WTO Rules Airbus Got Billions in Illegal Subsidies

Washington Democratic Sen. Patty Murray and IAM General Vice President Rich Michalski address the media following landmark WTO ruling that Airbus received billions in illegal subsidies.

In an historic decision that underscores what Machinists have known for years, the World Trade Organization (WTO) declared that every Airbus program for the last 40 years has benefited from billions in illegal subsidies from European governments, causing serious financial harm to the U.S. commercial aircraft industry.

“The WTO has ruled that Airbus has used illegal government subsidies for more than 40 years to become the world’s largest maker of commercial jets – and it does so as Airbus continues to use those subsidies to roll out new planes,” said Washington Democratic Sen. Patty Murray at a Capitol Hill press conference to applaud the WTO ruling. “They ruled that France, Germany and Spain provided more than one billion euros in infrastructure and infrastructure-related grants between 1989 and 2001—as well as another billion in share transfers and equity infusions to Airbus.”

While the WTO decision is likely to be appealed by Airbus, the ruling will certainly fuel the controversy over efforts by Airbus to win the contract for a new Air Force refueling tanker. The WTO report concludes that without illegal subsidies, Airbus could not have developed its Airbus A330-200 tanker platform “without significantly higher costs.”

The U.S. government estimates that Airbus received financial assistance from European taxpayers worth more than $200 billion.
The WTO report was unequivocal in describing the overall impact of the illegal subsidies: “Even in the unlikely event that Airbus would have been able to enter the (large jet) market as a non-subsidized competitor, we are confident that it would not have achieved the market presence it did,” said the report. “It would have been a “much different, and we believe a much weaker, (large jet) manufacturer” and the U.S. commercial jet industry “at a minimum … would have had a larger market share.”

U.S. lawmakers and labor leaders have already begun to call on President Obama to ensure that Europe complies with the WTO ruling and to take into account Airbus’ unfair competitive advantage in the KC-X tanker competition.

“The president has the ability to instruct the secretary of defense to do the right thing here,” said Headquarters GVP Rich Michalski, who took part in the Capitol Hill press conference.