=20 ---------------------------------------------------------------------- This article was sent to you by someone who found it on SF Gate. The original article can be found on SFGate.com here: http://www.sfgate.com/cgi-bin/article.cgi?file=3D/news/archive/2003/08/21/f= inancial0925EDT0041.DTL ---------------------------------------------------------------------- Thursday, August 21, 2003 (AP) EU warns Taiwan: Airline's choice of U.S. engine maker over European rival = could harm ties ROBERT WIELAARD, Associated Press Writer (08-21) 06:25 PDT BRUSSELS, Belgium (AP) -- The European Union questioned China Airlines' decision to buy engines for its Airbus planes from General Electric Co., saying Thursday that the choice ignored a "superior" offer from British engine maker Rolls Royce and could harm Taiwan's relations with the EU. EU spokesman Michael Mann urged authorities in Taiwan to rethink the dea= l. "We are concerned about the decision-making process," Mann said. "This decision going against a European producer could have a major impact on relations between the EU and Taiwan." In accepting the offer of U.S.-based GE, Mann said, Taiwan's largest carrier rejected a deal from Rolls Royce, "which was actually superior to that of General Electric both in commercial and technological terms." In a contract worth an estimated $600 million, China Airlines said last week that it plans to buy GE engines for 18 passenger jets it ordered last year -- six Boeing B747-400s and 12 Airbus A330-300s. The airline was once owned by Taiwan's government but is going private under a plan aimed at improving its management. It is still controlled by a quasi-government foundation that holds a 70 percent share of its equity. Taiwan is widely believed to favor the American company because the Unit= ed States is one of the island's most important friends and its most likely defender against China. Beijing considers Taiwan a renegade province and has threatened to retake it by force. Nevertheless, Mann said, EU officials were stunned by the choice. "The Rolls Royce engine is the only one specifically designed for the A330. I don't think the GE engine has even been certified for that aircraft," Mann told reporters. He said world trade rules for civil aircraft prohibit Taiwan from discriminating in "procuring aircraft engines and that buys should be made only on the basis of competitive price, quality and delivery. We are quite concerned and we want clarifications from the Taiwanese side." When the deal with GE was announced Aug. 13, China Airlines denied repor= ts that Taiwan's government had been pressuring it to carve up the contract between GE, Rolls Royce and U.S.-based Pratt & Whitney to avoid offending any company or country. It said GE had offered it a "heavy discount." =20 ---------------------------------------------------------------------- Copyright 2003 AP