Leeham News and Analysis
There's more to real news than a news release.
Leeham News and Analysis
- RTX Q1 2025 Earnings: GTF Talk Takes A Back Seat To Tariffs April 22, 2025
- Tariffs Tumult Takes Over GE Aerospace Q1 2025 Earnings Call April 22, 2025
- Boeing reports mixed results of latest employee survey, but middle management and officers remain key obstacles April 22, 2025
- Hopes for 1Q financial progress turns into bumpy ride for Boeing April 21, 2025
- Bjorn’s Corner: Air Transport’s route to 2050. Part 18. April 18, 2025
French union understands “Buy American” on tanker
Update, July 19: Airbus says CGT is fourth Union out of five for Airbus in France, representing about 10 percent of Airbus employees in France.
Update, July 16: We received this from CGT: the union severed ties in 1978.Christian and Jean-Jacques were amused and laughed about the Airbus response.
Original Post:
Only a few days after EADS and Boeing (and the long-shot bid from US Aerospace-Antonov) submitted their bids for the $35bn KC-X contract to supply tankers to the US Air Force, a French union at Airbus declined to endorse the EADS bid.
The Federation des Travailleurs de la Metallurgie, or CGT, holds the position that the French military should buy its equipment from French industry and to be consistent with this position, told us that it understands the “Buy American” approach of Boeing supporters.
Airbus and EADS dismissed the CGT’s view as that held by a minority union concerned about outsourcing and off-shore jobs.
Boeing offers KC-767 to USAF
It’s now official: Boeing submitted a bid for the KC-X competition, offering the KC-767 NewGen tanker.
Boeing did not schedule a press conference, so the initial press release detailing its bid is below the jump, with our reporting following the PR.
EADS submits tanker bid; Boeing to follow
Update, 2:30 PM:
- Here are three PDF slides of information from the press conference, comparing the KC-45 with the KC-767 NewGen: KC-45 slides 7-08-10.
- Boeing does not plan a press conference with its tanker submission tomorrow-just a press release and a note on its Tanker Blog. We will create a separate posting for this information tomorrow.
- Addison Schonland has an 11-minute podcast with Airbus Americas Chairman Allan McArtor.
Original Post:
EADS will submit its bid today for the KC-X tanker competition. Boeing’s bid will be filed tomorrow, when they are due.
(Detour:) This just moved from Bloomberg: The release of the WTO’s Interim Report on the EU complaint about “illegal” subsidies to Boeing has been pushed from July 16 to September.We cannot help but be skeptical about this. Every time this report was due, with timing happening to coincide with a key date in the KC-X tanker competition, the WTO mysteriously postponed its release date. Call us conspiratorial, but it seems that multiple “coincidences” are at work here. The announcement came from the US Trade Representative’s Office. Hmmm…..
Here is the Airbus statement concerning the delay:
Our take on the WTO panel report
Well, we have necessarily done a quick scan of the 1,000+ page document, skipping all the history and back-and-forth and concentrating on the findings and conclusions that begin on PDF page 288 of the document.
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Podcast with Scott Hamilton, Richard Aboulafia and Addison Schonland.
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As we noted in the previous post, as far as we are concerned there is a pox on Airbus and Boeing, for both have sinned (with Boeing’s sins yet to be detailed in the forthcoming Interim Report due July 16). Both need to go to Confession and then go forth and sin no more.
What’s next in WTO case
Update, July 2: The Russians are coming, the Russians are coming. This Defense News article details plans by a US company to offer a Russian airplane in the KC-X competition.
Photo from Defense News
Talk about a foreign, subsidized airplane….
Original Post:
Here is a good Reuters report about what’s next in the Airbus WTO report.
The EU complaint against Boeing is still in WTO hands; the Interim Report is due July 16. There will be a new round of spin machines.
As far as we’re concerned, there is a pox on both houses…..
EADS statement on WTO affect on KC-X competition
From Guy Hicks, VP of corporate communications at EADS North America:
“The Obama Administration and Department of Defense have opposed every attempt to use the ongoing WTO commercial trade dispute to derail the KC-X competition. The only beneficiary of such a noncompetitive action would be the Boeing Company. Everyone else—the warfighter, the taxpayer and 48,000 Americans who stand ready to build the KC-45—would lose. Read more
Boeing responds to the public release of the WTO ruling
Boeing has issued the following statement:
Boeing Calls WTO Ruling a Landmark Decision and Sweeping Legal Victory
– Launch aid for every Airbus program deemed illegal and damaging
– ‘Prohibited’ A380 launch aid must be withdrawn ‘without delay’
– Legal principle set: airplane programs must be funded on commercial terms
– Government funding of Airbus infrastructure and R&D programs also ruled illegal
– More information, including excerpts from the decision, will be available later today at www.boeing.com/wto
Read more
Airbus responds to WTO public release of final subsidies report
The 1,038 page Final Report by a three-member panel of the World Trade Organization on the US complaint about illegal subsidies to Airbus was made public today.
Findings and Conclusions: 5 pages, PDF. These are difficult to grasp when taken in isolation of reading the entire report, which at this posting we’ve not done.
Home Page to the Report in segments and the entirety.
The Interim Report was issued in September and the Final Report in March, but these were supposed to be confidential. Riddled with leaks to Airbus and Boeing partisans and promoted in the press as wins and losses by both sides, the public report is the first opportunity to read it for one’s self and draw conclusions.
At 1,038 pages this is going to take a while.
In a pre-release, embargoed press briefing, Airbus and its parent EADS said the appeals by the US and European Union are expected on points each side believes were in error.
Airbus made the point that this panel report has not been adopted by the WTO as fact and therefore any claims by Boeing that this is the final, and actionable, conclusion is misleading. The panel report may be appealed (and will be), after which the WTO appeals panel must decide on these appeals. After this process is done, the WTO itself must accept or reject the report.
“More has been costing more”
With the Pentagon’s announcement this week that a major push has begun to wring costs out of the defense budget, will this macro approach trickle down to one of the largest defense procurements in decades–the KC-X tanker recapitalization?
Remember when Defense awarded Northrop Grumman the KC-X contract in 2008? A key, if not the key, to winning was, “More, more, more.”
Now Ashton Carter, the top procurer in DOD, says “more has been costing more.”
Given one advantage Boeing has over EADS in the current KC-X competition–life cycle and MilCon costs–will “more, more, more” cost EADS the contract?
Dictionary and the KC-45
We love clever ads.
Here is the PDF. KC-X_Dictionary
Below the jump is EADS’ ad that appeared yesterday.