This was no longer just negligence, it was dishonesty and as such it went to the heart of the firm's integrity Andersen's death warrant had been signed. Virtually all other civil aircraft manufacturers of any size have fallen by the wayside. Boeing, which once had the market largely to itself, complains of unfair European competition, but just think what it's going to be like when the Chinese enter the international market, as inevitably they one day will. It's hard enough even for two to coexist without state subsidy. It's anyone's guess how it will look with three.Arthur Andersen is innocent, OKIt's a bit late for that now. In what can only be described as a decision of comical irrelevance, the US Supreme Court yesterday overruled Arthur Andersen's conviction for attempting to pervert the course of justice by ordering documents in connection with the collapse of Enron to be destroyed.Up until the point of conviction, it had still been possible to believe that Andersen might survive the maelstrom of abuse and threatened lawsuits that were hurled against it for one of the biggest accounting scandals in US corporate history.
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Andersen was, after all, one of the big five worldwide accountancy practices and to be involved from time to time in a major fraud almost comes with the territory.But to be accused and then convicted of ordering a cover up was something else. The latest battleground is proposed launch aid for the A350, a mid-sized, long distance aircraft that would compete directly with Boeing's new 787 "Dreamliner". Europe offered to cut the aid by a third, but nothing less than no aid at all was acceptable to the Americans.The reality is that neither of these two giants of the civil aircraft market would exist at all but for government support - whether it be direct through launch aid, as in Europe, or via the back door through the military budget, as with Boeing. Boeing believes that point was reached long ago with Airbus.Yet Boeing too receives subsidies, both through advantageous tax treatment and through massive military and space spending. Airbus contends that Boeing would not have been able to finance its civil programme without the guarantee of US government spending on military projects And so on the argument goes on.
Eighteen months of hugely costly and probably inconclusive wrangling now looms. Whatever the outcome, neither side is ever going to admit it was wrong; it's war and the world's two biggest trading blocks seem further apart than ever.As in all these cases, there's right and wrong on both sides. European governments have doled out some $15bn in "launch aid" loans to Airbus since the civil aircraft manufacturer began in 1967 - worth some $40bn in subsidies according to Boeing because of generous repayment terms.So far at least, all these loans have been repaid in full with handsome royalties paid to participating governments on top. Even so, the risk of designing and building new aircraft has been substantially transferred on to the public sector, and it is undoubtedly true that the same finance would have difficult to impossible to raise on fully commercial terms. Boeing's point is that although such aid might have been justifiable in the early years for Airbus, there comes a time when all companies must stand on their own two feet. At last here was a Trade Commissioner who meant business, who could knock heads together and achieve results.Six months later and he's back where he started with all hope of an agreed deal dead in the water. The French no was a vote for the forces of reaction, not economic liberalisation, but the consequences of this are still far from clear.
