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Last Updated: Friday, 3 February 2006, 17:11 GMT
US challenges �5.2m Airbus grant
Wing at Airbus' Broughton factory
Broughton makes wings for the super-jumbo A380 and the A350
The United States has challenged a �5.2m Welsh Assembly Government grant for the Airbus factory in Broughton.

The US said the money given to train new workers was a subsidy which breached World Trade Organisation rules on fair competition in global trade.

The north Wales factory, Wales' biggest manufacturing plant, employs more than 6,000 and makes wings for the A380, and A350 which is due in service in 2010.

When the grant was announced, Airbus said it was within the rules.

The US challenge has been filed at the World Trade Organisation in Geneva as part of a continuing row with the EU.

This is for employment and training, which is allowable under EU rules
Martin Evans, Wales Transport Research Centre

The politics of the subsidies given to national aerospace industries has heightened as the battle for orders between Airbus and US plane maker Boeing has become more fierce.

Boeing has recently been winning more orders for bigger jets but will face stiff competition from Airbus' A380 super-jumbo, which will be able to seat more than 800 passengers on two decks, and the A350.

The assembly government grant comes as the British aircraft builder is gearing up to expand its operation to meet orders for more than 2,000 planes.

Airbus A350
Airbus is expanding to meet orders for its A350 passenger jet

At the time, both the firm and the assembly government said they did not think the money would provoke the Americans.

'Creating jobs'

When the grant was announced, Airbus spokesman Phil Swash said: "It's within the current rules that we have that are very transparent."

Wales Euro-MP Eluned Morgan, Labour's European spokesperson on industry, said the grant was "nothing more than US-based aviation firm, Boeing, received from the US government".

She said: �Boeing receives massive and wide-ranging government support.

"Not least, it benefits tremendously from indirect subsides through Nasa and defence department research and development programmes. To complain about this Welsh assembly grant is just sheer hypocrisy.�

Martin Evans, external research fellow for the Wales Transport Research Centre, said he believed the assembly government was right to give the grant.

He said: "This isn't launch aid, which is what the complaint going through the World Trade Organisation at the moment is about.

"This is for employment and training, which is allowable under EU rules. I certainly don't think it's any different from what would happen at a state level in the United States.

"What we can't do is put our aerospace industry in Wales on hold while this is sorted out.

"This work could very easily end up somewhere like China instead."




SEE ALSO:
Boeing surprises with profit news
01 Feb 06 |  Business
Airbus claims victory in jet war
17 Jan 06 |  Business
Airbus 'to turn down state money'
05 Oct 05 |  Business
Airbus v Boeing: The next battle
26 Apr 05 |  Business


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