Sarkozy's dubious glory in American Airbus deal

Nicolas Sarkozy has been taking credit for the extraordinary decision by the US Defense Department to buy a fleet of Air Force refuelling tankers worth at least 35 billion dollars from EADS, parent of the the European Airbus company, rather than from Boeing.

The French president said that the deal, which has sparked a political storm in the USA, would have been unimaginable if he had not repaired the damage to relations with Washington that had been inflicted by President Chirac's opposition to the Iraq invasion.

"Could one think for a minute that the contract which EADS has magnificently won... would have been signed in the climate of tension that existed between the Americans and French?" Sarko asked in le Figaro.

Sarkozy is right that his warmth towards the US has eased the chill that prevailed under Chirac. This undoubtedly helped the deal with the European Aeronautic, Defense and Space company. But he could be a little more modest. EADS' American contract was the fruit of years of effort, most of it before he won office last May. On top of that, the US order conflicts with his own doctrine of "economic patriotism".   

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Sarkozy tends to see EADS and Airbus as essentially French. It is a Dutch-registered firm, headquartered in Munich and Paris with its Airbus division based in Toulouse. The corporation is controlled by 45 percent Franco-German holdings. The French state has 15 percent. The American contract, in which EADS and Northrop Grumman, its US partner, will assemble the Airbus tankers in Alabama, was won after a skilfull seven-year sales push by EADS' international executives and European politicians.

The star in the deal was Ralph Crosby, an American veteran of the plane-making business who heads EADS in the USA. Sarkozy came late into the negotiation, making pitches to Washington last October and November. Other European leaders had already been lobbying Washington, notably Tony Blair and Gordon Brown of Britain and Angela Merkel, the German Chancellor. EADS-Northrop say 60 percent of the Airbus tankers will be of US origin and 25,000 US jobs will be created.

Great credit has to go to the US Defense Department for picking what it said was the better aircraft by four out of its five key criteria rather than taking the more patriotic option. It is inconceivable that Sarkozy would ever allow the French Defence Ministry to order billions of euros of military equipment from an American company at the expense of a French-European manufacturer. Sarkozy is an interventionist whose patriotic approach means that French and European commercial interests must have priority over foreign ones.

Of course similar loyalties are driving the outrage against the EADS-Northrop tanker in the US. Depriving Boeing and its suppliers of 44,000 future jobs was an act of folly, say the US opponents, who include Hillary Clinton and Barack Obama.   John McCain, the Republican nominee-in-waiting, is taking heavy damage for his role in scuttling a 2003 Pentagon contract with Boeing for the tankers after it was revealed to have been corruptly negotiated. 

"I hope the voters of this state remember what John McCain has done to them and their jobs," said Norm Dicks, a Democratic Congressman for Washington state, Boeing's manufacturing base.

The EADS contract could still collapse if Congress blocks funding. Yesterday's New York Times had a good editorial making the point that it remains in America's wider commercial and diplomatic interests to honour it. "Reversing the decision on 'Buy America' grounds would be bad all round," it said. 

And a footnote: The Financial Times revealed this week that France and Germany are close to changing EADS' corporate by-laws to prevent foreign investors building large stakes in, or taking over the flagship company.

There have been signs that Arab and Russian interests are seeking power in the firm. Dubai International Capital bought 3.1 per cent last summer, and VEB, a state-controlled Russian bank, took a 5 per cent stake in December. At the moment the 45 percent control is owned by Lagardère, the French media group, Daimler, the German carmaker and the French state. The plan is to stop any non EU outfit buying more than 15 percent of EADS shares.

Comments

[Monika]

That is so typical Sarkozy to credit himself with the achievements of others. Just remember the incident of the Bulgarians in Lybia.

From my years in France working in the aeronautical sector, I may say that not only Sarko sees Airbus as French, but this is common view by his compatriots.

Unlike Ariane that is still European but admittantly paid to about 45% by France, there is absolutely not one single valid argument that allows them to make Airbus a French thing. That the HQ is in Toulouse just shows that they are very clever in getting things done their way.
Unfortunately they manage to get their view accepted by outsiders far too often.
I guess Sarko is playing this card with the elections just ahead ...

[Michael Robertson]

This represents a stunning victory for EADS in its continuing “war” against Boeing to supply the world with large transport aircraft.

