[Congressional Record Volume 151, Number 41 (Monday, April 11, 2005)]
[Senate]
[Pages S3403-S3406]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                                 AIRBUS

  Ms. CANTWELL. Mr. President, I thank the Senator from Oklahoma for 
yielding to my colleague, Senator Murray, and me. We are going to speak 
about the resolution that the Senate passed, and passed with large 
support from my colleagues on both sides of the aisle, which we are 
very happy to see. The issue of a level playing field for a competitive 
aerospace market is something that is critically important to the 
American people and to the workforce of America. I thank our leaders, 
Senators Frist and Reid, and Senator Baucus for bringing this 
resolution to the Senate floor today and for moving this through the 
process so that we can send a message from the Senate about how 
important we think it is to have a competitive aerospace market.
  My colleague has been following this issue for years and is going to 
lay out some of the issues that we in the United States have been 
trying to elevate to the point of awareness so we can establish a 
competitive marketplace. The bottom line is, negotiations that were 
begun in January of this year between the United States and the 
European Union to discuss how to battle the competitive aerospace 
market today that doesn't unfairly have government backing and 
subsidization of major aerospace manufacturers, those negotiations have 
broken down. Now we are at a point where the issues to be resolved, 
specifically launch aid and the financing of the production of a new 
A350 plane by the European Union, are something it is important to 
address quickly.
  The reason I say that is because we know when you have the financial 
backing of a government juxtaposed to the financial backing of the 
private sector, in the United States, when Boeing builds a plane, it 
goes out and finances that with the backing of the capital markets, of 
Wall Street, of the private banking institutions, and they have to 
prove that plane is a success. They don't get any forgiveness on the 
loan. They don't get any special rate. They don't get any discounts if 
the plane is not a success. When they go to the capital markets, they 
have to prove the success of the marketplace.

  I can tell you now that success is happening with the 787 plane, the 
newest product that Boeing launched a year ago and is out there in the 
marketplace selling today. But they are competing against a plane that 
is being or has the potential to be financed by the European Union. So 
if you think about the A350 getting launch aid, or potentially getting 
launch aid from the European Union, it doesn't matter whether the plane 
is a success. It doesn't matter how many planes are sold. They have a 
special arrangement so that in the backing of the financing of that 
plane, the European Union becomes the deep pocket.
  What does that mean to consumers who are buying these planes and what 
does it mean to the workforce? It means simply this: The Americans have 
a disadvantage when selling Boeing planes around the globe because they 
have to meet the competitive markets of private financing while the 
Europeans--it doesn't matter whether their plane is a success--get the 
backing of the European Union. The whole global economy is based on a 
fair and competitive marketplace in which we are going to drive down 
costs to consumers--the airlines, in this particular case--and we are 
going to let the best airplane win in the marketplace because they have 
designed a product that the workforce, the consumers, the aviation 
industry wants to see.
  We don't want government making those decisions. We want the private 
sector making the decisions. That is why I am so glad the 
administration has taken an aggressive approach on this issue and has 
pushed for the discussions that are now ending. The administration, 
through the USTR office in the White House, has said if the European 
Union continues to use new launch aid subsidies for the A350 plane, 
then, yes, we are going to go to the World Trade Organization and file 
a complaint. That is an appropriate action by this administration.
  What would be better is if the Europeans would sit down at the table 
and come back to this discussion that should have been part of the 1992 
discussion on how to have a competitive aerospace industry. But that 
didn't happen. So now in January of this year, the two sides, the 
European Union and the United States, sat down at a table and said they 
were going to negotiate in good faith. Part of that negotiation was to 
have the parties at the table make no new government support agreements 
during the time of the negotiations. Yet that is exactly what Airbus is 
now coming in to talk about--subsidies and launch aid for the A350.
  It is important that this body send the message it sent today, that 
we are going to be behind the administration, behind USTR, behind the 
White House in making sure a fair and competitive aerospace market 
takes place, that we are not going to sit by and see one manufacturer 
make a great product that has basically taken off in the marketplace, 
getting sales, getting people to buy the plane because they built it 
the old-fashioned way. They had an idea. They had the right feature 
set. They had the right product. They had the right design and 
customers are buying that. Yet they may have to compete against 
somebody who has the deep financial backing of a government that 
doesn't care whether it is the right feature set or the right product.
  So we in the United States care greatly about the competitiveness of 
this marketplace. We have lots of jobs in aerospace, and we certainly, 
in Washington State, have benefited from that and so have many of my 
other colleagues in the Senate because there are probably aerospace 
manufacturing jobs all over the country.
  But the point is that we have to have a competitive marketplace, not 
just in aerospace but in other areas. The sooner we get back to the 
table and address the issue of how unfair launch aid is as a concept, 
the sooner we can get to a competitive marketplace. And the sooner we 
can get a fair and competitive marketplace, the sooner the consumers 
will win and the United States will continue to have a level playing 
field in which our workforce, which is producing a great product that 
is winning in the marketplace, will continue to win based on the 
success of their results and not be basically disadvantaged because of 
an unlevel playing field.
  So I am glad to be here with my colleagues on both sides of the aisle 
to speak enthusiastically about the resolution we just passed. I hope 
it will be noticed by the European Union that we are united--Democrats 
and Republicans--in getting this issue addressed and that a competitive 
aerospace market that is driven by private investment backing is the 
best way to go for us, not just as a nation but for true global 
competition.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Washington, Mrs. Murray, is 
recognized.
  Mrs. MURRAY. Mr. President, I rise this evening, as well, to join my 
colleague in support of the fair aerospace competition resolution that 
passed this body 96 to 0.
  Thousands of American aerospace workers have lost their jobs in the 
past decade. That trend is going to continue unless we take action.
  This evening I especially thank leaders on both sides of the aisle--
Senator Frist and Senator Reid--for their help and support of this 
measure. Senators Grassley and Baucus of the Finance Committee have 
been of great help. And, as always, I am proud to serve with Senator 
Maria Cantwell, my colleague from Washington State and another strong 
advocate for America's aerospace workers.
  Our country invented the aerospace industry 100 years ago. Through 
it, American workers have done more than feed their families and pay 
for mortgages; they have made air travel safer and brought economic 
growth and innovation to every corner of our economy.
  Many in this body have heard me talk for years about Europe's efforts 
to distort the commercial aerospace industry. In short, Airbus has done 
everything it can to kill our aerospace industry. Airbus has received 
billions in illegal launch aid. Airbus has tried

