Challenge Boeing 777X tax breaks and adjust the US ExIm Bank rules.
This is the view of Airbus CEO Fabrice Bregier.
We had the opportunity for what amounted to a one-on-one, on-the-record discussion with Bregier during the Airbus Innovation Days media briefings two weeks in Toulouse. We sat at Bregier’s dinner table, which although filled with media, was in a noisy setting, allowing us to have some elbow-to-elbow conversation on a variety of topics that couldn’t be heard in the din.
Since we’re from Seattle, Boeing Commercial Airplane’s hometown, we of course had to ask Bregier about two topics of great interest to Washington State: the $8.7bn in tax breaks the Legislature approved to land the 777X assembly site for Boeing’s Everett plant; and the current effort in Congress by Republicans to kill the US ExIm Bank, which has become the target of ultra-conservative politicians as a “corporate welfare” for Boeing. Funding Boeing airplanes eats up a large majority of dollars ExIm funds or guarantees across a variety of industry sectors.
Bregier has previously weighed in on each topic. He colorfully termed the 777X tax breaks “bullshit” in a Reuters interview, but was far more muted in our conversation. He supported the European Union challenging the tax breaks, which were an extension of the Boeing 787 tax breaks deemed to be illegal under World Trade Organization rules in the international trade dispute from 2005 between the EU and USA. This finding remains under appeal by the US, with a ruling expected this year. Airbus claims its Reimbursable Launch Aid for the A350 was structured to comply with WTO findings that previous RLI to Airbus had been improperly granted—a position Boeing and the US disputes. Washington State Gov. Jay Inslee made no such claim with respect to the 777X tax breaks (though Boeing subsequently did so), and Airbus claims there were no changes. Thus, a new challenge is warranted, Bregier says.
“The EU has asked the WTO to investigate” the 777X tax breaks. “It’s up to the WTO to decide” if it will do so, Bregier says.
Some Republicans in the US Congress want to kill the ExIm Bank and its support of Boeing funding. One would expect Bregier would be cheering the effort. If ExIm is shut down, Airbus would have an advantage in government export financing because the European export credit agencies will continue to support the Airbus products.
Instead, Bregier said he’s not against ExIm staying in business—but that the increasing support for Boeing “has to be corrected.” He said ExIm “has become a financial arm of Boeing. More and more it is Boeing’s bank. The ECAs are not the financial arm of Airbus.”