The Airbus tanker is based on the A330, which is more efficient than the ageing Boeing 767, on which the Boeing contender is based. Also, the proposed assembly plant in Mobile Alabama is tied in with a deal to manufacture the A330F freighter version of the A330 airliner, which would have been hard to justify on its own, but combined with the Tanker assembly makes perfect sense for EADS. Its quite possible that this may lead to some Airbus airliners being manufactured in the US as well, as the costs to EADS would be priced in cheaper US$, whereas it currently incurs its manufacturing costs in expensive euros, whilst selling all its airliners in depreciating US$, which has cost it dearly over recent years.

The political aspects of this deal are extraordinary, though it is easy for the USAF to justify in terms of efficiency. Had this decision been taken in 10 years time when the contest might have been between derivatives of the Boeing 787 and the airbus A350, which are very closely matched, it would have been a very close run thing. However, the Boeing case was weakened back in 2003, when the original contract with Boeing was cancelled, once “kickback” deals between negotiators had been uncovered, and I suspect that the choice of Airbus to supply these tankers was taken as much as anything else, in a move to punish Boeing . However, this may not be a “done deal” as Boeing, along with its associated political allies in Seattle are not likely to take this lying down, and are sure to lodge a request for further information as to how this deal was reached. This will probably “run and run” as they say!

[Daniel Strohl]

"The EADS contract could still collapse if Congress blocks funding.

Yes - therefore, wait and see. However, if the contract is finally awarded and executed, the US will be much more credible with their proclaimed culture of "free market" - this was not particularly obvious in the past when their national interests were in play. Of course, this is also the case with any other country (France included - LOL!)...

"I guess Sarko is playing this card with the elections just ahead ..." (Monika)

Of course. He has not too many other good cards to play right now! However, whether this specific card will have any influence on the elections remains to be seen. I have my doubts - electoral arguments were at grass root level rather than flying high in the skies of rebuild French-American friendship.

[Daisy]

One wishes he would claim responsibility for his errors just as willingly.

[Mauvezin]

> Monika
You're doing a "querelle d'allemand" !

[Ros]

Mauvezin: What is a "querelle d'allemand"?

[Mary Fernandez]

The State of Washington would never have voted for McCain anyway, so it's not really a loss. I'd be more worried about the jobs lost in Kansas.

It's the Democrats who are economic protectionists, and they aren't McCain voters. McCain can always spin the EADs contract as eliminating corruption and pork while looking after the best interest of the soldiers. That's economic conservatism and patriotism all served up together. In addition, 60% is American made so it's just a matter of which States get the jobs. What's the difference between a toyota truck that is 60% made in America and a tanker that is 60% made in America? Not much.

As for Sarkozy, throw the man a bone. He's having a hard time lately.

[alan morgan]

Sarkozy, claiming credit for the achievement of others: further demonstrates that above all he is a vulgar man, lacking the " comportement " compatible with his station in life. Personally I feel let down by this man who I had such high expectations for.

[Romain]

The New York Times is definitely getting better and better, distancing itself from the all American rethoric. A majority of marketing people I met at Airbus Toulouse were British, but I don't see how Tony Blair and Gordon Brown get in the picture. Quite amusing to see that political broil "à la française" in USA, we have a lot in common after all.

[John Gregory Flinn]

Indeed EADS has secured a valuable contract by its considerable and laudable efforts. And it is an extraordinary decision because the US rivals France for the nation with the most nationalistic attitude towards its industry!

I'm just wondering how the recent strength of the Euro against the US $ may affect progress of the contract. This might be a loophole for the US to vary the terms of the deal if, for example, Congress finds that dollar (stage) payments are going through the roof.
I hope not, because this deal really puts EADS ahead of its rivals.
But it does need to stay out of reach of the Sovereign Wealth funds. All those petro-dollars are going to be looking for a home somewhere.

Perhaps EADS should change its name from the acronym to something more aeronautical....

[azloon]

all that's left is for sarko to stage a landing of the aircraft at charles de gaulle, he emerging in flight gear before pronouncing 'mission accomplished, all the while giving the photographers a double 'thumbs up."

and while we're getting carried away here, how about carlita running out onto the runway, a al casablanca, to greet her hero husband.

le fin.

[Dominique]

Sarko once again tells us that making money is more important than having values.