[[Page S3404]]

to play tricks on this side of the ocean with their slick PR campaign. 
And Airbus will continue the unfair tactics until they completely 
dominate the global aerospace market.
  While Airbus is doing all of these things to hurt American workers, 
it is actually trying to get us to think they are a friend to the very 
men and women they are putting out of work.
  Unfortunately, EADS, Airbus, and European governments will do and say 
anything to dominate the global aerospace market. I am here today to 
call their bluff and show this body, once again, that Airbus is no 
friend of the United States or our workers and to ensure that their 
doubletalk is exposed for all to see.
  I have worked closely with several U.S. Trade Representatives on this 
issue over the years. For the past several months, the United States 
has tried to negotiate with the Europeans, but it is very clear that 
the Europeans do not take our concerns seriously. Those discussions 
appear to have broken down, and the Europeans are threatening a radical 
escalation if we pursue our right to file a WTO case.
  You would think after all Airbus has done to kill American jobs, they 
would at least make a good-faith effort now that we are finally calling 
them to account for their behavior. But the Airbus and European leaders 
have done just the opposite. They have pounded their chest about how 
their latest subsidized plane will dominate the industry.
  Instead of coming clean--or at least stopping their trade-distorting 
behavior--Airbus has sought to influence public opinion. They have 
pursued a deceptive public relations campaign. They have taken out ads 
in the Capitol Hill publications and major newspapers around the 
country, just like the one behind me.
  Airbus claims to be a good friend of American workers, but it is 
selling to America's sworn enemies. Airbus claims to support hundreds 
of thousands of American jobs, but they cannot document them. Airbus 
claims it wants to be a more American company, but then it turns and 
preaches European domination when they think we are not looking.

