Manufacturers Line Up For "Loans"
The test for development of new aircraft appears to be how much governments are willing to ante up. Earlier this week, Bombardier and Airbus both said they were going to the public trough to fund the creation of new products. And in Canada's Ottawa, there appear to be sympathetic ears. Canada's Industry Minister David Emerson indicated to reporters that Bombardier would get help from the government to build a new class of 110- to 135-passenger jets. The company estimates development costs at $2 billion and wants the bill split three ways, with Bombardier putting up $700 million, suppliers a similar amount and the government coming up with $700 million in "loans." Emerson tried to downplay the suggestion that the government's help was aimed directly at one company. "We will meet any timely deadlines that Bombardier has on a variety of issues but this is not a Bombardier strategy, this is an aerospace strategy," he told reporters. Meanwhile, Airbus also has its hand out to European countries to help fund the A350, a direct competitor to Boeing's 7E7 Dreamliner. The French firm confirmed that it will seek $1.2 billion in loans from European governments. Creation of the airliner is expected to cost as much as $3 billion. U.S. trade representatives have been critical of what they term Airbus's dependence on government participation in their business but Airbus maintains it's no different than the tax breaks Boeing gets from Washington State or the lavish defense contracts it receives that indirectly support its civilian aviation work. The Airbus-Boeing issue appears headed to the World Trade Organization.