Two news items caught our eye this morning.
The first was the financial reporting for EADS today. Although EADS reported a small loss on foreign exchange and financing costs, the company increased its cash position. This came under criticism in Germany for the bailout of the A400M program.
At the time (and today) we didn’t have any particular issue with that contract being renegotiated. It was a poor contract in the first place and government meddling over the engine selection might arguably be considered at the root of the program delays. But the increasing cash position does beg the question why Airbus plans to tap government launch aid for the A350.
Although the WTO did not find launch aid, per se, illegal (just how it was implemented), we don’t believe a healthy company needs government money, period.
Which brings us to the second story that caught our eye. It seems there is a bit of a renewed controversy in South Carolina over this state’s issuance of $250m in bonds for the Boeing 787 production facility.
The irony of Boeing’s complaints over government aid to Airbus, of course, is that while the fight at the WTO was reaching its peak, Boeing sought and received nearly $1bn in government aid from South Carolina and local jurisdictions for the second 787 assembly line, according to press reports at the time.