  We need to stand up for this unfair competition and send a strong 
signal to the Europeans that this Congress and this country will not 
allow a European-subsidized company to destroy America's aerospace 
industry.
  They can talk out of both sides of their mouth all they want, but I 
am here to lay the facts on the table and to stand up for our workers.
  Mr. President, I applaud the Bush administration, and specifically 
Ambassador Robert Zoellick, for the work they are doing to end unfair 
trade practices in the aerospace industry. This administration entered 
into negotiations in good faith. They wanted to restore balance and 
fairness to the commercial aircraft trade.
  Unfortunately, Europe has never taken these talks or this issue 
seriously. Our willingness to seek a negotiated settlement has been 
greeted by more arrogant entitlement from Airbus and its European 
backers. While publicly committing to negotiations, Airbus and European 
leaders have been working behind the scenes to continue subsidies to 
Airbus in spite of U.S. threats to file a WTO case.
  Now European Commission Ambassador John Bruton is saying, `` . . . 
one result of a case would be that maximum aid would be given'' for 
Airbus's new A350.
  Today, this campaign is more directly than ever in Congress's line of 
sight. I hope to clearly show Airbus is not an American company and 
Airbus is simply continuing its policy of saying and doing anything to 
get what it wants.
  A week ago last Friday, European Union Trade Commissioner Peter 
Mandelson wrote an eye-popping piece in the Washington Post. He, once 
again, restated baseless accusations against Boeing in an effort to 
justify billions of dollars in illegal Airbus launch aid.
  The issue Mandelson correctly identifies as central to American 
concerns is the massive subsidies in the form of launch aid, landing 
rights, and other giveaways that European governments give to Airbus. 
Now the Europeans would like you to think that we offer similar 
subsidies to Boeing, but the facts simply don't line up. I don't need 
to talk at great length about the subsidies tonight, but I think it is 
worthwhile to make you all understand what those subsidies actually do.
  European governments give Airbus huge direct subsidies to build new 
airplanes. These subsidies take the form of launch aid, supplier 
subsidies, R&D subsidies, and facilities subsidies. These subsidies 
create an uneven playing field and allow Airbus to do what normal, 
private companies cannot afford to do. They develop new products 
without any risk.
  One American company is playing by traditional business norms--
borrowing money at commercial rates, being responsible to shareholders, 
and knowing if they don't make a profit, they are in trouble. That is 
why Boeing ``bets the company'' when they develop a new plane. Airbus 
enjoys virtually a risk-free product development, and it operates far 
outside of the bounds of fair competition. All of this comes at the 
expense of U.S. companies and American workers.
  What does that mean in real terms? Let's take the new superjumbo 
Airbus A380 as an example. According to a January 20 article in the 
Financial Post, titled ``The Airbus 380,'' A380 subsidies are 
officially at $4.3 billion. Other estimates put it at over $6 billion.
  The same day, the independent newspaper said:

       To break even on its own investment, Airbus needs to sell 
     250 of the A380. To repay the four governments it needs to 
     shift to 700. To count as a real commercial success, Airbus 
     needs to sell twice that number. So far, it has firm orders 
     for 149.

  It is no wonder that last summer respected industrial analyst Richard 
Aboulafia of the Teal Group called the plane a ``bloated airborne 
welfare queen.''
  No other company in the world would be able to handle such huge cost 
overruns. But Airbus can because if the plane fails, they will simply 
write off the costs and move on to the next one.
  To make matters worse, they have been making outlandish claims in 
this country for years. First, they claim Airbus has created and 
supports 120,000 jobs in this country. The Commerce Department can only 
document 500. Airbus says it subcontracts with as many as 800 firms in 
the United States, though they have moved that number up and down over 
the years. The Commerce Department can only come up with 250.
  This last week, our Commerce Department released an exhaustive study 
done at the request of this Congress on the U.S. jet transport 
industry. That 150-page report once again comes to the same conclusion 
we have heard time and time again. Airbus is not an American company, 
and Airbus does almost nothing to support the hundreds of thousands of 
American workers who depend on this important industry.
  Airbus and EADS are not helping America's aerospace industry; they 
are destroying it. In 15 years, 700,000 American workers have lost 
their jobs while Europe keeps adding new workers to the EADS and Airbus 
payroll. That is simply unacceptable.
  Looking at their claims in American press alone, Airbus appears to be 
a pseudo-American company looking to create more jobs and helping to 
grow our economy. That is not the real story. Take a look at what 
Airbus proprietors say in Europe when they think we are not looking. A 
few months ago, with a lot of pomp and circumstance, the latest 
European Airbus product, the A380, was unveiled with four heads of 
state. Their comments show Europe's true intentions.
  From the Spanish Prime Minister, Jose Luis Rodriquez Zapetero:

       The European Union has built the plane that is the standard 
     bearer for European and global aeronautics.

  He went on to boast:

       What we see here today is Europe cannot be stopped.

  He is saying that Europe, not a company, cannot be stopped.
  From the French President, Jacques Chirac:

       It is a technological feat and a great European success. 
     When it takes to the skies, it will carry the colors of our 
     continent, and our technological ambitions to even greater 
     heights.

  From the British Prime Minister, Tony Blair:

       It is European cooperation at its best. Airbus demonstrates 
     that we can achieve more together in Europe than we ever can 
     alone.


