November 3, 2009—A bipartisan group of 39 House members sent a letter to President Obama on Monday urging him to factor the “illegal” launch subsidies that Airbus has reportedly received from European governments for its A330 aircraft into deliberations over the Air Force’s KC-X tanker competition.
Otherwise, they warn, Airbus’ parent company EADS, which is paired with Northrop Grumman in bidding for KC-X, would be able to submit “a reduced bid price” for its A330-based tanker that “would not otherwise be economically viable.”
Without saying so explicitly, they imply that this would place rival Boeing’s tanker offering at a disadvantage. It would also be “injurious” to the US economy and national security industrial base, they argue.
The group is led by Rep. Norm Dicks (D-Wash.), Rep. Jay Inslee (D-Wash.), and Rep. Todd Tiahrt (R-Kan.), in whose states Boeing has a significant presence.
Earlier this year, the World Trade Organization reportedly upheld the US charge that Airbus received illegal subsidies in an interim ruling released to government officials on both sides of the Atlantic.
A European counterclaim before the WTO alleging illegal US subsides to Boeing is still under review.
Thus far, the Pentagon has indicated that it will not consider WTO findings on subsidies in choosing the new tanker. But these House members state that, “One way or another, it is imperative that the bid price of the Airbus tanker reflect this illegal subsidization.”
(For more see the Press-Register’s Tuesday report and Associated Press’ Nov. 2 report.)