does that measure up to productivity as measured by AECMA as $$$ sales/employee?

    And lobor costs ?

    excuse me for bringing up a few facts in my ‘ earth centric ‘ world or universe

    • “And your source is ???”

      I am not your Paedagogus.

      “This policy is controversial among economists.”

      So what, “economists” are to a large extent
      voodoo nonscientists and have done enough
      damage. so who cares.
      Current economic models are driven superficially
      by neo-liberal ideas on the unerring forces of
      free markets.
      But if you scrape the surface you will see that
      the core purpose is to move assets at minimal
      valuation from the public hand into private hands.
      A thinly disguised ripoff.

      Afaiks effective productivity in the EU may be higher
      due to higher qualification and motivation ( jobsecurity,
      healthcare, recuperation time during hollydays ) in the
      workforce. No/few laywers. “Mittbestimmung” as practised
      here seems to be a lot more constructive than the union
      setup in the US.
      A civil society does have a lot more value than fast profits
      for select entities.

    • what’s the difference in US/EU aviation industry income?
      I know for a fact that an US engineer gets more money at the expense of fringe benefits…

  15. Very good analysis 😉

    I am still somewhat surprise that it took you so long to realize that by going alone EADS would be in a better position to match (on beat) Boeing’s price offer.

    It was for me obvious from the beginning, particularly when they mentioned the alternative partner (to NG).

    So, what’s up now about the Boeing offer (the plane I mean this time).

    Any good ?……

  16. Scott and Forum in General,

    Just a general comment on the last contest. The last contest was not in NG’s words a price shootout. It largely relied on 5 scoring areas of which cost was only one and Most Probable Lifecycle Costs or (MPLCC) was the primary metric. It was in the MPLCC metric that $5.2 billion in cost were applied to Boeing’s entry but $772 mil applied to NG/EADS. Individual airframe costs was not a major metric and efforts to calculate airframe costs were made from the MPLCC metric until NG came out and said our cost was $184 mil for the first 69 frames. The last contest was quite complicated and a former senior aquisition officer for the contest even went so far as to publically say we really had no idea of what metrics were important in the last contest and we lacked a plan for defining them properly.

    2008 Contest Metrics as follow:
    • Factor 1 – Mission Capability
    • Factor 2 – Risk
    • Factor 3 – Past Performance
    • Factor 4 – Cost
    • Factor 5 – Integrated Assessment

    Factor 1 was the equivalent of the mandatory mission requirements in today’s contest ann involved nearly 800 tradeable vs. the 373 mandatory and 93 non-mandatory in today’s contest. In the original contest Boeing came out on top in this assessment.

    Factor 2 was the program risk assessment both were rated as low risk overall. Boeing’s major complaint was that the DoD didn’t include the inherent risk in NG/EADS industrialization plan for the KC-30. Major cost, fuel burn, and performance adjustments were made for Factor 4 and Factor 5, not the program risk assesment. For the current contest this area is largely a wild card.

    Factor 3 was rated as equal for both competitor’s, Boeing had an issue with both competitor’s being rated equal given their 75 year history in the tanker business.

    Factor 4 was a decisive factor in the last contest. NG/EADS bid after adjustment was $108.01bn vs about $108.04bn or just ever so slightly below Boeing’s MPLCC. It was probably this area more than any other that Boeing cried fowl over. The MPLCC area covers the offer’s price, the fuel burn, and the MILCON adjustment or rather 3 of 4 primary cost rating areas in todays contest.

    Factor 5 – Integrated Assessment, The IFARA leaned pretty decisively towards NG/EADS in the last contest with an IFARA of 1.9 for the NG/EADS bid and 1.79 for the Boeing plane.

    In summary NG/EADS won based on the scores from Factor 4 – Cost or MPLCC and Factor 5 – IFARA. In the last contest the risk assesment played a pivitol role in the final numbers generated for the IFARA and the MPLCC, hence the huge focuse on what numbers are actually going to be used for this round.

    for a summary of the last contest you should go to:
    http://www.globalsecurity.org/military/systems/aircraft/kc-x-protest-4.htm

    • Geez. Wow. Citing a ‘Defense Policy’ expert’s (whose big ‘experience’ prior to the present gig was webmaster for the FAS) posting of the GAO’s opinion/ruling (like that is something we didn’t already know) on the DoD’s conclusions… instead of the DoD’s conclusions themselves. We are supposed to believe non-binding GAO auditor-hack politically-safe conclusions over the end-user’s evaluations because??????.
      Hmmmm. To what purpose? Perhaps to keep the whitewash fresh on recent history?
      With NG out of the picture I would be skeptical of any bid by EADS on technical grounds (don’t care for their design philosophies), but Boeing Commercial lost it’s soul when the money guys took over from the airplane guys. I’m still in awe of the Borg’s ability to ‘manage reality’ but their continuing subversion of the acquisition process just to maintain status quo as the only large commercial airframe maker in the US is still just as depressing.