Once again the very opposite of what he claimed during the campaign. Poor little man

[Daniel Strohl]

Dominique,

I am glad to hear from you again, in the same familiar tone .) I was already wondering whether the Berliner subway strikers were holding you back as a (foreign) hostage, à la FARC ...

Azloon,

At the end of the movie, there is "FIN".

Otherwise, it is "la fin". And if you are hungry, vous avez "faim" ...

[Mary Fernandez]

Hola, mi amigo AZLOON -

Carlita did run up and give him a glass of water during a luncheon speech on exceptional women today. Perhaps a 'hill of beans' was on the menu?

(I'd prefer he do a Harrison Ford Air Force One turn: "I'm the President of France! Get off my plane!")

[Romain]

[The plan is to stop any non EU outfit buying more than 15 percent of EADS shares.]
You cannot separate aeronautical industry from military on either side of the Atlantic. The refuelling tanker plane is a typical example of a hybrid commercial/military aircraft.
Same goes with Eurocopter, a subdivision of EADS, world leader in its market segment.
I guess you would'nt want to see Russia nor China buy any control on EADS.

[Pierre Bernardi]

Unlike the FT to run a rumour on its front page. Either the news is very big, or very important. If the news were big, it might have been run on the second page as a way of hedging bets. If the news were very important, we might question the paper's motives. Why should Pearson, a media group, side with the US defence industry? Why should the FT move from ostensibly neutral to hostile? And what are Charles' shareholdings in Boeing?

[Dominique]

D Strohl,

I'm back! i spent a complete February in Berlin, the true city for bicycles! Eventhough the Velib concept is interesting, riding bicycle is much safer in Berlin. At least for riders, maybe not for pedestrians!

[phoebe hertzog]

J'ecris peu souvent des commentaires ici, ceci dit je me sens très attachée a la petite communauté d'ici qui gravite autour de Charles Bremner et ses articles, j'aspire à être française mais je sais pertinament que quoi qu'il arrive j'aurais toujours aufond de moi un soupçon de "britishness" et c'set reposant de lire les commentaires des gens d'ici et de comprendre d'un trait ce qu'ils veulent dire.
Je propose donc une rencontre once the weather clears up for good maybe a picnic at the luxembourg gardens open to all who feel like comming. feel it could be a nice afternoon.
If anyone has any suggestions (and if charles excuses me pour detournement du blog pour raisons quelconques) I would be absolument ravi de les entendre.
Bon Dimanche

Une anglo française une franco anglaise /

[azloon]

Daniel --

merci pour la lecon!

i either haven't seen a french movie in a long time, or i saw one more recently and can't remember (CRS syndrome).

la fin, le fin. what's a gender error among friends.

:)

[azloon]

Mary H.

"Harrison Ford's Air Force One"

i am putting this one at the top of my Netflix queue.

how about:

"Get off my plane, pauvre con !!"

Or:

"this is my plane and i can fly if i want to" (Leslie Gore tribute -- if under 50, please consult wiki)

"the plane truth is, i am a frigging genius"

"do you think we would have got this contract if i hadn't gone to congress and blown hot air up their asses?

i welcome further entries.

[Edward Johns]

Let's give Sarko a break, he's only doing what politicians and the ambitious in general always do I.E. claiming credit for the achievements of others.
A few years ago it was claimed that Shakespeare was a frenchman
(an Anglophone corruption of
"Jacques-Pierre" was asserted); De Gaulle evidently won WW2 and in some quarters only US forces took part in the same war on the allied side! It's not a perfect world, after all.

[Daniel Strohl]

Dominique,

"riding bicycle is much safer in Berlin. At least for riders, maybe not for pedestrians!"

What is your score of hit pedestrians? LOL!

Azloon,

It took me some time to remember what CRS means ... CRS is a very insidious disease!

I used Google to translate your posts from Spanish to French - the result is not bad for an automated translation. I think that their method - accumulate human made translations and exploiting them - is better than the standard method based on (highly complex) rules. But Google did not invent this principle.

PS : comments regarding the DVD follow within a few days

[Lily]

CRS:

http://www.acronymfinder.com/af-query.asp?Acronym=CRS&string=exact

Sarkozy's life was turned upside down! Could there not be a little mercy while he tries to mormalize his life!

