OP/ED: Airbus and Its Continued Subsidies By Europe (Part III) - The Case of Pratt & Whitney and the

Despite attempts to point out that Airbus is a single corporation and has no ties to the European Union, it is very clear that this simply is not the case. A mere phone call by a EU politician can effect the fortunes of any number of companies. The most recent example of this fortress Europe mentality is the selection of the turboprop engines for the A400M military transport being built by Airbus.



Following the issue of specifications, Pratt & Whitney Canada submitted a bit to supply the engines and found itself in competing with a company called Europrop. Europrop was a company that had been created by MTU, Rolls Royce, Snecma, Industria de Turbo Propulsores. Pratt�s initial bid not only beat the Europrop bid by more than 20 percent, Airbus itself admitted that the proposed turboprops from BOTH sides were comparable in technical merit (1). Having been assured by Airbus officials that the contract was winnable based on unit price for the 750 engine contract, Pratt was confident that they would win.

To be told at the 11th hour and the 49th minute that a non-European engine would not be on the airplane is a bitter pill - George David, Chairman of Pratt�s parent company United Technologies

www.ledger-enquirer.com...

What had happened to the bid of Pratt�s? Under intense lobbying from the European governments directly involved in the project, despite that fact that the aircraft according to Airbus, was to be built on commercial terms (i.e. Bids would be submitted and governments would purchase the whole plane, not specify each item), Europrop with prior knowledge of Pratt�s bid and amounts was allowed to rebid. Pratt was not.

According to European news reports, Germany, France and Britain were ready to veto the Pratt choice. And French President Jacques Chirac said publicly that a European military plane should have European engines.
www.ledger-enquirer.com...

Europrop received direct aid to bolster its bid in addition to the shady business practices of the EU and Airbus. In addition to providing political muscle the U.K. also provided aid in the form of came Dept. of Trade and Industry (DTI) providing research and development funding to Rolls-Royce for the TP400-D6 engine. (1)

it is very clear that the EU and Airbuses intent to actually have a real competition was totally a sham. They never intended to compete and their providing information and allowing a rebid of the contract by one party simply proves it. The Pratt design by Airbuses own admission was of comparable design yet in came in 20 percent cheaper. They allowed the European company to rebid with the knowledge of Pratt�s bid. Its shocking that they came in under. One has to wonder if the Europrop bid will require some for of subside to even break even. More likely it is yet another cog in the elaborate jobs program that Airbus is.

(1) Aviation Week & Space Technology 05/26/2003, page 66
(2) Aviation Week & Space Technology SHOWDOWN IN PARIS 05/12/2003, page 22




Related AboveTopSecret.com Discussion Threads:
OP/ED: Airbus and Its Continued Subsidies By Europe (Part I)
OP/ED: Airbus and Its Continued Subsidies By Europe (Part II) - The 1992 LCAA and Japan


[edit on 16-12-2004 by Banshee]

Fred T -
I have read yor treatise on the Airbus/EU incest with with great interest. As expected the european apologists have done what they could to try (unsuccessfully) to negate your points even going so far as t call defense contracts and a sales tax break "subsidies" this despite your well researched and heavily supported arguments that Airbus pays no sales tax and recieves the same amount in defense contracts.
However the truth is that it is only expected that Airbus and the EU would stack the deck as they both know tht there is no way they could compete on a level playing field.
Without the EU massive support of Airbus the company would be unable to sustain breakeven much less proftibillitly.
Just as the EU despite haveing a 50% larger population base can not compete with the US.
This is not due to any fundamental defieciency on the part of ether europeans or airbus but to the economic and political structure of the EU member states.
It is impossible for socialist countries to compete with capaitalist countries on an even and level playing field. Too much of the economies capital is seized and diverted by the government into social programs which only reward those who drag society down while at the same time penalsing those who raise it up.
Unless and untill europe abandons its socialist outlook europe will always be the home of complacent, lazy, and quite frankly useless burdens to society.

Fred we've done this more than a few times.

Previously you admitted and agreed that as you don't know the full package that was offered on the engines your complaints are based on less that the full facts.

.....and by the way show me an American contract where the two competing articles, one US and one foreign and both "comparable in technical merit", ended up in the foreign item being selected.

Come off it Fred.

Even the phrase "comparable in technical merit" doesn't actually mean 'totally equal' now, does it?

.....and who's kidding who here eh?
Soft money is soft money......and the world over it is understood that soft contracts (including absurdly open ended 'defence' and 'research' contracts), specific tax breaks and all the rest are 'soft money'.
But for all that loans are not subsidy; they're a different kind of 'soft money', they're (unlike most other types) repayable.....show me that happening on your side of things, eh?

......and as for mwm1331?
Sorry, carry on waving your flag, I can't even be bothered with this deliberate confusion of Airbus as some kind of branch or department of the EU.

You've been told often enough.

Yeah and by the way it's some weird definition of "failure to compete" as Airbus takes a bigger and bigger share of the airliner market.

Sore losers or what?!

What's up, fed up with losing at the WTO continually?

Maybe that's a just another part of the global anti-American conspiracy!?



Get over it.

Originally posted by sminkeypinkey
Even the phrase "comparable in technical merit" doesn't actually mean 'totally equal' now, does it?

Hmmm, not just being close from a technical standpoint. What you fail to mention or have missed, is that under pressure from various EU govenments, Europrop was able to resubmit thier bid and come under Pratt's after getting info from the pratt bid. Thats moves beyond soft money and into unethical, shady, portectionist business practices. We have had this argument before, and I beleive your stance was that the Euro bid was clearly surpreior from a technical standpoint, however, at best they were even at worst close. 20% on a 3+ billion dollar contract is not chump change. So was Europrop gauging the European taxpayers, or has the supply chian for such items become part of the elaborate jobs program the evidence seems to support. The "EU Deal" indeed. FDR would be so proud!

