Posted on 05/20/2005 6:04:04 PM PDT by Righty_McRight
WASHINGTON (Reuters) - The House of Representatives' Armed Services Committee said on Friday it had voted in effect to shield Boeing Co. from competition from Europe's largest defense contractor for a projected $50 billion U.S. aerial-refueling aircraft market.
The panel neither singled out nor named EADS, which wants to offer a tanker version of its Airbus A330 to the U.S. Air Force.
Instead, it voted to bar the acquisition of a major weapons system from any foreign company that gets what the United States has protested as a government subsidy barred by the World Trade Organization, said spokesman, Josh Holly.
"This provision is included in the bill as voted out of the committee," he said.
Chicago-based Boeing stands ready to compete for a tanker contract "under whatever terms the Department of Defense and the Air Force define," said Douglas Kennett, a company spokesman.
A spokesman for EADS' North America unit, Guy Hicks, said, "This is a government-to-government issue and needs to be resolved at that level."
"EADS North America is committed to contributing to the nation's defense and will continue to invest in the U.S. to meet that objective," he said.
Last year, the United States filed a WTO case challenging French, German, British and Spanish government loans to Airbus for the development of new aircraft. Airbus overtook Boeing in 2003 as the world's largest supplier of commercial aircraft.
The measure that would shield Boeing was part of the fiscal 2006 Defense Authorization bill adopted by the panel on Thursday. Approved 61-1, the $441.6 billion bill is expected to be considered on the House floor next week. The Senate version does not contain such a provision.
A 28-page press release highlighting key provisions omitted the "Prohibition on Procurement from Beneficiaries of Foreign Subsidies," an amendment offered by the panel's chairman, Duncan Hunter, a California Republican. The provision was first reported by Congressional Quarterly.
Last year, Congress killed a $23.5 billion Air Force plan to lease and buy 100 Boeing aircraft to start phasing out aging KC-135 mid-air refuelers after a procurement scandal.
Since then, Pentagon leaders have said they would hold a competition for any tanker purchases. The Air Force is studying whether to upgrade or replace its fleet of more than 530 tankers. The competition has been expected to start next year.
Hunter, a long-time proponent of so-called "Buy America" legislation, seems to have found a way to express his concerns about foreign dependency "that will resonate across the political spectrum," said Loren Thompson of the Lexington Institute, an Arlington, Virginia, research group with close ties to the Pentagon and defense contractors.
"The political system is waiting for an excuse to go after Airbus," he said.
© Reuters 2005. All Rights Reserved.
This article has so much spin, it makes me dizzy. Was the emphasis on "in effect shielding" really necessary for objective journalism? That being said, good for Boeing.
There is never a good thing that comes from throwing the EU a bone. They will just turn around and screw us when they have a chance. We must stop seeing trhem as allies and start to prepare for the worst with them. That goes for the UK too if the give up their sovereignty to Brussels.
Sounds to me like Boeing will be sole bidder on the contract. I thought that was called a monopoly?
Freetraders will be mad.
Lockmart no longer builds flying buildings. Boeing bought out Mc Donnell's name (but traded the company in the process), so who's left?
Piper Cub?
Ah, good old Boeing.
just watching the news tonight here in KS and Boeing workers are in full fledged riot mode...again. Seems the latest sleazy corporate weasels who are trying to buy whats left sent out letters tomorrow telling a huge chunk of union workers their fired, don't bother even showing up monday...classy!
I don't know who to root for in this death match, sleazy multinational corporate thugs who'd sell out their mother for a quick buck, or sleazy collectivist union thugs who'd charge their mother for a ride to the hospital....
If things work out as its going, we won't have to worry about the aircraft industry or airlines in America anymore, let them eat each other
Shrug. We have seen what happens in the past. We (the EU)
will seek a WTO ruling, that ruling will reflect the obvious,
namely a violation of free trade agreements, then the EU
will impose import tarriffs in retaliation, preferably
on exporters from red states.
Boeing gets the contract and the bill is footed by the
american taxpayer and the citrus fruit farmer in Florida.
Quite the normal little splendid transatlantic trade war.
With the notable feature that concerted EU action actually
can cause a black eye or two.
Just quit the pathetic whining about Boeing being subject
to unfair competition. With Drujun in jail and Stonecipher
fired their credibility is near WMD level.
Perhaps it is, however isn't it prudent for defense contractors to be domestic?
It is prudent. However, why is the government intent on stopping some monopolies but not others?
The other thing is that Euro gov companies are shielded from trial lawyers,unlike our own. It' a completely unfair competition.Opening to fat and happy Euro tech market while suffocating ours is like trying to make a Somali compete with Fat Albert in Sumo.
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