U.S. Plane Maker Accuses Airbus of Trade Violations
McDonnell Douglas Corp. said Wednesday that Airbus Industrie, the European plane manufacturing consortium, has launched an unprecedented effort to overturn pledges by airlines to buy McDonnell Douglas’ new MD-11 wide-body jetliner and instead purchase the proposed Airbus A340.
The company said the U.S. government believes Airbus’s actions violate international trade agreements.
U.S. officials have said the United States is ready to file an unfair trade practice complaint against Airbus if the European consortium goes ahead with its A340 marketing effort.
Senior U.S. trade officials have been in Europe this week for talks with the governments of France, West Germany and Britain, chief sponsors of Airbus.
McDonnell Douglas said Dec. 30 that it would begin construction of its long-delayed MD-11, a successor to its widely used DC-10. It said it had commitments from 12 airlines for 52 planes. The A340, which is still in the planning stages, would be a direct competitor for the MD-11.
McDonnell Douglas said the Airbus effort reportedly included such “predatory practices” as offering prices substantially below those needed to recover the A340’s design, development and production costs.
“They (Airbus) have also reportedly included providing used aircraft at no cost for use by customers’ airlines until the A-340 is delivered, agreeing to pay any damages and costs airlines may suffer for canceling their commitment to McDonnell Douglas and offering what we believe are unrealistic delivery dates for the A340,” the company said.
Under international trade agreements, a firm can be subsidized by governments if over the long haul the payments give the firm a reasonable chance of making a profit.
Airline specialists say West Germany, France and Britain have spent some $15 billion on Airbus since 1970 and Airbus has yet to make a profit.
U.S. Under Secretary of Commerce for International Trade Bruce Smart and Deputy U.S. Trade Representative Michael Smith concluded their talks in Europe Wednesday on the Airbus dispute.
But West German officials said no progress was made.
