Group #6 Cleber Hamada, Raghav Malhotra, Alejandro Chinchilla, Mayank Mittal & Kristoffer Sletten

Introduction

-The world's leading aerospace company-Boeing Commercial Airplanes

-Boeing Defense, Space & Security-Operations in more than 70 countries-Customers in more than 90 countries

-Revenues of 68,281 M (2009)-Private company traded and listed in the U.S.

-Largest U.S. exporters in terms of sales-Headquartered in Chicago-Employs 160,000 people

Employment By Location June 24, 2010

Alabama 2,798

Arizona 4,715

California 23,759

Kansas 2,259

Missouri 15,55

Pennsylvania 6,145

Texas 5,666

Washington 72,077

Other Locations 26,887

Total Company 159,856

Indirectly supports in additional 600,000 jobs nationwide – e.g. subcontractors

Culture & values

• People are Boeing's most vital asset• Non-discrimination and harassment• Freedom of association• Environment, health and safety• Work environment and compensation • Hours of work and work scheduling• Expectation for suppliers • Forced labor and child labor

Trade Dispute• USA vs Europe

• 1980’s Airbus obtained all its capital from European government to launch new aircraft.

• A large amount of Airbus subsidies have been channeled toward the development of commercial jets.

• 1970-90 Airbus received $26 billion.

• 75% of development cost was provided by European government.

Competitive Advantage• Heavy discounts ranging anywhere from 10 to 35% for the Airbus

customers

• Airbus finances 80% directly @ 7% over a 10 year period

• Boeing finances only 40% directly @ 8.5% over a 10 year period

• Favored by European airline as it appears from the order book of A380

• The motive of subsidies is to displace the sale of Boeings, constituting serious prejudice to the interests of the United States

• $240 million for the 747-400 or 747-400ER

• $250-$280 million depending on the configuration for the A380

• Airbus has a seating capacity of 800 passengers as compared to Boeing’s 450 passengers

• Airbus has unfair competitive advantage using the subsidies thereby

Today

•WTO concluded that Airbus used subsidies from France, German, Spain and Britain •Airbus took market share illegally•At interest rate of 15% to 16% in the early years, Airbus would have accumulated a massive level of debt•WTO requested that EU help European companies without adversely affecting American Companies

Conclusion

• In all, both Boeing and the United States Trade Representative consider this a victory.

GUILTY

References

• HILL. W. L. C., International Business, competing in the global marketplace, McGraw-Hill companies, New York, 8th edition.

• http://biggovernment.com/capitolconfidential/2010/07/08/wto-delivers-victory-for-boeing-us-trade/

• http://online.wsj.com/article/SB10001424052748703426004575339043833914292.html

• http://www.reuters.com/article/idUSLDE6531QZ20100630 • http://finance.yahoo.com/q?s=BA • http://www.boeing.com/companyoffices/aboutus/• http://www.nytimes.com/2010/07/01/business/global/

01wto.html?_r=2• http://airbusa380.tripod.com/id4.html