[[Page S3405]]


  Finally, the German Chancellor, when asked about subsidies to Airbus, 
said:

       We have done that in the past, we are doing it now, and we 
     will do so in the future.

  This does not sound like a company bent on doing anything for 
American workers, but, again, that is what Airbus and its supporters 
are saying and doing to get what they want.
  Unfortunately, the examples only continue. I do not have to look any 
further than the NBC Nightly News to find another shocking attack on 
American values and workers. For years, Airbus told us they will do 
anything to get a deal, and apparently they will sell to anyone. Not 
long ago, NBC News uncovered direct evidence of Airbus efforts to sell 
military aircraft to a country focused on destabilizing and undermining 
American interests in the Middle East, a country that is currently in 
the pursuit of nuclear weapons, a country to which no real American 
company would dare sell weapons.
  NBC News was able to get a camera crew into an airshow in Kish, Iran, 
and they found EADS pitching their military helicopters to Iran.
  I ask unanimous consent that the full transcript of the NBC story be 
printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                  European Firms Display Wares in Iran

              [By Lisa Myers & the NBC Investigative Unit]

       Kish, Iran.--As President Bush pressures European allies to 
     get tougher with Iran, NBC News got a rare glimpse inside the 
     country--at an Iranian air show attended by some of the 
     world's leading military contractors eager to do business 
     with America's adversary.
       On the island of Kish, mullahs mixed with Ukrainian 
     generals amid photos of the Ayatollah Khomeini. Iran's 
     contempt for the United States was clear--emblazoned 
     underneath a helicopter, in Farsi: ``Death to America.''
       It's generally illegal for American companies to do 
     business with Iran. But NBC News found more than a dozen 
     European defense and aviation firms eager to fill the void. 
     Some do business with the Pentagon, yet they were actively 
     selling their wares to Iran.
       ``We sell to Iran [sic] Air Force,'' said Francois Leloup 
     from Aerazur, a French company that markets fighter pilot 
     vests, anti-gravity suits and other protective gear for 
     military pilots.
       ``We sell mainly to security people like police,'' said 
     Arnaud Chevalier with Auxiliaire Technique, which was 
     representing a group of companies at its exhibition booth. 
     Some of the brochures on dispay showed tank helmets, 
     communication systems for light armored vehicles and an 
     ``infantry headset.'' Chevalier said such equipment was ``not 
     for sale.''
       NBC News showed our video from the air show to arms expert 
     John Pike, director of the nonprofit organization 
     GlobalSecurity.org.
       ``I think that the Europeans would sell their grandmothers 
     to the Iranians if they thought they could make a buck,'' 
     says Pike.
       Also exhibiting at the show--European Aeronautic Defence 
     and Space Company (EADS) and its subsidiary Eurocopter--which 
     has launched a campaign in the United States to get a bigger 
     share of Pentagon contracts, featuring ads that wrap the 
     company in the American flag.
       But if the company is so pro-American, why is it ignoring 
     U.S. policy to isolate Iran?
       ``As a European company, we're not supposed to take into 
     account embargoes from the U.S.,'' says Michel Tripier, with 
     EADS.
       ``The emphasis here is on our civil helicopters. We are not 
     offering military helicopters here,'' he adds.
       Yet, prominent on the company's video in Iran--a military 
     helicopter.
       ``It says `Navy' in their own promotional videotape,'' says 
     John Pike. ``I guess they're hoping Iran's navy is going to 
     want to buy it.''
       EADS says the helicopter just happened to be on the video, 
     and that it abides by U.S. and European rules against selling 
     military goods to Iran.
       Another company, Finmeccanica, recently won a contract to 
     build a new version of the presidential helicopter, Marine 
     One, as part of a group led by U.S. contractor Lockheed 
     Martin.
       It was also in Kish showing off its helicopters to Iran.
       ``This company is building the American president's new 
     helicopter, and they're trying to trade with the enemy!'' 
     exclaims Pike.
       Steven Bryen used to be the Pentagon official responsible 
     for preventing technology from going to countries like Iran. 
     Now he's the president of Finmeccanica in the United States. 
     Does he think Iran is an enemy of the United States? .
       ``I think they're our enemy at this point,'' says Bryen. 
     ``I mean, they're behaving like our enemy.''
       So why would Bryen's company trade with an enemy?
       ``In Europe, they don't call it the enemy,'' he says. ``If 
     it's a civilian item that doesn't threaten anyone, then I 
     don't have a problem with that.''
       European subsidiaries of NBC's parent company, General 
     Electric, have sold energy and power equipment to Iran, but 
     GE recently announced it will make no new sales. (MSNBC is a 
     Microsoft-NBC joint venture.)
       Still, even with the president now pushing hard to isolate 
     Tehran, European allies are likely to continue their role as 
     what one company called, ``a reliable partner for Iran.''

