Back to Stone Age Protectionism

Due to U.S. government intervention, EADS (the European Aerospace Defense and Space Company, maker of Airbus aircraft) has withdrawn from competition for the contract to build new U.S. Air Force in-flight refueling aircraft. Leading German newspapers see Obama’s “America First” initiative as the end of the trans-Atlantic West.

Landeszeitung (Lüneburg):

EADS’ crash-landing on the American market may well signal the end of what’s left of Obama euphoria on the “old continent” since without his nod, Boeing wouldn’t have gotten the sweetheart deal of the century to build the new tanker aircraft. The hyper power, a title America retains only because of its military superiority, has thus made it clear where the limits of Western cooperation lie: at the point where American interests begin.

The ousting of the Airbus tanker is further evidence of the end of the trans-Atlantic West. Cooperation with Europe — even as far as NATO is concerned — is on America’s back burner, even with Obama at the helm. The lesson for Europe can only be that it’s time to throw off the American security blanket and develop its own military might.

Frankfurter Allgemeine Zeitung:

The armaments industry is so far removed from automobile making that no comparisons are possible. That should change. Today’s way of doing business costs the taxpayer a lot and ensures only that armies seldom get the best products for their money — all the way down to toilet paper. But to suggest that only the Americans are having great difficulty with government procurement is hypocritical and little more than political posturing.

Hamburger Morgenpost:

Something has gone terribly amiss between Barack Obama and the Europeans. The president didn’t show up at the USA-Europe summit, and now the U.S. has dealt Airbus a resounding slap in the face that is sure to have repercussions. Seldom has a request for bid been so openly tailored with the sole purpose of taking away the tanker contract the Europeans already won in 2008.

America first — Beginning with the battle over Opel, Obama has invoked this close-minded formula without regard for the Europeans and especially for Germany. In the future, America cannot credibly claim to be proponents of free trade. After this blatant foul, we’re threatened with a return to the stone age of protectionism.

Rhein-Zeitung (Koblenz/Mainz):

Complaints about deviating from the rules of competition seem especially curious in the Airbus matter. The European aircraft company would have never grown to its present size had it not been for billions in government subsidies. Nobody who builds jumbo jets would make the enormous initial investments necessary without government support.

The sole economic justification is that there is now a duopoly, two players in the game; otherwise, Boeing would have been able to rake in huge profits as a monopoly. But that’s how it goes with industrial politics: There are never just single instances of government intervention, and the squabble over the tanker was immediately politicized. Governments should not get involved, regardless of which side of the Atlantic they’re on.

Abendzeitung (München):

Aggravating, unfair, unwise. Airbus management and politicians can get as mad as they want about the U.S. Defense Department’s decision against EADS and the contract of the century; in the end, their outrage will change nothing.

Boeing, the U.S. manufacturer, has already cut thousands of jobs and in the face of millions of unemployed nation-wide, the American government can’t afford more layoffs at one of its most prestigious concerns. That’s why the rude treatment offered Airbus in their bid to build 179 tanker aircraft shouldn’t come as a surprise to anyone.

Nordwest-Zeitung (Oldenburg):

Protectionist industrial policy triumphed over a professional decision. That’s too bad for EADS, but it’s hardly an American phenomenon. European politicians know all too well that they decided to develop and build outrageously expensive fighter-bombers, combat helicopters and near-priceless transport aircraft in their own local factories despite the fact that cheaper, proven and fully comparable models were already available on the world market.

The worldwide armaments business plays by different rules than normal global commerce. The military-industrial complex always has any number of arguments ready to justify why a particular weapons system has to be manufactured at home. Not all of the arguments stand up readily to close inspection, but that fact has yet to bother anyone on either side of the Atlantic.

Kölnische Rundschau:

Balance sheets in the red, meager prospects, a lucrative contract with great future potential now out of reach; the bad news just kept coming for EADS this week. The European manufacturer isn’t doing too badly on earnings, but when several large projects become burdensome, that’s of little help.

Most disappointing to the experts has to be withdrawal from the bidding competition in the U.S. That was important, because very little can be undertaken without American partners. Nevertheless, had EADS won the contract, they would have gained more than just a 100 billion Euro contract over the coming years.