October 13, 2005 in Business

Airplane trade dispute may be solved

Compiled from wire reports The Spokesman-Review
 

Boeing Chief Financial Officer James Bell said Wednesday that he thinks a settlement can be reached in the ongoing trade dispute between the EU and the U.S. over government subsidies to airplane makers.

“I just think that’s how it’s going to happen,” he said after a speech to the Chamber of Commerce of this Seattle suburb.

Bell didn’t provide any concrete details as to why a settlement appears likely.

“Taking it to a WTO ruling just probably won’t be necessary,” he said.

The massive World Trade Organization dispute began last year, when U.S. officials withdrew from a 1992 agreement on aircraft subsidies and filed a complaint against aircraft launch aid for Boeing’s European rival, Airbus SAS. Brussels retaliated with a countersuit citing U.S. and overseas tax breaks and subsidies to Boeing.

The issue has recently grown more heated in the last week, after Airbus said it had received “legally binding” government funding pledges for its newly launched A350 jetliner program. U.S. government officials complained that it appeared clear that EU countries weren’t willing to stop subsidizing Airbus.

The A350 would compete against Boeing’s new 787. The Airbus plane would enter service in 2010, while Boeing’s plane is set to fly its first commercial routes in 2008.

United Airlines plans to recall 300 pilots

Elk Grove Village, Ill. United Airlines plans to recall about 300 pilots to meet an expected increase in flying next year as it comes out of bankruptcy, the nation’s No. 2 airline said.

The total represents nearly a sixth of those remaining on furlough and will add 5 percent to United’s work force of approximately 6,500 active pilots.

The Air Line Pilots Association said Wednesday it was pleased with the announcement. “The more furloughed pilots recalled the better, and the sooner the better,” said spokesman Dave Kelly of the United branch of ALPA.

United said Tuesday it has recalled 234 pilots from furlough in 2005.

Kerkorian raises stake in GM to nearly 10%

Detroit Billionaire investor Kirk Kerkorian has increased his stake in General Motors Corp. to nearly 10 percent, according to a company filing released Wednesday.

Kerkorian acquired 2.1 million shares of GM common stock on the open market Tuesday, the filing with the U.S. Securities and Exchange Commission said. The average purchase price for the shares was $26.98 per share, for a total purchase price of approximately $56 million.

Kerkorian’s Tracinda Corp. private equity firm has been steadily increasing its stake in GM for several months. Tracinda has said it is buying GM shares solely for investment purposes and doesn’t aim to influence control over GM’s business, but the firm also has said it may approach the automaker about getting a seat on its board.

GM spokeswoman Toni Simonetti said the automaker had no comment.

In September, Tracinda disclosed it was boosting its stake in GM to 9.5 percent, after nearly doubling its ownership to 7.2 percent in June through a tender offer. Tuesday’s action brings Tracinda’s share to 9.9 percent.

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