Category: Airbus, Boeing, Bombardier
Tags: Airbus, Boeing, Bombardier, Ex-Im Bank
Does this close the debate about Airbus reimbursable launch aids?
Ex-Im and RLI are separate, unrelated issues, so no, it doesn’t.
Is this really the end of the “stupid debate”? I think there is a pending lawsuit from the Air Transport Association of America (ATAA) over those subsidies.
The whole debate generates bad publicity for Boeing. I am sure they would have preferred to protect their immaculate reputation of a corporation that does not require any form of government subsidies to do business. It’s kind of ironic that Boeing has to defend the business of subsidies after suing Airbus over the same “business principles”.
The reality is that no aerospace manufacturer can survive without some form of government subsidies. It can come from local governments, the military, the Eximbank, or NASA, it’s all tax payers money. The form may vary from one country to another but the essence remains the same.
Without subsidies the aerospace business cannot survive. This has been demonstrated throughout history and across the globe. There are few exceptions. It is not a question of ideology. There is a fundamental reason for this. It has to do with the fact that aerospace R&D requires extraordinary large capital investments, with no potential returns over extremely long periods of time.
No wonder there are only two players left!
Export financing (through ExIm for US, ECA for Airbus) are separate and distinct from Airbus’ RLI or Boeing’s DOD/NASA subsidies. Readers continue to mix the two approaches and claim they are related. They are not.
Insofar as Eric Cantor (whose squeeze is a Delta lobbyist) got several elements of what Delta wanted into the renewal, we would not be surprised to see Delta and A4A withdraw the lawsuit. But we will see.
Technically you are right Scott. But my point is that in the end it’s all tax payers money anyway. A government subsidy remains a government subsidy in all circumstances.
They might take various forms but they are all subsidies. Wether they are direct subsidies, or military subsidies, or export subsidies, it’s all the same and it all comes from the same place: the tax payers pockets.
But I agree that on a judicial basis they are totally different beasts.
Is the Ex-Im bank a non profit venture?
Through the fees collected, the ExIm returned ~$2bn to US Treasury in the last five years. Another reason the Republicans ought to support it. How many government agencies actually make money?
Maybe they returned $2bn to the US Treasury but I wonder jsut how much was used up in adminstrative fees and so forth. =:-)
Ninja – if you drill down into the Ex-Im website’s FAQ at http://www.exim.gov/news/20120411thefacts.cfm you will find this:
“Ex-Im Bank operates without taxpayer funding and earns revenue that helps reduce the deficit. By charging fees and interest on all loan-related transactions, Ex-Im Bank is self-sustaining and is able to cover all operation costs and potential losses while also producing revenue. The Bank has generated $1.9 billion for U.S. taxpayers over the past five years”
What impact do Ex-Im bank activities have on the regular lenders? Does it create pricing pressure?
“We find this very interesting: Boeing says Airbus is engaged in predatory pricing on the A320. Airbus says Boeing is engaged in a price war.
What’s the truth? ”
Maybe it got lost Boeings statement is a next day reaction on Leahy’s comment. Thoughtfully represented here..
IMO another ” if you can’t convince them confuse them” by Boeing hoping the public will conclude the truth is somewhere in the middle. That’s a good PR result is the truth isn’t in the middle.
I have noticed this Boeing media strategy frequently recently. If it works maybe Leahy should start saying the A330 is better then the 787..
The Ex of Ex-Im goes to the market with favorable loans where commercial banks hike on risk to foreign companies wishing to purchase US manufactured goods. It’s mandate is therefore to support US manufacturing. And although often derided as Boeing’s Bank, people should expect growing influence of the Ex of Ex-Im across industries as the US (attempts to) shift(s) from majority consumer to majority producer. In other words, US government is attempting, or pushing US trade surplus environment over prolonged periods of time, as the US consumer steps away from driving world economic growth. (At this point, someone will likely bring up RLI. The arguments will all be the same.)
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