WikiLeaks News

Cablegate:Diplomats push sales of jetliners

on the global market.

A Boeing 747-8 is assembled in Washington State. American and Boeing officials acknowledged the big role the United States government plays in helping them sell commercial airplanes.

by New York Times:

The king of Saudi Arabia wanted the United States to outfit his personal jet with the same high-tech devices as Air Force One. The president of Turkey wanted the Obama administration to let a Turkish astronaut sit in on a NASA space flight. And in Bangladesh, the prime minister pressed the State Department to re-establish landing rights at Kennedy International Airport in New York.

Each of these government leaders had one thing in common: they were trying to decide whether to buy billions of dollars’ worth of commercial jets from Boeing or its European competitor, Airbus. And United States diplomats were acting like marketing agents, offering deals to heads of state and airline executives whose decisions could be influenced by price, performance and, as with all finicky customers with plenty to spend, perks.

This is the high-stakes, international bazaar for large commercial jets, where tens of billions of dollars are on the line, along with hundreds of thousands of high-paying jobs. At its heart, it is a wrestling match fought daily by executives at two giant companies, Boeing and Airbus, in which each controls about half of the global market for such planes.

It is not surprising that the United States helps American companies doing business abroad, given that each sale is worth thousands of jobs and that their foreign competitors do the same. But like the other WikiLeaks cables, these offer a remarkably detailed look at what had previously been only glimpsed — in this case, the sales war between American diplomats and their European counterparts.

The cables describe letters from presidents, state visits as bargaining chips and a number of leaders making big purchases based, at least in part, on how much the companies will dress up private planes.

The documents also suggest that demands for bribes, or at least payment to suspicious intermediaries who offer to serve as “agents,” still take place. Boeing says it is committed to avoiding any such corrupt practices.

State Department and Boeing officials, in interviews last month, acknowledged the important role the United States government plays in helping them sell commercial airplanes, despite a trade agreement signed by the United States and European leaders three decades ago intended to remove international politics from the process.

The United States economy, said Robert D. Hormats, under secretary for economic affairs at the State Department, increasingly relies upon exports to the fast-growing developing world — nations like China and India, as well as those in Latin America and the Middle East.

So pushing sales of big-ticket items like commercial jets, earth-moving equipment or power plants (or stepping in to object if an American company is not being given a fair chance to bid) is central to the Obama administration’s strategy to help the nation recover from the recession.

Boeing earns about 70 percent of its commercial plane sales from foreign buyers, and is the single biggest exporter of manufactured goods in the United States. Every $1 billion in sales — and some of these deals carry a price tag of as high as $10 billion — translates into an estimated 11,000 American jobs, according to the State Department.

New York Times

There were variety of [reaction] comments about the role the State Department should play in securing contracts for (IPO share holder) private companies.

Tom in San Jose (Recommended by 28 readers):There’s nothing new about this. But, I suspect that many Americans have no idea of just how much the State Department plays in getting business for U.S. manufacturers. It’s about time that Joe six-pack American had a clear understanding of just exactly why we need to fund a government that is involved in the world of business. many contracts would go to other companies (non-U.S.) if it weren’t for the back-channel work the DOS does.

Matt from New Hampshire (Recommended by 129 readers):Obviously, the free market is for “other people.” “Government is the problem,” except when needed to push sales.

Look, I have no problem with the U.S. promoting, generically or specifically, the export of American made products. But when these same companies declaim that government is the problem, well, that smacks more than just a little bit of stupendous hypocrisy.

Haitsch76 from NYC (Recommended by 31 readers): We have to thank the Saudis for buying our Pentagon-subsidized Boeing’s. If it weren’t for military manufacturing we’d have no manufacturing at all.

Non-military manufacturing and the jobs it brings, needs similar governmental help in this country. However with the Wall Street financial sector in the saddle, this country won’t go there.

What shocks me the most are the people who claim that they want smaller U.S government which I know Wall Street execs are NOT interested in if they are receiving these kind of perks from administrations (Obama and Bush).

State Dept. has a lot of explaining to do.