      It would be hilarious if didn’t need a new tanker so badly, but alas….

      • SMSgt Mac if you read the post you’d see I didn’t cite a single GAO finding or opinion, so I have no idea what you are reading here. I merely cited Boeing’s positions on the previous contest and provided a link that is about the only link left on the net with any real informatioin on the last contest. The reason, I think this all relevent to the question of what is happening now with this contest. If you look at Boeing’s statements they were all that the USAF in the last round ignored or downplayed the strengths of the Boeing offering. If you look at this round, Boeing and their supporters in congress have attempted to tie the Air Force’s hands in the selection wherever possible. E.g. no tradeable allowances everything is mandadatory, spell out all the requirements and don’t have a formal risk assessment process like last time.

        Put in another way there is a major rift between the Air Force and many members of congress, mostly Boeing supporters, but the number is quite large. These congressmen simply don’t trust the Air Force to conduct the evaluation and are attempting to dictate how the contest should be conducted. I personally would like the DoD to conduct contests with much less scrutinty but none the less that is what is happening with all of the posturing going on. I have pointed out this a number of times before that it’s a mistake to read what is going on now as a traditional sales pitch. Neither side is doing it, right now the real action is in congress and trying to influence the USAF selection process.

        “the only large commercial airframe maker in the US is still just as depressing.”

        There are only two large commercial airframers in the world. Why should it be depressing that one of them happens to be located in the United States. I know this has been banted about for add infinitum, but this thing has a lot more to do with the dearth of military contracts than it does with the civilian airframe world, even if Airbus won this I don’t think having Airbus assemble more than a few commerical frames a year is not realistic, the Union in Toulouse is engaged in work stoppages right now over moving the A320 successor to Hamburg, they simply won’t tolorate moving a major portion of wide body production out of Toulouse to Mobile so my question is why does this fiction keep popping up? Mobile is kidding themselves if they think they’ll ever be assembling anything more than tankers and a few freighters. If anything Airbus’ offer of the assembly plant shows how series and how much they really want the military contract, not how much they want to assemble a couple of freighters in Mobile.

        Look, in the 1950s we had about 60 major aerospace contractors today in the US we are down to more like 6 and that number will shrink furuther as large contracts dry up. There isn’t enough work to support our dimensioned contractor base in addition to EADS. EADS on the other doesn’t have enough work in Europe to utilize all of their design and production capacity which is why the want into the US market so bad. The huge amount of overcapacity in both the US and Europe’s defense industries is the ultimate driver here not the commercial market. The issue of European participation in the US defense market will only get hotter in the future as both sides see their home markets continue to shrink. Expect the new Presidential Helicopter contest to be as ugly as this one.

      • John,Your’e right, I was wrong.
        First, I didn’t mean to ignore your response, I missed it while locking in on another.
        Second the link you provided was to one page of several. As it was written in the passive voice and regurgitated GAO opinions, and after a quick check of the other pages, also regurgitating the GAO report and associated blather I had read too many times previously, I leapt to the wrong conclusion. I hereby correct and revise my opening statement to read (changes in [brackets]:
        …Citing a ‘Defense Policy’ expert’s (whose big ‘experience’ prior to the present gig was webmaster for the FAS) posting of [a Boeing post-GAO PR release that selectively regurgitates much of ] the GAO’s opinion/ruling (like that is something we didn’t already know) on the DoD’s conclusions… instead of the DoD’s conclusions themselves…

        Again, I was incorrect. I shouldn’t have let haste get the better of me.

        (But as an aside, I think it sounds even worse in the revised state)

      • ….and I hereby swear that is my last intentional post ever here on the past KC-X ‘competition’.
        I’m sure there are those who will remind me in the future lest I forget 😉

  17. well SMSsgt– please provide some handy links to the DOD and GAO opinions

    Most readers here have not seen either or both

    • The GAO report with its findings/opinions can be found all over the place and is available to anyone with a modicum of search engine skills. I checked online for a copy of the redacted AF counsel’s post-hearing brief and it appears to have been disappeared down the memory hole. Apparently, and unsurpisingly, neither NG nor the DoD has an interest in keeping it out there. (BTW: I had to shower after having to fruitlessly wade through the faux-blog Boeing spin sites in a good faith effort – eewww!).

      Fortunately!…. I long ago downloaded a copy before it disappeared. If Mr. Leeham, as an impartial recorder of history, wants a copy, I’ll send it to him.

