An acquaintance of mine was recently party to a meeting with the Boeing Vice President Allan Mullaly. It was a sort of no holds barred press conference type affair. Mullaly was asked about the subsidies Boeing claim Airbus are getting and what they see as unfair about it. This is what he hade to say:
The main argument we (Boeing) have with the 1992 Bilateral was that a stupilate Max of 33% of develpment costs could be subsidised, with the subsidies moving to 0% over time.
However, since the 1992 accors, the subsidies have become a matter of regularity with Airbus. They are making no effort to moving towards the agreed and stipulated 0%. Another rather concerning matter is that Airbus is allowed a free reign to set their own production predications.
Take the A380 for example; They create the ludicrous projects of 1,500 to 2,000 A380s. Airbus is not required to start repaying the “loans” until they have reach 40% of their projection. So, with their 1,500 to 2,000 units project Airbus will not neet to pay back the subsidies untill they reach between 600 and 700 A380’s produced. Ok, fair enough. The real concern is that there is a clause that allows Airbus to change the projections of the break-even point!
Essentially this allows Airbus to infinetly postpone or avoid entirly repaying the subsidies.This is one reason (of many), which allows Airbus to discount their aircraft so much from their list price.
In short, the system is ridiculous and distorts the market.
The way I see it. Scrap that clause that allows the manufacturer to set their own break even limit and production predictions and also scrap the clause allowing the manufacturer to extend the brek-even point however far they want.
In stead set up an impartial arbitrator who dictates what the manufacturer gets and when they must pay back.
My question to all here. With the information presented here… what do you suggest?
Do not start an AvB war by posting Airbus retaliations. I simply want to know what people think about the info presented here and what they feel should be altered in the 1992 bilateral agreement in response to it.
By: Bmused55 - 2nd September 2004 at 18:14
“89.6 per cent of statistics are made up on the spot” – Vic Reeves. 😀
lol
By: Grey Area - 2nd September 2004 at 17:21
Britain has a larger percentage of low quality, high priced products.
“89.6 per cent of statistics are made up on the spot” – Vic Reeves. 😀
By: Pablo - 2nd September 2004 at 13:10
I know it’s off topic, but surely manufacturing of aircraft, cars and marine vessels these days is globalised. Ford and Vauxhall are about as British as Coca Cola and Nike. Vauxhalls are merely Opels (a ‘German’ brand) re-badged for the UK and Irish market (my Corsa was made in Spain, for example). Likewise, the Peugeot 206 which most people would consider ‘French’ is manufactured in Coventry.
Same goes for aircraft. I think parts for Bombardier’s CRJ series (i.e. Boeing) are manufactured in the Shorts factory in Belfast.
By: Bmused55 - 2nd September 2004 at 08:43
So, planes…great things, eh? lol
so I’m told
he he
By: Bmused55 - 2nd September 2004 at 08:33
yes, lets do 🙂
By: Bmused55 - 2nd September 2004 at 08:19
No, sea trials are for testing that the vessel is capable of doing what the contract says; that may include speed trials and systems operation. Parts coming off, and the ship coming back damaged is not whata sea-trial is for.
The point being, it doesn’t matter what country you go to for your manafacture; there are going to be low-quality, low-craftmanship companies there. There are companies out there with a reputation. Let’s face it, the aerospace industry is among the high-end of these; yet it does have it’s flawed elements…design-wise, but countruction-wise each is as solid as each other…
and yes btw
Sea trials are done to shake down the ship. Make sure everything is working and can handle the job it is designed to do.
Ships are usually tested in rough seas to test their sturdiness.
The idea is to find the things that could go wrong or break while on sea trials… rather than load the boat with pax and then have it go wrong.
By: Bmused55 - 2nd September 2004 at 08:17
Britain has a larger percentage of low quality, high priced products.
By: Bmused55 - 2nd September 2004 at 08:10
dont’ya just love going off on a tangent 🙂
By: Pembo330 - 2nd September 2004 at 08:08
Another great, well balanced debate on the thread subject. 😉
By: Bmused55 - 1st September 2004 at 22:43
Wait, am I picking this up wrong. Sandy is recommending the purchasing of a FRENCH product? 😀 😀 😀 Well, there you are….that says it all 😛
What about “Cunard” who put out a tender for the QM2, built by the French, had problems on it’s maiden sea trials, bow thruster door came off for instance. THe cabins, bought cheaply from Poland, they are a fire hazard int hemself – an examples of companies scrimping, and pocketing the profit….
with all due respect, that is exactly what sea trials are for
By: beistrich - 1st September 2004 at 21:52
to the subsidies war: A get loans from the EU, B from US (and by the 7E7 from Japan)
Where is the proplem?
By: Bmused55 - 1st September 2004 at 21:44
Oh and another widly publisized problem with Ford
their Focus has a tendancy of cutting out on you when your driving along.
Watchdog had a progam devoted to the problem.
Many hundred of people reported that as they were cruising along, some up to 80mph on the motorway, they found that the engine just cut out. Leaving them with no brakes or powersteering.
Many of the people who experienced this had their cars swapped for a new focus…. only to have the same problem.
Then we have the story of the Vauxhall Frontera whos acceleraqtor pedal will stick in the down position. After many crashes and one drive getting decapitated vauxhall finally admitted a fault with the car. Again Watchdog did a report on this.
This is but a taste of what the british motoring corporations have to offer.
Buy foreign folks..
