EoW May 2008

T ransat lant ic Cable

But Mr Ewing notes that such measures go only so far, particularly for countries and companies that depend on exports. He cited Ireland, which uses the euro and “has been hit by a double whammy because the currency has risen against the British pound as well as the dollar, making Irish exports more costly for its two largest trading partners.” As an example of shared transatlantic pain, Mr Ewing ❈ ❈ offered Volkswagen’s redesigned Scirocco, one of the hits of the Geneva auto show in early March. The sporty car, he noted, might be just the thing to revive the image of the Volkswagen brand in the United States. But Americans should not expect to see the Scirocco, built in euro territory, cruising down their highways any time soon, even though German engineers designed it to meet US requirements. “At the current exchange rate there’s no point,” Detlef Wittig, VW executive vice president for group sales and marketing, told Business Week . “There’s no profitability there.” Of related interest . . . According to New York’s tourism operation, the weak ❈ ❈ US currency helped draw 8.5 million foreign visitors to New York in 2007, more than ever before. And a small but growing group of merchants in such popular Manhattan neighbourhoods as Times Square, Greenwich Village, and SoHo has begun to accept the euro and other foreign currencies. A visiting Washington Post reporter even spotted a hand-lettered sign reading “Euros Only” in a store window on East Houston Street, near the offices of EuroWire . But the proprietor of the antiques-and-props establishment confessed this was only an attention-getter. He is prepared to accept Canadian dollars and British pounds – US dollars, too. Speaking in Paris on 11 th March, Bernard Kouchner, the foreign minister of France, said that the successor to US President George W Bush may be able to restore something of the United States’ battered image and standing overseas. But, Mr Kouchner added, “I think the magic is over.” The setting was a meeting of the Forum for New Diplomacy, co-sponsored by the Académie Diplomatique Internationale and the International Herald Tribune . In the course of a wide-ranging conversation afterward with Roger Cohen of that newspaper, Mr Kouchner was asked whether the US could repair the damage it has suffered to its reputation during the current Bush presidency and especially since the US-led invasion of Iraq in 2003. In the sober assessment of this longtime diplomat – who, as noted by the Tribune ’s Alison Smale, is one of the strongest supporters in France of the United States – “It will never be as it was before.” (“The US ‘Magic’ is over, Says French Foreign Minister,” 12 th March) US military supremacy endures, observed Mr Kouchner, who is also co-founder of Médecins Sans Frontières and a noted humanitarian; and“there are many means for [the new president] to re-establish the image.” But that, he said, “will take time.” Can the next president restore America’s image overseas?

The Air Force surprise

The US military chooses Airbus over Boeing for one of its largest contracts

Boeing Co on 11 th March protested the award by the US Air Force of a $40 billion contract to replace 179 Eisenhower-era aerial refuelling tankers to a group that includes Airbus, the European commercial airline company. The Boeing protest, made to the Government Accountability Office, followed several days over which company officials issued a series of complaints about unfairness. Chicago-based Boeing was widely expected to win the contract. Indeed, it was that expectation that some industry observers say led to a complacency that may have lost Boeing the deal. The winners, Northrop Grumman Corp and its European partner, Airbus parent EADS, “clearly provided the best value to the [US] government,” Sue Payton, the Air Force’s chief weapons buyer, told reporters at a briefing following the 29 th February announcement. EADS (European Aeronautic Defense and Space) is based in Paris and Munich. Boeing and its lawmaker-allies in Washington contended that too many American jobs are moving offshore, and that sensitive military contracts should not be in the hands of a foreign company. That argument was also pressed from the campaign trail by the Democratic candidates for president, Senators Hillary Rodham Clinton and Barack Obama. The Northrop Grumman-EADS team had quietly gone about polishing its product rather than its rhetoric, proposing a tanker made from a refitted Airbus A330 passenger jetliner that could hold more fuel, troops, and supplies than the rival entry, a modified Boeing 767. Most notably, the winning team built a $100 million state-of-the-art refuelling boom on spec. Writing in the New York Times , David Herszenhorn and Jeff Bailey described the apparatus in action in the skies above Spain, where at 27,000ft an Airbus plane rendezvoused with a Portuguese F-16 fighter. South of Madrid, the two aircraft edged closer until they were connected by a 50ft boom hanging off the back of the big Airbus plane. The boom pumped fuel from one plane to the other, 2,000 gallons in all during several connections. (“In Tanker Bid, It Was Boeing vs Bold Ideas,” 10 th March) The Times writers noted, “The technology to pass fuel from one plane to another may not be rocket science – in fact, aerial fuel booms have been in use for more than 50 years – but it helped Airbus’s parent and its partner, Northrop Grumman, establish their technical bona fides.” Whatever turned the trick, if Boeing and its very vocal ❈ ❈ protectionist-minded cheering section do not force a reconsideration of the award, Northrop Grumman (Los Angeles) and EADS expect to create nearly 2,000 jobs in Mobile, Alabama, where the new tanker will be assembled from parts made in Europe. The team told the Washington Post (10 th March) that the number of American jobs supported nationwide could reach 48,000.

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EuroWire – May 2008