  18. Am I the only one who cannot access Don’s AECMA links?

    It ahs all been very interesting but can someone please tell me if my summary here is correct?
    1. The EU governments are not only providing Airbus/EADS with RLI but are also somehow secretly funding them so they can undercut Boeing.
    2. The reason Boeing did not want SPEEA to go public with this information was that it was either too sensitive or too embarassing for Boeing to have their own figures published (I really got confused with this one).
    3. Everybody is afraid that EADS will somehow be able to charge the U.S. government extra for a fixed priced tanker contract, if the WTO makes them pay back money to the EU governments.

    Was not Boeing and the US government having problems with the WTO back in 2001 for some sort of Foreign Sales Corporation tax break issue? Apparently the only WTO case that has been fully heard, judged, appealed and settled as far as commercial aerospace companies from the US and EU are concerned .

    Am I the only one who goes crosseyed after reading certain comments?

    I remember a police show where one of the characters always said, “Just the facts maam.”

    I wish someone could tell that to the posliticians and the corporations. But also add in the word relevant!!

  19. Those links are very old and since then, aecma requires a subscription

    ALL of my data put together in 2000-2001 is/was from the public domain

    ****it is my opinion *** that BA did not want to reveal the real cost of an airframe-especially in light of the then ( 2000 ) inflated prices used in the military lease arrangement. Which may also be a reason the Airforce upped the Boeing price in the last competition by about 5 billion ??? due to obfuscation issues in 2008 ??

    I’ll be off line until much later today

    Hopefully Uwe will offer a translation of some of his inane comments by then.

  20. re ninja . . .”2. The reason Boeing did not want SPEEA to go public with this information was that it was either too sensitive or too embarassing for Boeing to have their own figures published (I really got confused with this one) ”

    ++++

    Partly right re Boeing/SPEEA BUT for a different reason.

    1) A CVD filing would NOT make proprietary cost figures public. But at that time ( 2001-2002) , in the case of BA, they had jacked up the ‘ cost’ of a green airframe as part of the lease program/ contract. This was because they turned the whole lease game/tanker issue over to the McDummy- St Louis gang, whom had been sucking off the government teat for over a decade.

    BA had to assume that sooner or later, the airframe cost picture/facts would surface between government agencies.

    And in december 2001, Airbus/EADS claimed they could provide tankers at 40 percent less cost than Boeing. So Boeing decided to stonewall any and all inquiries, which tweaked Congress no end.

    A partly correct story at that time was published by the washington Post – but a few significant facts were missed or left out

    http://www.washingtonpost.com/ac2/wp-dyn/A21584-2003Oct26?language=printer

    Just how could have Airbus/EADS produced tankers at 40 percent less cost than Boeing?

    1) Boeing overpriced by say 20 percnt
    2) Airbnus lowballed by say 20m percent to buy in

    What everyone missed was the basic reason for the lease. The lease was a legitimate way to get immediate funding to help preserve jobs and keep the 767 line open. It was ONE of the issues /methods put forth in the aftermath of 911.

    The lease concept was originated NOT by BA miss- management, but by a well respected Boeing employee as a result of a personal phone call to him by senator Ted Stevens a few days after 911. BA miss-management including Rudy de leon then took the ‘ball’ and proceeded to fill it with pork and lead. The rest is history ..

    http://tinyurl.com/yzryxsn

    Dan was a close friend of mine, we were in almost daily contact, and had discussed the issue in october 2001.

  21. There was an interesting meeting held in Feb 2002 a few days before SPEEA was to file the CVD petition

    Some may find this extract from minutes of interest. I and Dan and about a half dozen others were at that meeting .

    …Mr. de Leon started with his resume, which included the important fact that he had only
    been with the Boeing Company for the past six months. He continued with the fact that
    he was here today to discuss three issues: 1) Air Force 767 tanker program; 2) FSC tax,
    and 3) the plusses and minuses of a trade filing at this point in time.
    Mr. de Leon has a team of 12 looking at the Airbus issue, which was commissioned by
    Phil Condit.
    1) Tankers – the KC135’s are approximately 40 years old. The Air Force wanted
    leases to make it easier to get a new fleet of tankers, due to budget constraints over the
    next several years. Leasing the tankers allows the money to come from another pocket
    where money is available. The Air Force wanted 767s because Boeing built almost all
    the tankers the Air Force ever had. They were also getting lots of support from Congress,
    and on 12/21/01 Congress passed the defense budget bill containing provisions to lease
    up to 100 converted 767 tankers. However, The Washington Post ran an Airbus story the
    day before Christmas saying Airbus could build the tankers and for 40% less money.
    Boeing needs to prevail on this issue for the good of Congress, the public, and the Air
    Force with a contract. Airbus has retained DC law firms to help them make this a
    competitive bidding process. Airbus is making this a subsidy issue by saying this is
    nothing more than a handout to Boeing. The Air Force has to decide tankers
    configuration before the design phase may begin.
    Don asked when do we make the 1st airplane and the answer was we would start right
    away once we had a contract in hand. The present schedule is for a 2004 rollout and
    2005 delivery of the first airplane. 25% of the KC135’s are in the depot at any one time
    so the Air Force is flying wings off these aging planes. We also need new planes to
    support the War on Terrorism. This is a limiting factor for other flights (fighters,
    bombers, transports, etc.).

