Government Intervention at Boeing and Airbus
Towards the beginning of aircraft manufacturing, Boeing and McDonnell Douglas stood as the leading aircraft manufacturers on a global scale. Working alongside the U.S. Department of Defense, Boeing received multiple contracts aiding the industry with tax breaks and infrastructure support. Meanwhile, Spain, France, Germany, and Britain formed an alliance to help start the second most leading aircraft manufacturer, Airbus. Since democratic socialism was the current system in Europe, it was customary for the government to play such a large role. Thus, Airbus received billions of Euros in subsidies and soft loans from these founding governments. Not only did their money nurture the birth of Airbus,
In order to keep the company’s headquarters in state, Washington has provided significant corporate tax breaks and infrastructure support. State tax dollars are used to make sure doing business is easy in Washington.
At this point, evaluating fairness is pure conjecture. It can be argued that the USA’s lawsuits against European subsidies provided to Airbus are hypocritical, if Washington is offering government benefits as well. Washington operates in a legal grey area when it comes to international trade. As Washington is not it’s own country, it cannot be held to World Trade Organization standards. The US government argues that the tax-breaks and infrastructure development provided by Washington State are miniscule when compared to the billions provided in subsidies and soft loans to Airbus.
Washington’s tax breaks and infrastructure assistance are obviously advantageous for Boeing. Judging whether it gives Boeing an unfair competitive advantage is, again, pure conjecture. It is beneficial to recognize how small such advantages seem when compared to the billion dollar subsidies offered to Airbus and the defense contracts offered to Boeing.
Airbus generates a huge amount of money and employs thousands of people in the world. Currently the European Union is supporting the company financially through multiple loans. The Airbus Company is not responsible for paying back their past debt