Manufacturers
WTO delivers a victory for Boeing in subsidy war
September 23rd 2016
A World Trade Organisation (WTO) compliance panel ruled on September 22 that the European Union had failed to meet its obligation to remedy multi-billion subsidies provided to Boeing rival, Airbus, over the last four decades. Read More » The WTO also said Airbus had received illegal launch funds of US$5 billion for the development of the A350 airliner.
“This long awaited decision is a victory for fair trade worldwide and for U.S. aerospace workers in particular,” said Boeing chairman, president and CEO, Dennis Muilenburg.
A week before the WTO decision was announced, Muilenburg had warned the Chicago-based OEM would post “flattish” sales next year, despite improved profit and cash flows. He suggested Boeing might miss its order target of 740 aircraft this year, having received 355 net orders to date in 2016.
As with Airbus’s A380 dilemma, Boeing may be forced to cut production on its B777 assembly line after selling only eight “Triple 7s” so far this year, way short of its 40-50 target.
Boeing is building 8.3 B777s a month. It has announced a cut to seven a month next year as it shifts to the B777X, which will enter production in 2018. "So, obviously, pressure there," Muilenburg said. "We need to be successful on some (777 sales) campaigns in the next two to three months to hold that seven-a-month rate," he said. "If we don't, we'll have to adjust."
