Setting the record straight on subsidy facts

Boeing also acknowledged the importance of NASA’s support in a 1982 congressional hearing when H.W. Withington, then Boeing vice president for engineering, testified at a Senate Commerce, Science and Transportation subcommittee hearing, stating:

“We have had the privilege of working with NASA since it was originally formed as the NACA organization. Results of their work and cooperation, combined with our in-house research has provided a base for consistent introduction of technology advancements into our product line. We now have the new Models 757 and 767 in the certification flight test process. The NASA participated in significant portions of the research leading to the development of propulsion, structural, flight deck, avionics and aerodynamics advancements in those models. The two models are now offered to the world market in an atmosphere of increasing competition from abroad.”

If NASA and Boeing can admit to government support on the 767 aircraft, then why can’t the Kansas representatives acknowledge that the Boeing 767 program received hundreds of millions of U.S. taxpayers’ dollars in the form of foreign sales corporation (FSC) tax breaks and industrial revenue bonds?

The Boeing 767 also benefited from lower costs by outsourcing to suppliers that span the globe. Many foreign suppliers received favorable financial support from their governments for having new technologies transferred to their country. These incentives allow the foreign suppliers to design, build and test major subsystems at a lower cost which are passed along to Boeing.

Today the huge capital investments required to launch a large commercial aircraft program warrant manufacturers to search the globe to find a competitive edge. Sen. Sam Brownback and U.S. Rep. Todd Tiahrt need to get over their outdated belief that the U.S. has the inherent right to be the only country in the world to produce large commercial aircraft.

Dr. David Pritchard is a research associate at the Canada-United States Trade Center at the University at Buffalo. His research expertise is on the globalization of commercial aircraft manufacturing, including the current WTO E.U.-U.S. aircraft trade disputes.

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