Letter: Airbus Pays Back Loans, Doesn't Take 'Handouts'

The Wall Street Journal 02/15/05
author: T. Allan McArtor / Chairman
(Copyright (c) 2005, Dow Jones & Company, Inc.)

In reaction to Holman Jenkins's Feb. 9 Business World column "Airbus is World-Class -- So Start Acting Like It!":

Far from "taxpayer handouts," Airbus has received repayable loans to develop several new aircraft programs (yes, they are being repaid every day with every aircraft delivery). These loans were part of a 1992 agreement between the U.S. and Europe on how the governments could support their aircraft manufacturers. What Mr. Jenkins failed to examine accurately is the other side of that agreement -- the method by which the U.S. supports its industry.

Boeing has reaped billions in U.S.-taxpayer-funded government subsidies (read, "never repaid") through research and development contracts and infrastructure support. Instead of investing in the future, Boeing spent $9 billion buying back its own stock. Now, having watched as its products became uncompetitive (only one new aircraft program since 1989), Boeing reportedly has agreed to take billions more in production and R&D subsidies for its planned 7E7 -- none of which is repayable. The payback for many of these supports is that Boeing is sending overseas critical 7E7 work and technology likely developed with U.S. taxpayer money.