Thursday, September 16, 2010

Boeing Response to Public Reports Regarding the WTO's Interim Decision in DS 353 - Sep 15, 2010

Boeing Response to Public Reports Regarding the WTO's Interim Decision in DS 353 - Sep 15, 2010

Publisher's note:  According to my colleague Dr. Sheila Ronis, a national security strategist and Director, MBA Programs Walsh College, Europeans, and the rest of world inclusive of China and Japan, have consistently demonstrated they are "more wise and understanding than most Americans when it comes to protection of a given country's manufacturing base."  As she observed in the 2003 eMOTION! analysis "Super-Globalism: Strategies For Maintaining a Robust Industrial Base Through Technological, Policy and Process  Improvement",  ( structured to drive home the point of the critical nature of industrial base sustainability, "Winning wars requires fighting and winning three battles, simultaneously. This is true for a lifecycle product team and the Pentagon.

"The near battle is where the troops are engaged in daily combat. For a team engaged in product development, the near battle is in the daily designing, developing, engineering, and manufacturing of the product. The near battle can be described as a product being made and sold in the marketplace on a day-by-day basis in competition with global competitors.

"The rear battle is the infrastructure, or foundation needed to support a continuous near battle. This includes enablers in the environment such as well-educated and trained people, including leadership, well-designed processes, and the development and inculcation of doctrine or governing and operating principles and the associated accountabilities required.

"The deep battle is the infrastructure needed to fight future battles. For product teams, this is the investment in future infrastructures, such as R&D or advanced manufacturing, the development of process, holistic management and the skills and learning which are required for the future of all employees – or soldiers.

"The rules of war say that all three battles must be fought at the same time, so leadership must align itself, the behavior of all its people and the organization’s capability as the three battlefields are planned for, strategies are determined, and executed. The three battles are viewed as a system."

"Conversely, the utilization of war strategies and tactics by a company or a country seeking dominance in a given industrial sector demands a response in kind. Failure to do ensures the ignominy of defeat. "

Wise and perhaps prescient words - if not warning - of an urgent need for trade policy shapers and executive management within industry to significantly modify their worldview in such matters. - Myron D. Stokes

Boeing KC-767 Tanker   Image: Boeing
CHICAGO, Sept. 15 /PRNewswire/ -- Boeing (NYSE: BA) today released the following statement, responding to public reports indicating that the WTO panel examining European Union allegations of U.S. government assistance to Boeing has issued a confidential interim ruling rejecting the vast majority of Europe's claims:

"If today's reports are accurate that some $3 billion of the EU's claims were upheld by the WTO, excluding the claims that relate to past programs long ago remedied by Congress, then the ruling amounts to a massive rejection of the EU case and confirms that European launch aid to Airbus stands as the single largest and most flagrant illegal subsidy in the aerospace industry.

"Nothing in today's public reports on the European case against the U.S. even begins to compare to the $20 billion in illegal subsidies that the WTO found last June that Airbus/EADS has received (comprised of $15 billion in launch aid, $2.2 billion in equity infusions, $1.7 billion in infrastructure, and roughly $1.5 billion in targeted research support).

"Nor are there seemingly any violations requiring remedy approaching the scale of remedy required of Airbus/EADS as a result of the WTO's June ruling that European governments must withdraw and remedy the $4 billion in still outstanding illegal launch aid subsidies that Airbus/EADS received for the development of its A380. Billions must be repaid or restructured on proven commercial terms. And, equally, they must remedy the adverse effects of the other $16 billion in illegal subsidies, too.

"Neither do the public reports suggest that Boeing's traditional market based approach to financing new aircraft development will need to change; a distinct contrast to the requirement that Airbus/EADS abandon its plans for financing development of new models such as the A350 through launch aid subsidies.

"Given the shape of today's opinion, as it has been reported, the WTO findings against the US are likely to require few changes in U.S. policies and practices. One of the two principal matters that the WTO is reported to have cited as inconsistent with its rules was long ago remedied by the Congress: general US export tax policy embodied in FSC/ETI. That was litigated at the WTO and remedied last decade. As to the second principal matter – NASA research – we are heartened to read that, contrary to statements earlier today from European sources, three-quarters of the subsidies at issue were found to be wholly compliant with WTO rules.

"Today's ruling underscores our confidence in the WTO processes and dispute-resolution procedures. We applaud the body for its work and continue to look to Airbus/EADS and the EU to recognize that in today's global market, it is essential that everyone play by the rules and abide by the WTO requirements. Playing by the rules, for Airbus/EADS, means withdrawing their still-outstanding A380 prohibited launch aid subsidy and financing the A350 on commercial terms."

Contact: Tim Neale, Boeing, 703-465-3220