Sen. Sam Brownback (R-Kans.) has announced plans to ask the U.S. International Trade Commission to look into the issue of unfair competition in business aircraft production. His state is home to Cessna, Hawker Beechcraft and Learjet, and Brownback has suggested that foreign competitors — specifically Embraer of Brazil — have enjoyed government subsidies in developing their products. Brownback said, “I have determined there is a need for a thorough analysis of the global competitiveness of the U.S. business jet aircraft production industry.”
Kansas has been hit hard by the economic recession, and the general aviation industry has been victimized worse than most. In the past two years, 13,000 jobs have been lost in Kansas, alone. Meanwhile, Embraer’s business aircraft line of products, which debuted in 2002, has increased its worldwide market share to 14 percent, according to Brownback. He said, “Embraer’s activity does not seem possible without heavy and creative government support across the board.”
Embraer has been quick to defend itself in light of the allegations. A spokeswoman denied that any public funds were among the $1 billion used to launch the business aircraft product line, which includes the Legacy large-cabin jet and the smaller Phenom 100 and 300 models. The money came from a public offering of stock, contributions from risk-sharing partners and retained earnings, according to Embraer. Nor were any government funds involved in developing and marketing the E-jet family of commercial aircraft, said the spokeswoman. She added that Brazil’s export financing programs have been vetted and judged compliant with international agreements by a panel of the World Trade Organization.
Disputes such as this have long been a staple of debate between airliner manufacturers Airbus of Europe and Boeing. The latter claims the European Union subsidizes the multinational corporation; the former contends the U.S. government supports Boeing with military contracts.
