Economy

Canada: Bombardier-Boeing aerospace war heats up

Canada: Bombardier-Boeing aerospace war heats up”

"Any claimed economic threat to Bombardier is due to the weakness of its product in the marketplace", said Boeing.

Boeing had recommended a heavy tariff on the C Series, paid by Delta or any US airline importing the aircraft in what would be considered a major blow to Bombardier and its ability to establish the new jet in the world's largest aviation market.

Bombardier employs more than 4,000 people in Belfast and contributes an estimated £400m (€457m) to the Northern economy.

May promised that the British government would continue working with Bombardier to protect the important jobs in Northern Ireland.

Defence Secretary Sir Michael Fallon has said Boeing's actions in taking a complaint against Bombardier, could jeopardise its future defence contracts.

The business secretary, Greg Clark, also joined the chorus when he called the steep tariff "unjustified" and vowed to work with the Canadian government to get the ruling overturned. "It's high time she woke up".

"Commerce's preliminary determinations nearly always rule in favor of the USA complainant", Canadian foreign affairs minister Chrystia Freeland said.

Commerce ruled that Montreal-based Bombardier used unfair government subsidies to sell jets at artificially low prices in the U.S.

However, London's options in fighting Bombardier's corner may be limited because of the importance of Boeing to its defence industry.

From 2002 to 2011, Embraer made its ERJ145 regional jet through a joint venture with Chinese partners in Harbin, but the government resisted a push to produce the newer E190 there.

Federal NDP leader Tom Mulcair was more aggressive, as he said the government needed to show it "had enough backbone to stand up to the bullying of Boeing and of the USA government".

It's now up to the International Trade Commission to make a final decision next year.

The U.S. Commerce Department placed big tariffs on imports of Canada's Bombardier C Series aircraft on Wednesday, saying exporters of the aircraft were receiving large subsidies.

The threat of punitive tariffs on the C-Series will cast a shadow over Bombardier's future unless the company can source alternative and substantial sales outside the USA market.

The trade dispute centres on the sale of 125 C-Series airliners, the wings for which are made in Northern Ireland.

The Labour MP also warned that arranging a new trade deal with the USA in the wake of Brexit will not be smooth sailing. The plane maker has long feasted on a host of United States government supports and military contracts - and it's the largest client/dependent of the government's U.S. Export-Import Bank. She added that Boeing's petition is "threatening these United States jobs". "How can we have a level playing field when the Canadian government is paying billions of dollars to support Bombardier's strategic mistakes?"

Prime Minister Justin Trudeau last week said Canada would not go ahead with a deal to buy Boeing fighter jets while the company pursues the trade complaint against Bombardier.

It has now imposed a 219.63% countervailing duty on Bombardier's new commercial jets.



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