By: mongu - 1st September 2004 at 21:42
To be fair all brands can go wrong.
My last car was a BMW 318. It was reasonably new, but out of warranty. It kept going wrong and the bills were a nonsense. I got rid of it and bought a cheap little Saxo. I ended up regretting the Saxo and bought a Mondeo. It’s the best out of all 3 cars.
By: Bmused55 - 1st September 2004 at 21:38
Sandy.
“I don’t think I should be carefull at all.”
Are you sure about that?
“The quality of british products HAS taken a huge nosedive in the last 10 years. Its well known. Companies scrimping on materials and upping label prices to maximise profit.”
Can you substantiate that allegation? Give named examples. If you are that confident in your allegations you should have no qualms at all about identifying companies that do ‘scrimp on materials and up label prices.’ Is it actually well known? Or is it just perceived to be?
“Sure there are still a few respectable companies that deliver the best quality you would expect. BAe systems for example.
These are the ambassadors for british industry.”There are numerous British companies that lead the world in their field, not just a few. You do appear to be extremely biased in your views and not really able to substantiate your claims.
I have never flown on an Airbus product but have flown on two Boeing 737’s. In both cases the aircraft were neither clean (inside or out) or appeared well cared for. Seats damaged and unavailable, lights not working, tables broken, trim loose or badly fitted and upholstery in a state of disrepair. Is this a symptom of wear and tear or of a product not of the quality I might have expected?
Regards,
kev35
My argument about british products was an aside comment. Not directed at either A or B.
You want an example?
My neighbour bought a BRAND NEW ford Mondeo. He drove it off the forcourt and it broke down half a mile down the road.
The clutch was utter crap and gave up in that short distance.
Not happy with the response from the dealer, he handed the car bacl, got his money and went to another dealer. Bought a Rover. 2 weeks later the exhaudst fell off and the engine developed a bad oil leak. Bare in mind this car was brand new.
He returned that car, got his money back. He drives a Peugeot 406, built in france. No problems after 50 thousand miles.
I Drive a Peugeot 406 too. 155 thousand miles on the clock, 8 years old. Not one damn thing wrong with it.
My other neighbour has a 2 year old Ford focus. Its in the garage more often that its on the road.
What I have learnt from this? Buy foreign, stuff the british product.
I have many experiences. Would you like me to list them all?
By: mongu - 1st September 2004 at 21:26
Hmmm….not strictly aviation related.
But for my 2p worth, I agree with Bmused55. Brtish products wouldn’t be my choice, with a few notable exceptions. The Europeans build ATR’s and BMW’s. We build ATP’s and Rovers! No argument there over “quality”.
By: kev35 - 1st September 2004 at 20:53
Sandy.
“I don’t think I should be carefull at all.”
Are you sure about that?
“The quality of british products HAS taken a huge nosedive in the last 10 years. Its well known. Companies scrimping on materials and upping label prices to maximise profit.”
Can you substantiate that allegation? Give named examples. If you are that confident in your allegations you should have no qualms at all about identifying companies that do ‘scrimp on materials and up label prices.’ Is it actually well known? Or is it just perceived to be?
“Sure there are still a few respectable companies that deliver the best quality you would expect. BAe systems for example.
These are the ambassadors for british industry.”
There are numerous British companies that lead the world in their field, not just a few. You do appear to be extremely biased in your views and not really able to substantiate your claims.
I have never flown on an Airbus product but have flown on two Boeing 737’s. In both cases the aircraft were neither clean (inside or out) or appeared well cared for. Seats damaged and unavailable, lights not working, tables broken, trim loose or badly fitted and upholstery in a state of disrepair. Is this a symptom of wear and tear or of a product not of the quality I might have expected?
Regards,
kev35
By: MSR777 - 1st September 2004 at 20:30
‘ Ere we go again………………………………
By: Bmused55 - 1st September 2004 at 20:11
[QUOTE=Matthew Murray]
…Shabby worksmanship…QUOTE]
I’d be careful what you said about workmanship. Sure there are poor examples, but equally there are craftsman/engineers that produce excellent work…
I don’t think I should be carefull at all.
The quality of british products HAS taken a huge nosedive in the last 10 years. Its well known. Companies scrimping on materials and upping label prices to maximise profit.
Sure there are still a few respectable companies that deliver the best quality you would expect. BAe systems for example.
These are the ambassadors for british industry.
By: mongu - 1st September 2004 at 18:13
Both companies are excessively subsidised. The payments B receives for government work are hardly “commercial” rates – the defence industry is famously corrupt. Can you name a project that hasn’t been 20 years late and £9,000,000,000,000,000 over budget? B also receives sales help from the government to a greater extent than A (simply because their government is more powerful).
However I feel that A is subsidised to a greater extent than B. The Europeans in general, especially the institutions, model themselves on Nigeria.
By: Bmused55 - 1st September 2004 at 17:39
Sandy,
unless I’m mistaken youdidn’t comment on the points raised above? Any particular reason for that.
I have no preference for one airframe over the other, I don’t know enough about them. What I do know however, is that if it came to a choice betwwen the two I’d go for the one which safeguarded British industry, wouldn’t you?
Regards,
kev35
For sure, we should always safeguard british industries.
thing is.. the more I experience it the more I realise british engineering isn’t what it used to be. Shabby worksmanship and cheap materials being the chief culprits.
But thats another matter.
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September 1, 2004 at 10:02 am