Hi Fred, just quickly read parts II and III, I'm a bit busy to go into it in depth at the moment but this latest post does raise a question for me that you may be able to answer.

Why was it not possible for the US to simply buy the T-45 from BAe but instead insist on MDC having leadership despite all the re-design for carrier ops on the Hawk having already been done before they got involved?

Why does Lockheed have to push the US101 helictoper to the US services, why is a straight AgustaWestland bid unthinkable? BTW GE supplies the engines for the EH101 so how do you explain that if Europe is so corrupt and evil with a determination not to buy US products?

Why did the USAF choose the F-15E as its strike aircraft after the Tornado demonstrated its superiority in that particular role and why was the Nimrod MRA-4 not even considered for the MMA? There are so many examples, I could go on and on. I admit the A-400 engine deal has more than a fishy smell about it but take the blinkers off please.

Edt; whilst I believe Fred is being ridiculously over zealous in his quest to demonise Airbus and the EU in general whilst appearing happy to pretend that US industry only wants a fair fight in the marketplace, he does argue his position intelligently.

mwnn however, cannot be taken seriously at all. hell, you don't even think that European nations are capitalist! Having governments that call themselves socialist does not a socialist country make. Labour are supposeed to be socialist but have they nationalised the railways, utilities, defence industry et al? No, they have not. they remain firmly in the private sector. In the UK we are even privatising pilot training and flight refuelling, though I vehemently disagree with this. How the hell are we not capitalist?


[edit on 17-12-2004 by waynos]

Originally posted by waynos
Why does Lockheed have to push the US101 helictoper to the US services, why is a straight AgustaWestland bid unthinkable?

Why did the USAF choose the F-15E as its strike aircraft after the Tornado demonstrated its superiority in that

Nimrod MRA-4 not even considered for the MMA? There are so many examples,

Waynos,

The Agusta US101 chopter competition for VH-1 is still open. It is common for companies on both sides of the Atlantic to select a company to pair with in a bid.

The F-15E vs. the Tornado. Hmmm we could go round and round. While the Tornado is a combat proven FB with a great record, the F-15E has also demonstrated a good deal in recent action. However, I do not recall that the Panavia corporation submitted a bid instead General Dynamics Submitted the pretty cool F-16XL or cranked arrow. At any rate the F-15E is marginaly faster, has a bigger bombload and greater combat radius. In addition there is a measure of commonality to the F-15 A,B,C and the two seat E model.

The MME Vs. Nimron. Again, the Nimrod MRA-4 is a proven capable ASW / C3I airframe. Looks aside, I had a hard time digging up the specs. Whicle the Nimrods range is listed as 6000 nm. Is that the unrefuled range? Speed seems a wash as is weapons load out. Im betting that you get better fuel burn from the CMF turbofans, but that is just my guesswork, I do not have hard facts. You get commanality (C-43) as well. The other plus is that a huge chunk of our AF reserves are commercial pilots as well and alot are type rated on the 737.

However, as I pointed out, in a bid for a contract, if one party is allowed to rebid with the knowledge of thier opponets bid, that is grossly unfair. One has to wonder if they are going to actually turn a profit on the A400 or is it yet again another elaborate jobs program.

Interest in this topic seems to be waining a bit, however, I hope that I can bring you part 4 where I can talk about how aAirbus may be dumping its planes at cost or below.

The Tornado was proposed to the USAF by Grumman in partnership with BAe who were handling all the exports on behalf of Panavia, gets complicated doesn't it. If I go into it in detail I will wander too far off topic.

I was only pointing out that there is no way the US forces would ever be allowed to buy a major system directly from a non US manufacturer so the lack of free and fair competition acts more in favour of US industry than against it. This protects US capability in the sphere and also US jobs. The point being why shouldn't Europe do the same?

At the same time I do agree about the A400 engine choice, just not the whole scene as you appear to be saying that Europe has no business protecting its industrial capability whilst at the same time having no problem with the USA doing the very same.

Waynos, I did not know that Panavia had submitted a bid for that contract. That may make a intersting topic for another thread. However, one main difference is there is a decided lack of compettion in Europe. Almost every major project is done by a multi national Eurpean consortium (Panavia, EF, Europrop, EuroChopter, Airbus and the like . Im not critisizing this mind, but in the US there may be as many as 4 companies submitting bits. The ATF saw bids from every major aviation player. This allows politicians to put more spressure on these companies than it is possible in the US. Thales and BAE despite being independant companies, still remain at the behest of thier governments as if they were government entitites. This again allows for a unfair and dramic shift in the play field. I do not use the term fortress Europe lightly. The influence is also felt at the airline level with the former national carriers. If you look at the tally sheet of say Air France. A good chunk of the Airbus products are purchased outright, while alot of the Boeing products are leased through the International Finance Corporation. Lots of airlines do this, but why are most of the Boeing products leased in this manner? Remember a while back France and Airbus threatened to refuse to service any of the A340's that boeing had purchased from SIA untill the IFL corp purchased them, then Airbus backed down.

Airbus has been good for Boeing. it has forced it to remake itslef and become more innovative. Just like AMD prods along Intel. However, given that they Airbus has a greaer market share, and more deliveries for 2005 than Boeing, the time has come to relieve the taxpayers of Europe with this burden and let Airbus compete on its own. They build great planes as does Boeing. However, lets just level they playing field.