VZCZCXYZ0054
RR RUEHWEB

DE RUEHIN #1152 0930813
ZNR UUUUU ZZH
R 030813Z APR 06
FM AIT TAIPEI
TO RUEHC/SECSTATE WASHDC 9496
INFO RUCPDOC/DEPT OF COMMERCE WASHDC
RULSDMK/DEPT OF TRANSPORTATION WASHDC
RUEATRS/DEPT OF TREASURY WASHDC

UNCLAS AIT TAIPEI 001152 
 
SIPDIS 
 
SENSITIVE BUT UNCLASSIFIED 
SIPDIS 
 
DEPT PASS TO USTR 
DEPT FOR EAP/TC 
 
 
USDOC FOR 4430/ITA/MAC/JDUTTON 
USDOC PASS TO ADVOCACY CENTER 
 
E.O. 12958: N/A 
TAGS: EAIR ETRD TW
SUBJECT: Boeing-CAL Sale Awaits Presidential Office Signal 
 
 
¶1. (SBU) Summary: Boeing continues to discuss the sale of ten 747-8 
aircraft with China Airlines (CAL).  CAL recently suggested that 
Boeing should get the State Department or National Security Council 
to express support for the sale.  Boeing representatives explained 
to CAL that nine U.S. Senators had already expressed support and 
further action from the U.S. executive branch would not be helpful 
at this time.  Boeing believes that the next move should be CAL's. 
Boeingis puzzled by the need for further government approval at 
this stage, but will not seek U.S. executive branch action.  It has 
asked for further support from the staff of Senators who wrote to 
President Chen about the sale and may seek additional action from 
Senator Rockefeller.  End summary. 
 
¶2. (SBU) Boeing Commercial Airplane Group Chief Taiwan 
Representative Paul Fang and Sales Director Scott Grimsby briefed 
AIT/T March 30 on the status of their proposal to sell China 
Airlines (CAL) ten 747-8 planes, consisting of four freight and six 
passenger aircraft.  CAL's Board of Directors voted in early March 
to approve "conditional acceptance."  Boeing believed that this 
would move them into contract negotiation, followed by another vote 
by the Board of Directors to approve the contract and then final 
approval by the government.  However, CAL told Boeing that it would 
need approval from Taiwan's Presidential Office before it would be 
able to proceed with contract negotiation.  CAL asked Boeing to 
arrange for some kind of expression of support from the U.S. 
government to be delivered to the Presidential Office. 
 
¶3. (SBU) Boeing arranged for nine Senators, led by Senator 
Brownback, to send a letter to President Chen Shui-bian in support 
of the deal.  AIT followed up by telephone, asking the Presidential 
Office on behalf of Senator Brownback's office what the status of 
the letter was.  Subsequently, U.S.-Taiwan Business Council Chairman 
William Brock sent a letter in support of the Boeing sale to Chen. 
However, on March 28, CAL suggested that Boeing arrange for the U.S. 
State Department or National Security Council to send a message of 
support as well. 
 
¶4. (SBU) Fang and Grimsby met with CAL Senior Vice President of 
Marketing Brian Chou and Vice President of Corporate and Marketing 
Planning Steve Yang on March 29.  At the meeting, Fang told Chou and 
Yang that Boeing believed that it had done everything that CAL had 
asked.  He underscored the significance of a letter from nine U.S. 
Senators and explained why Boeing was reluctant to involve officials 
from the U.S. executive branch at this point.  Fang said that by the 
end of their meeting with Chou and Yang, the CAL executives seemed 
to have accepted Boeing's message that the next move should be 
CAL's.  Later Fang told AIT/T by phone, that CAL had arranged a 
meeting with staff at the Presidential Office to discuss next steps. 
 Boeing had given CAL a deadline of March 31 to complete contract 
negotiations and will now consider adjustments to this timeframe. 
 
¶5. (SBU) Fang and Grimsby were both puzzled by the process and CAL's 
insistence on some kind of approval from the Presidential Office at 
this stage.  They are not sure whether CAL or the Presidential 
Office is driving the requests for more U.S. government action. 
However, the Boeing executives were clear that they do not believe 
further action by the U.S. executive branch in Washington would be 
effective or appropriate at this time.  Fang said that Boeing has 
asked the senior staff of the nine Senators who wrote to Chen to 
contact TECRO in Washington to follow up on the letter.  Boeing is 
also considering asking Senator Rockefeller to intervene personally 
by calling the Presidential Office in Taipei.  Fang said that it 
might be useful for AIT to show its interest in the situation at 
some point in the future.