Boeing Presses Airbus to Open Its Books

Associated Press
09.24.2004

The chief executive of Boeing Co. said Friday that competitor Airbus' books should be open to inspection, keeping up his lobbying of European leaders over subsidies and loans for the European aircraft consortium in a meeting with German Chancellor Gerhard Schroeder.

Boeing CEO Harry Stonecipher said he and Schroeder "spoke frankly together" about concerns he has also expressed to British and French leaders during his European trip: that Airbus is using government loans to cover as much as a third of the company's costs of developing new aircraft.

"Airbus is very successful, they really don't need these loans," Stonecipher said. "They can go to the bank and borrow money like we do."

He said that he and Schroeder both agreed that the matter was something for governments, rather than Boeing and Airbus to work out.

"I didn't find anyone in any of my meetings ... that disagreed with the idea that we need to resolve this thing and that the people to resolve it are the government officials charged with the responsibility," he said.

Stonecipher suggested that the best way to solve the long-simmering trade dispute between the United States and the European Union would be for both companies to fully open their books to inspection.

He defended a $3.2 billion incentive package that Washington offered Boeing last year, saying that it was different from upfront funding for launching new aircraft, and questioned how many tax incentives Airbus, based in Toulouse, France, had received.

"Transparency can solve the whole thing," he said. "If you have full transparency everybody can look at it and decide how it is - it ought to be an equal playing ground for everybody."

The United States and the European Union agreed in 1992 on a deal that limited subsidies for the world's two largest aircraft manufacturers to 33 percent of the production costs for new models. Washington now says the deal should be renegotiated, since Airbus has steadily taken market share from Boeing, which has cut 40,000 jobs over the last three years.

Following his meetings in Berlin, Stonecipher was heading to Munich to meet with the head of electronics giant Siemens, with which Boeing partnered recently to install 438 new high-tech explosives detectors in U.S. airports.

Stonecipher said he was hoping to be able to forge an agreement to continue close work with Siemens in developing other aircraft-related technologies.

"The easiest way in the world to drive costs down is to do things differently," he said.

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