UPDATE: Boeing offers subsidized helo to White House

European launch aid for the Airbus A330 — also known as KC-45 for the KC-X contract — makes Boeing’s supporters in Congress very upset. Some have proposed to legally restrict the Department of Defense from buying any aircraft that was launched with subsidized loans from European governments.

Now Boeing proposes to replace the presidential helicopter fleet with a licensed, US-made version of the AugustaWestland AW101.

We know the AW101 also benefited from launch aid. See transcript of 1992 discussion in the UK House of Commons:

EH101 Helicopter

3. Sir Jim Spicer : To ask the President of the Board of Trade what proposals he has for methods by which Her Majesty’s Government can enhance the sale prospects of the EH101.

Mr. Sainsbury : My Department has provided £60 million of launch aid for the civil version of the EH101. We shall help to promote export sales of the civil version through our overseas trade services and we are ready to respond to any requests for assistance in pursuing civil export sales prospects.

Update: EADS NA has released a statement about Boeing’s announcement.

“We’re pleased that Boeing has openly acknowledged thecontribution that international teams, products and platforms make to U.S. nationalsecurity. For several years, Boeing and its allies have been harshly criticalof the participation of EADS North America in the KC-X tanker competition. Withthis announcement, we now expect Boeing to cease its shrill rhetoric andfinally allow the KC-X competition to focus on the merits of the tankerofferings.”


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13 Responses to UPDATE: Boeing offers subsidized helo to White House

  1. Lightndattic 7 June, 2010 at 3:15 pm #

    Remember folks… when you point the finger at someone, there’s 3 pointing back at you.

    I’m sure our hypocritical elected leaders will come up with some reason why this shouldn’t be considered a subsidy.

  2. Rocketist 7 June, 2010 at 3:36 pm #

    That reminds me – when is the WTO ruling due in the case EU versus Boeing on illegal subsidies?

  3. Aurora 7 June, 2010 at 5:05 pm #

    The A330 was developed with government subsidies for the commercial market. The EH 101 was developed as a military helicopter. All military programs are by their very nature “subsidized”.

  4. Matt 7 June, 2010 at 5:38 pm #

    Breaking News:
    LM to develop subsidized F-35 fighter!

  5. Jimmy 7 June, 2010 at 6:25 pm #

    Supporting our British ally in the form of the EH-101 is a good thing, as opposed to other Europeans.

    Maybe Sikorsky needs to add an engine to S-92.

  6. George Zip 7 June, 2010 at 6:45 pm #

    The question of military vs. civil ‘subsidies’ is at the heart of the Boeing-Airbus spat, but the EH101 itself was developed from scratch as a dual-use platform. For most of the 1980s EHI was predicting sales of 250 civil variants over a 20-year period (representing one-third of anticipated EH101 sales), although the target S-61 replacement market was ultimately cornered by the cheaper S-92 and AS332/EC225.

    A bigger potential embarrassment for Boeing is surely Italy’s unabashed funding of Agusta in defiance of ECJ warnings, such as for development of the ‘paramilitary’ BA609.

  7. Dimitris 7 June, 2010 at 11:05 pm #

    You’ll sing a different tune if the “other Europeans” get sick enough of your protectionism that they abruptly cut down their purchases of US-origin equipment to the bare minimum.

    Be careful what you wish for.

  8. POG 8 June, 2010 at 1:07 am #

    EH-101 is a military aircraft whose development was entirely paid for by UK and Italian taxpayers. The vast majority of military aircraft development is 100% government funded. How do you subsidize something that was developed under a government contract?

  9. Stephen Trimble 8 June, 2010 at 1:16 am #

    Perhaps we’re unnecessarily splitting hairs. The UK provided £60 million in launch aid to allow AgustaWestland to compete against other manufacturers, including Sikorsky, on the civil market with this aircraft. It may the civil version, but it’s still the same aircraft. If Boeing has complained about the fundamental legality of launch aid, and made it an issue in military aircraft competitions, it’s fair to ask why Boeing now doesn’t think the same standards apply for the presidential helicopter contract.

  10. Obamanite 8 June, 2010 at 1:40 am #

    Something about people living in glass houses… What was that again?

  11. snogglethorpe 8 June, 2010 at 12:22 pm #

    Yeesh, that EADS NA statement is downright cringe-inducing; talk about shrill rhetoric…

  12. Matt 8 June, 2010 at 8:11 pm #

    Did Boeing purchase the rights to produce the military or civil version (since it seems the launch aid was specifically for the civil version)?

    What does a 60M pound subsidy come out to per aircraft compared to the billions that EADS got for A330 development spread over the 700 A330s produced so far?

  13. zeno 9 June, 2010 at 10:38 am #

    funny how things are messed up.

    anyone wonders if they are spending the right money (not more, sure not less) for the right crap? this is what taxpayers are, or should, be interested in and what journalists should focus. imho.

    every single dime spent in the defense industry IS subsidized. defense IS a public/gov matter.

    do we need to get blindfolded in the big corp. fog of PR/lawyers wars?

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