[The 3rd Column]

"Could one think for a minute that the contract which EADS has magnificently won... would have been signed in the climate of tension that existed between the Americans and French?", i.e., during the US anti-France rampage season in the run up to the invasion of and war on Iraq?

Answer: As one who works in the defence industry sector and well aware of the immense US defence lobby power, the answer is NO!

[Mary Fernandez]

AZLOON-

Carlita could introduce the pilot with "Say hello to my little friend." (Al Pacino/Scarface)

[azloon]

[It took me some time to remember what CRS means] Daniel

when it takes awhile to remember what CRS means, you've got it (as i am sure you are inferring).

Sa mémoire est la deuxième chose on perd.

i can't remember the first. :)

[Dominique]

Anonymous Posted by: | 9 Mar 2008 20:55:01

"Sarkozy's life was turned upside down! Could there not be a little mercy while he tries to mormalize his life!"

How long does he need? one month? one year? 10 years? Is France suposed to wait for him or is he supposed to do his job?

If he is no longer capable of, then, we may use article 7 of the constitution. President is a serious job.

"En cas de vacance de la Présidence de la République pour quelque cause que ce soit, ou d'empêchement constaté par le Conseil Constitutionnel saisi par le Gouvernement et statuant à la majorité absolue de ses membres, les fonctions du Président de la République, à l'exception de celles prévues aux articles 11 et 12 ci-dessous, sont provisoirement exercées par le Président du Sénat et, si celui-ci est à son tour empêché d'exercer ces fonctions, par le Gouvernement.

En cas de vacance ou lorsque l'empêchement est déclaré définitif par le Conseil Constitutionnel, le scrutin pour l'élection du nouveau président a lieu, sauf cas de force majeure constaté par le Conseil Constitutionnel, vingt jours au moins et trente-cinq jours au plus après l'ouverture de la vacance ou la déclaration du caractère définitif de l'empêchement."

[azloon]

Lily

your google link on CRS:

"can't remember stuff (polite version)"

there is no 'polite version' to my knowledge, at least not one i have ever heard.

'Ne me souviens plus merde.'

that's it.

[Pierre Bernardi]

Phoebe Hertzog, may I suggest you merge your efforts with those of the Caledonian Society of France, which is partial to the Shakespeare garden in the Bois de Boulogne.

[azloon]

[Carlita could introduce the pilot with "Say hello to my little friend." (Al Pacino/Scarface)] Mary F.

omg, rotfl

[isobel]

Dominique - I've just heard on the radio that the Germans are experiencing a "greve a la francaise" at the moment...any connection?!

[Dominique]

Isobel,

Yep, i explained it all to them! "How to spoil everyone's life in 4 weeks"

[Monika]

Actually it was just blown off in (or is it 'at'? HELP!) the last minute, Isobel. Both parties seem to be 'tombées d'accord' (j'aime bien cette expression :) 'to fall into agreement' ...).

[qwerty]

Lily: google is better than acronym search. and see:

http://www.learnthenet.com/english/glossary/imho.htm

I even had a problem with LOL, ROTFL and IMO, BTW - easy stuff!

CRS I thought were military police, now I know better.

Re your last posting on the 9/11 post (quite terrifying): we should get whatsisname - Milton? - back in for some more rational-minded explanations.

[Lily]

qwerty,

thanks for the google hint (do you really think it's better??)

Re 9/11 - I keep eyes and ears open for convincing rational-minded explanations :) - Miltonwhat?

BTW I'm still lost on CRS (other than the police) -

[Lily]

PS to qwerty -
Friedman, you're right...

[Lily]

CRS - Azloon had already answered the question. oh well..
(I had been looking for the 'deeper' mystery :))

[qwerty]

Lily:
Yeah...Milton Friedman would be useful. Or was it the writer of "Paradise Lost" I meant?
I've searched among all the ravings on the 9/11 post: I meant in fact Matt Hill (where did I get Milton from???) who sounded sensible and informed. He'd explain those strange sparks in the rue89 video...
CRS: "can't remember the stuff".

[Lily]

qwerty - The Miltons: Both speak of some paradise lost in one way or the other :( -
Matt Hill sounds scientific and comforting, true, but incomplete IMIO (in my ignorant opinion).

BTW: Severe CRS syndrome = Alzheimer's disease