Federal government should not reward foreign companies for cheating – InsideSources
Here’s a 21st century conundrum: “What do you call a defense contractor who cheated and cost American companies billions of dollars?” The answer: Airbus.
Don’t take my word for it. Here is then US Trade Representative Robert Lighthizer two years ago: âFor years, Europe provided massive subsidies to Airbus that seriously injured the US aerospace industry and our workers. Finally, after 15 years of litigation, the WTO (World Trade Organization) has confirmed that the United States has the right to impose countermeasures in response to illegal EU subsidies.
The WTO granted the US $ 7.5 billion, almost double the highest amount it has ever granted. It had been going on for years. As early as 2011, a WTO special group “confirmed that the EU and four of its member states (Germany, France, UK and Spain) have provided over $ 18 billion in subsidized financing to Airbus and caused Boeing to lose sales of over 300 aircraft and significant market shares in the world. “
There was never really any doubt that Airbus was taking the subsidies, and that it was a mistake. It just took almost a decade of appeals to finally close the case.
While dragging this appeal, Airbus was also engaged in corrupt practices, both in the United States and abroad.
“Airbus has admitted to waging a multi-year campaign of corruption around the world,” US lawyer Jessie K. Liu of the District of Columbia said last year. âThrough bribes, Airbus allowed widespread corruption to invade the American system. In addition, Airbus has falsely reported information about their conduct to the US government for more than five years in order to obtain valuable licenses to export US military technology. This case illustrates the ability of our prosecutors and law enforcement to work with our foreign counterparts to ensure that corruption around the world is prevented and punished at the highest level.
Airbus paid some $ 3.9 billion to settle this case.
There is a pattern here. Airbus cheats to win contracts with governments, including ours. Then, European governments reimburse Airbus through illegal subsidies. All the while, Airbus continues to bid on defense contracts, as if it is not a corrupt actor.
In June, for example, âAirbus US Space & Defense Inc., Arlington, Virginia, obtained an amendment of $ 119,788,924 (P00455) for contract W58RGZ-17-C-0010 for an extension of the logistics support services of the contractors for UH-72 Lakota. “
In India this year, âa $ 2.5 billion contract was finally awarded to Airbus Defense & Space to order 56 Airbus C-295 military transport aircraft as part of a project to replace the Avro. Obsolete HS 748 of the Indian Air Force (IAF). air carriers. The first of these devices will be made in Spain, and some will eventually be made in India. If Airbus keeps its word.
Were these contracts fair? Or were they the result of illegal subsidies and unfair government support? There is simply no way to find out. No one would want to bet on Airbus, based on its record of deception over the past few years.
Let us go back to the $ 7.5 billion fine imposed by the WTO. The arbitrator calculated this amount on the basis of the WTO findings that EU launch aid to Airbus leads to significant losses in sales of Boeing wide-body civil aircraft and hinders exports. large Boeing jets to the EU, Australia, China, Korea, Singapore and the United Arab Emirates. markets. Note that these are civilian aircraft. That says nothing about the price Airbus cost defense contractors. Probably billions more.
This matters a lot, because if Airbus continues to win contracts, the losers are American companies, American workers and American taxpayers.
Parents know that if you reward bad behavior, you’ll end up with more. Politicians should also remember this when Airbus applies for defense contracts. The company is paying the price, but it has to lose more contracts before we can be sure it will reform.