The Boeing Co., with commercial aircraft sales lagging and thousands of employes laid off, has asked the Reagan administration for an export license to sell $600 million worth of passenger jets to Libya.
The license application, submitted to Commerce Secretary Malcolm Baldrige on Nov. 30, is likely to prompt intense government debate over how to balance the needs of the severely depressed U.S. aircraft industry against President Reagan's repeated pledge to punish the radical Libyan regime of Col. Muammar Qaddafi for its support of international terrorism.
Boeing, according to informed officials, asked for a license to sell Libya 12 aircraft, including at least one jumbo 747, two or three new twin-engine 767 airliners and as many as five of the smaller 737s.
The proposal reportedly incorporates an assurance from the Libyan government that the aircraft will not be put to any military use. A Boeing spokesman said yesterday that the company would not provide details beyond confirming that the application was submitted. The spokesman said the Libyan state airline "has one of the highest growth rates in the world and [Libyan officials] have expressed their intent to order these aircraft to accommodate this growth."
State and Commerce department officials who would not comment publicly cited confidentiality restrictions placed on export-license applications by the Export Administration Act. Granting the license would create an exemption from a variety of government barriers to trade with Libya.
Several government officials who asked that they not be identified pointed out that the most difficult obstacle faced by Boeing in promoting the sale is the vivid memory of the extraordinary security steps taken in Washington last winter to protect Reagan and top officials following intelligence reports that Libyan "hit teams" allegedly had been sent to the United States by Qaddafi to assassinate American leaders.
Another obstacle, according to one State Department official, is Libya's disobedience of restrictions on the use of U.S.-purchased aircraft. The official said State had blocked the sale of three Boeing 747s to Libya in 1980 on grounds that Libya had used previously purchased Boeing jets to ferry troops into Uganda in support of the besieged regime of Idi Amin.
"I guess we're supposed to take Muammar's word that they won't be used for military purposes ," the official said.
Boeing, based in Seattle, has laid off nearly 9,000 employes this year, and its earnings for the first nine months fell 46 percent to $201 million from $377 million in the like period last year.
Boeing officials have expressed concern that trade bans, like the one imposed against Libya, will hurt their company in its long-term competitive battle against Airbus Industrie, the European consortium producing Airbus jetliners.
"We know what the hell is going to happen in Libya," a Boeing official said. "They like our equipment, but after a while they're going to buy from Airbus."
One State Department official suggested, however, that the government has thus far prevented Libya from obtaining Airbus jets because their engines are manufactured by a partnership that includes General Electric Co.
The official said State has blocked for a number of months the sale to Libya of two completed Airbus jets sitting idle outside the Toulouse, France, Airbus factory. State has refused to grant an export license to the French aerospace firm, Snecma-GE, for the Airbus engine design and technology developed by GE.
"The French are pretty upset about it," the official said, adding that the dispute over the Airbus export licenses is similar to the administration's dispute earlier this year with France and other European allies over the transfer of U.S. technologies by European firms for the Soviet Union's natural gas pipeline.
Officials said the Boeing application is in the early stages of consideration and noted that Congress will have to be notified 30 days prior to any license approval.
Applicable federal regulations state that Libya has been designated a nation that "repeatedly supports acts of international terrorism . . . " and, therefore, "applications will generally be denied for exports that would constitute a high risk of increasing Libyan capabilities to carry military cargo or troops . . . ."
U.S. officials said sophisticated electronics and avionics systems in the new Boeing jets might also be converted to military use.