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The Economist on Airbus and corruption

For those who feel like a little (slightly horrifying, but not especially surprising) insight into the French way of doing business, might I recommend reading this article from the Economist giving a detailed history of the various occasions in which Airbus Industrie have been revealed or alleged to have paid kickbacks in order to procure orders for their airliners. It is worth observing that to some extent the cause of the problem is the traditional structure of the airline industry, in which there have been a great many state owned carriers for which aircraft purchases have had to be approved by (very corruptible) government (or in some instances even military) officials. Airbus are by no means the first company to indulge in this sort of activity, but the enthusiasm with which they apparently have gone about it, and the apparent collusion and encouragement of the French government, are quite impressive.

A highlight

The Delhi court has a withering opinion of the help Airbus has given the CBI. It allowed Mr Wadehra to add Airbus’s Indian subsidiary to his action on the grounds that Airbus in France was not co-operating. Airbus told Mr Wadehra that French law forbade it from answering his questions. “[Airbus] sells its aircraft on their merits,” the firm insisted.

The court has castigated the CBI for its dilatory approach. It took the Indian authorities until 1995 to contact Airbus for information, only to be told that such requests should be routed through the French government. The CBI told Mr Wadehra, despite trying Interpol and diplomatic channels, it was not getting any help from the French government. The French embassy in Delhi in effect told Mr Wadehra to get lost when he wrote to ask why France was not co-operating.

(Link via Arts & Letters Daily).

7 comments to The Economist on Airbus and corruption

  • A nice bit of terrier-like investigative journalism from the Economist.

    On reflection, how likely was it ever that Airbus could have really caught up with Boeing on quality and price alone?

  • BigFire

    Where else on Earth can you have a government that treats bribe as tax deductable expense? France, a truely unique country.

  • Jacob

    Oh, come on, wake up guys.

    There is no deal, I repeat: **NO DEAL** of any magnitude in third world countries (and in much of Europe too, probably) that does not involve a bribe.
    Even more so (but not only) when Governments are involved.

    In the US there are no bribes, only kickbacks, and campaign contributions, and lobbying, and job-hopping officials – i.e. – more refined methods than simplisme France.

    That’s the way Governments function everywhere. Is that news ??

  • It’s not news, and it is particularly not news in this industry. Without making any actual accusations, the Economist article obliquely suggests that Airbus are nt the only guilty party. (The most famous case of this sort of corruption involves an American company, Lockheed, in the 1970s). However, some countries are worse than others, and the governments of some countries are implicated in ways that other governments are not. The point being made here is simply that the French are a particularly bad offender, which they are. (The US government has a tendency to put different kinds of non-financial pressure on foreign airlines and foreign governments to buy Boeing. This isn’t especially good, but actual bribes are worse).

    (France isn’t unique in making bribes tax deductible. This has been the case in quite a few countries, including Germany).

  • Jacob

    “The US government has a tendency to put different kinds of non-financial pressure on foreign airlines and foreign governments to buy Boeing. ”

    Rest assured that NO transaction occurs without a bribe. The US and later the EU have declared bribes illegal, under the usual illusion that if you dissaprove of something you make a law against it and thereby it dissappears.
    The age old custom of bribing is well and alive, but hidden under some layers of camouflage and indirection, which nobody has a very big interest in peeling off.

  • Sandy P.

    Via den Beste:

    “…The anti-US paranoia in French corporate boardrooms also runs thick. There are two prevalent themes I come across (and this predates the Iraq dispute): One is that every deal French companies lose out on to a U.S. bidder for international contracts is always because the U.S. companies are supposedly more clever at disguising their bribes than the French, the theory being that since the U.S., unlike France, has had anti-foreign corruption laws in place for 25 years, those Yanks have more experience getting around them. The other theme is that their companies are infested by CIA plants and that all their telephones are wiretapped by U.S. government agents. Many company executives even have their Paris-based staff, down to the level of secretaries, use code words when communicating with their U.S. offices, so that the negotiation for the sale of, say, “circuits to IBM” is rephrased as something like a sale of “PRODUCT X to ANTI-KASPAROV”. It’s amusing, but I spend more time trying to think up the code words than actually making the phone calls.”

  • Edmund Burke

    I think we can be certain that one deal took place with no bribes. This was Ryanair’s massive deal with Boeing in late 2001. Very few know the details, but Boeing are on record as saying they will NEVER sell planes so cheaply in the future.