    2) FSC – impacts us all because it is a tax deal. European industries can get VAT
    tax back on goods they sell outside the EU. This provision for VAT was grand-fathered
    into WTO agreements in the 1980’s. However, FSC taxes were not grandfathered into
    the WTO agreements for some reason. Our government needs to fix the FSC tax problem
    in the WTO agreements if possible. Pat questioned, how does our CVD petition cause a
    problem? Answer: A trade case opens up a third front to attack Boeing. Airbus would
    say Boeing wants a trade case because we can’t compete in the market place. The fact
    that SPEEA filed the CVD Petition makes no difference as it would be said that Boeing
    put us up to it.
    Rudy said his staff’s focus will be on 767 tankers and FSC tax issues, so he hopes he
    does not have to deal with the CVD petition at the same time since his political and legal
    resources are already tied up. Discussion on what this means and how we might be of
    more help then began. Mr. de Leon presented two ideas on how people might help:
    1. SPEEA could work the hill (Congress) on 767 tankers and FSC taxes.
    2. Help find some mechanism to level the trade “playing field” between America
    and EU.
    Charles made a couple of comments:
    1. IF Boeing has plan to maintain jobs – we don’t see it? No answer provided.
    2. SPEEA wants to help Boeing preserve jobs.
    DAN made a couple of comments (some of what was said):
    1. Need to sell airplanes to airlines.
    2. Need to build up U.S. military’s resources from downturn during last 10
    years.
    3. Need insurance to fly airplanes and maybe government needs to help with it.
    Boeing is trying to fill trough in 767 line by building tankers, thus employing workers.
    The meeting went on for about 90 minutes. Mr. de Leon was unable to answer questions
    that dealt with either job security or the off loading of jobs. Both issues had come up
    during the debate in the media on 767 tankers. He was also unable to answer a question
    about what the company’s reaction would be to our filing the CVD Petition.

    ** there was some confusion as to the accuracy description of the FSC-VAT tax issue described in 2) above, and a typo re my name instead of DAN was noted later. ***

    After the Company representatives left, the remainder of us continued to discuss the
    question of filing the CVD Petition. The result was that we would not file the petition
    today. We would continue to make the petition better in preparation for filing.

    +++

    Rudy had come Ill prepared for the meeting with bunch of engineers, and his initial efforts at a phony handout were retracted AFTER Dan stood up and in a clear voice labeled it as garbage . .

    Those who were there still chuckle . . .

  22. FWIW- an additional comment regarding the meeting with Rudy de Leon ( look him up in wiki )

    Because of certain events leading up to that meeting, one of the very first comments/questions put forward at that meeting ( also attended by Bob Watt of Boeing ) was ” is this an OPEN and ON

  23. *****OOOPS *** MY BAD FAT FINGERS

    FWIW- an additional comment regarding the meeting with Rudy de Leon ( look him up in wiki )

    Because of certain events leading up to that meeting, one of the very first comments/questions put forward to Mr De Leon at that meeting ( also attended by Bob Watt of Boeing ) was ” is this an OPEN and ON THE RECORD MEETING ?

    Rudy answered in the affirmative. However months later, when the filing had been stifled, and the minutes never circulated to the Council, the coverup included the unsupported claim that the meeting was ‘ confidential ‘. To fit that claim, the minutes were poorly and improperly modified to exclude a few attendees, and eliminate mention of a previous meeting between Rudy and . . .

    And as I said earlier – the rest is history

  24. Funny that in a thread started asking why Boeing isn’t discussing the airplane, Boeing’s most ardent supporter is not discussing the airplane. 🙂

    All the best

    Andreas

  25. What about the requirement to deliver 20 tankers by 2014 fixed price (7 in 2013 & 13 in 2014)?

  26. The Euro is 20% cheaper against the US dollar – compared with early 2008 when the last contract was awarded.

    Could be helpful.

    • Good point, and that could well drive many of the pricing concerns by Boeing and its supporters.

      Between that and cutting out the middle man NG, EADS should do substantially better in their offering compared to 2008, even once hedging costs are included.

      All the best

      Andreas

  27. Pingback: Will WTO vote really matter? « Leeham News and Comment

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