On February 28, Airbus CEO Guillaume Faury criticized the U.S. Inflation Reduction Act (IRA) during a Washington, DC, Aero Club speech arguing the law gives U.S. companies an unfair competitive advantage over their European counterparts.
The IRA, which passed last year, includes a number of provisions intended to fight climate change, including certain clean energy tax credits. I was not a fan of or cheerleader for the IRS for a long list of reasons, but Mr. Faury’s criticism of the IRA doesn’t seem to have any principled basis. It appears to be conveniently strategic.
Here’s what’s confusing - Mr. Faury’s critical remarks of the IRA contradict six different letters that Airbus signed which were sent to the White House, Congress, the Department of Transportation, and Internal Revenue Service, all of which supported provisions in the IRA.
As recently as last month the French aerospace company signed onto a letter which “applaud[s] the passage of the SAF Blender’s Tax Credit,” supporting American tax incentives to drive up the use of “sustainable” aviation fuel.
I’ve long been critical of the IRA for a number of reasons, but I’ve at least stayed consistent! Is Mr. Faury being intentionally deceptive? Is he playing both sides of the issue? Does he support and oppose everything?
Last year, only after international media pressured him to do so, Mr. Faury stated that Airbus would stop using Russian titanium, yet he lobbied the EU opposing sanctions on Russian titanium, and is still using Russian titanium to this day.
Ultimately, it falls to the U.S. government to ensure American industry is competitive and leads globally – a goal that many countries share, and which the U.S. executed in alignment with international law.
This is more than can be said for the other side of the Atlantic – recent events around the IRA aren’t the only case of Airbus’s hypocrisy.
Airbus has benefited substantially from EU production subsidies, receiving $22 billion in “launch aid.” A well-documented WTO battle which stretched 17 years found the EU to have violated trade rules left and right, granting Airbus billions of dollars of financing discounts. The WTO even granted the U.S. the right to impose up to $7.5 billion in tariffs before the two sides finally came to an agreement in 2021.
It seems that Mr. Faury has no problem ignoring an uneven playing field when it benefits his company.
Maybe instead of fluctuating between supporting and criticizing America’s approach to building a competitive economy, Airbus and its leadership should focus their time building better aircraft – and then maybe, one day, they’ll be able to compete with American industry. And maybe, he’ll really stop using Russian titanium.
But if past performance is any indication of likely future action, there is plenty of reason to expect that the hypocrisy and double talk coming from Airbus will continue. Let’s hope they see the light and focus on competing fairly by making quality products rather than seeking gargantuan aid packages from European taxpayers or by being on all sides of every political issue.
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