  Mrs. MURRAY. I will read just a bit from that piece:

       Also exhibiting at the show, European Aeronautic Defence 
     and Space Company, EADS, and its subsidiary Eurocopter, which 
     has launched a campaign in the United States to get a bigger 
     share of Pentagon contracts, featuring ads that wrap the 
     company in American flag.
       But if the company is so pro-American, why is it ignoring 
     U.S. policy to isolate Iran.
       As a European company, we are not supposed to take into 
     account embargoes from the U.S., says Michael Tripler, with 
     EADS.

  Michael Tripler, from EADS, once again, saying and doing anything 
anywhere to advance the European interests of a European company. 
Airbus and EADS clearly sing one tune in newspapers in the United 
States, another at media events in France, and quite a different one 
while selling their products in Iran.
  Taken together, the goal is clear: EADS and Airbus do not intend to 
stop until they have gobbled up the entire aerospace market.
  So what is next for Airbus? Any question of their intentions was 
answered as we tried to work out an amicable solution to the dispute 
this past January. On a day that could have been a turning point in the 
process, Airbus CEO Noel Forgeard said he would seek new launch aid 
from European nations for the Airbus A350.
  While in one breath Airbus says it does not need launch aid to build 
the A350, they have nevertheless applied for, and European governments 
are prepared to provide, $1.7 billion in new launch aid.
  To once again paraphrase German Chancellor Schroeder: They have done 
that in the past, they are doing it now, and they will do so in the 
future.
  But again, no need to take my word alone on the illegality of the 
launch aid or their central role in the ongoing dispute. The Financial 
Times, a European newspaper, called the plan to subsidize the A350 and 
Forgeard's announcement unwise and deeply unhelpful, and went on to 
say:

       Launch aid, Airbus' unique subsidy, is an especially 
     blatant violation of the principles of fair competition. The 
     EU should let it go. State support for private companies, 
     even those with long lead times and big development costs, 
     becomes indefensible as they mature. Infant industries must 
     grow up.

  In a Business Week commentary from the same week, Stanley Holmes 
writes:

       The U.S. should call the Europeans' bluff. Let the facts 
     speak for themselves, and resolve this dispute at the WTO.

  Months ago, I made the same suggestion, and although there appeared 
to be hope of avoiding that fate within the past few weeks, I now 
believe we must work through the WTO and hold our line.
  With the Europeans bent on keeping their subsidies, it is time to 
take bold action to protect our workers and send a strong message to 
Europe that enough is enough. Europe has to understand that continued 
attempts to undermine our aerospace industry and its workers will not 
stand.
  The need to restore a competitive balance to the aerospace industry 
is not going away. Thousands of American jobs have been lost in the 
last decade, and thousands more are at risk due to continued direct 
subsidies to Airbus.
  I will continue to work closely with the USTR and with the Bush 
administration to protect American jobs and ensure the future strength 
of the American aerospace industry. Whether through the continuation of 
these negotiations or through a trade case at the WTO, a competitive 
balance has to be restored. We in Congress have to show the Europeans 
that we are serious about this action.
  I thank my colleagues for supporting the resolution that was just 
adopted by the Senate 96 to 0. I will continue to be a voice for 
American workers. Again, I thank the Bush administration, Senator 
Frist, and Senator Reid for helping us with the resolution.

[[Page S3406]]

  Mr. INHOFE. Will the Senator yield for a comment before yielding the 
floor?
  Mrs. MURRAY. I would be happy to yield.
  Mr. INHOFE. I have been listening intently, and I applaud the Senator 
for all she has done. It is reminiscent that this is not something new. 
Back when I was serving in the other body in the late 1980s, 
Congressman Jim Oberstar and I actually made a trip to Europe--that was 
before the European Union days--both to Germany and France to find out 
the level of subsidy they had. At that time, we were not able to find 
out, and we did an exhaustive search. They were denying that they did, 
and later on they admitted they were subsidizing. With their type of 
accounting, perhaps it is even worse than the figures the Senator is 
expressing today. So I applaud the Senator for her efforts.
  Mrs. MURRAY. I thank the Senator, and I look forward to working with 
him to fight for our aerospace industry and to make sure companies in 
this country have a fair playing field.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Oklahoma.

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