Lee Witten wrote:
> It's not Boeing's financing philosophy, it's the climate they find
> themselves in. They'd love to be in Airbus's current position with regard
> to new product financing.
But in the end, it is all about competition. not between Boeing and Airbus,
but between the american style of subsidies/help to corporaions and the style
used elsewhere in the world. For a long time, it was though that only the USA
system was able to create long term winners. But now, as it turns out, the
other style of government/business also has the ability to generate successes.
Where Boeing has a point however is that now that Airbus is established and
has gotten to a point similar to that of Boeing (renew product line) with the
two having roughly equal share of the market, the european government have
completed their job of building an aeronautical industry.
What is left now however is ensuring Airbus remains competitive against
Boeing. And this is where the USA is playing semantics games. Boeing gets aid
from governments, but it just doesn't call it "subsidy" whereas it calls the
aid Airbus gets "subsidy".
This is similar to americans complaining canadian farmers get subsidies and
stating that american farmers don't get any subsidies (when in fact american
farmers are the ones who get the most state aid in the world).
So the current "subsidies" issue with Airbus is now just the same "our shit
don't smell" arguments used by americans in so many industries.
> I don't think Boeing can force a banker to do anything - do you?
But a government could help back such longer term loans, putting pressure on
bankers to think ahead of next quarter's numbers. (especially when the same
banks rush to lend money to 3rd world countries).
> pointed out, their traditional customers are in a lot of trouble and so
> they are really working hard on a lot of different oportunities to get the
> program off the ground.
And this is the issue with long term vs short term. The 7E7 has a lot of
potential. There are a lot of 767s to replace out there. Even Delta will
eventually need to replace those planes, but everyone knows that it can't
place orders within the next year or so. But I bet Boeing is out knocking at
Air Canada's doors these days.
The thing is that it takes time to build a new aircraft, test it etc. And you
want it to be deliverable commercially when airlines start to want those
planes again, otherwise airlines will buy from the competition which already
has a product out. Boeing really has no choice but to build the 7E7.
And since it was unable to secure sufficient financing through the version of
capitalism practices in the USA, it went abroad to get funding (Japan being
the example often cited).
So in effect, Boeing might be arguing against the very philosophy which is
allowing it to build the 7E7 before the demand has materialised, a decision
which will be a win-win for boeing because it will be ready with a new plane
just as US airlines are ready to buy again. |