Re: Subsidies ...

From:         khowie@accessone.com (Keith Howie)
Organization: AccessOne
Date:         21 Mar 96 02:38:05 
References:   1 2 3
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mezei_jf@eisner.decus.org (Jean-Francois Mezei) wrote:

>Excuse my ignorance, but could someone *PLEASE* post a comprehensive list of
>the members of that consortium and a note on whether each member is:
>	-privately held
>	-crown corporation (shares owned by government)
>	-division of government (operates out of govt budgets)

This sort of information is readily available to anyone who wants to
got to the trouble of looking it up, but here goes again:

Airbus members are:
(1) Aerospatiale, owned by French government. Consistent money-loser,
but government has plans to fix that by merging it with Dassault, a
privately held company which just as consistently makes money. Has a
37.9 per cent stake in Airbus.
(2) Daimler-Benz Aerospace, private German company, also has a 37.9
per cent stake in Airbus. Generally well-run but just lost its shirt
on the Fokker fiasco.
(3) British Aerospace, private British company, has a 20 per cent
stake in Airbus. Just came off one of its most successful years ever,
capping one of the most amazing comebacks in British business history.
Company's CEO quoted in today's (March 1) Wall Street Journal as
saying that until Airbus gets its house in order, it should forget
about the AXX.
(4) CASA, a Spanish company, has a 4.2 per cent stake in Airbus. I
don't know what its ownership is.

>As I understand it, a consortium is a bunch of companies getting together to
>build something. A consortium does not necessarily mean that it is government
>owned or controlled.

Airbus is legally, under French law, a "Groupemente d'Interet
Economique" (CIE, or "grouping of economic interest"). As such,
partner companies can join together without actually merging. No
financial reports are required to be made public. This is one reason
why discussions on Airbus subsidies often generate more heat than
light. Nobody knows the facts. If you want more detailed infromation,
go hire a French lawyer.

>Just because the EU governments decided to team up and produce something which
>could compete against the USA and gave mandates to selected companies to get
>together and build something...
(snip)

I don't think this is an accurate description of what actually
happened, but I don't want to get into a squabble about it.

>So, until someone posts a comprehensive list of members of Airbus, and
>what type and how much of government financial help was given out, it is rather
>pointless to debate Airbus based on the urban myth that it is government owned,
>government controlled, subsidised to the neck, highly inefficient, staffed by
>bureaucrats etc etc etc.

The Wall Street Journal article mentioned above alludes to some of the
problems with the Airbus legal structure and how those problems are
affecting the AXX decision. Anyone who is interested should read it in
its entirety, but I'll try to summarize as follows: The AXX will take
9 to 12 billion US dollars to develop. Only a third of that can come
from government assistance per the US-EU agreement on such matters.
Private investment will be necessary but potential investors don't
like the present Airbus legal structure. A committee is studying the
problem and is to make its report in June.

Keith