US Dept of Commerce slaps 220% tax on Bombardier c series

[WHBM]

Bombardier hit by tariff in Boeing row - BBC News (http://www.bbc.co.uk/news/uk-northern-ireland-41397181)

Yes, 220% tax.

[cowhorse]

Free market?

[Chris2303]

Careful Boeing, Canada may retaliate!

[KelvinD]

Isn't this the type of behaviour we have come to expect from Boeing and the Dept of Commerce?
Delta's potential $5Bn order has suddenly become a $16Bn order. Ouch!

[sfm818]

Were there any such complaints from Airbus when European airlines placed orders with Embraer
or Bombardier? Wait and see if United AL pay back the 70% discount they received from Boeing.

[EastMids]

United States of America seems to be showing its true colours - and this is the country the UK wants to set up a new trade deal with... Riiiighhhht

[Cazalet33]

Of course Boeing has never received a gumment subsidy. Oh no.

[DJ77]

The C-series must be rather good to scare the hell out of Boeing like that.

[Piltdown Man]

There is a simple response...

[KelvinD]

The irony here with regard to Boeing is that the C Series is not considered a competitor to Boeing's current offerings. If it is not a competitor, then one can't use anti-competitive legislation. So that leaves spite as the motive.

[45989]

Does anyone here remember the USAF air tanker tender competition a few years back?
Won on technical merit by the Airbus 330. Boeing whinged again, and the deal went to the ageing and technically inferior B767.
Level playing field??
I won't even bother about how Boeing is subsidized by the US government/military.

[ExXB]

So, because of a $1 billion bail out by Quebec and the UK the US imposes an $11 billion tariff.

The bail out is supposed to be paid back.

Make America grape again, make everyone else too expensive.

[recceguy]

Sqwak something, US will laugh a little bit less once Canada will have cancelled the EF-18 order (and maybe the F-35 order) There are other and better combat aircraft on the market .....

https://www.bloomberg.com/news/articles/2017-09-18/trudeau-says-canada-won-t-buy-boeing-jets-amid-bombardier-fight

[PEI_3721]

A slap on the wrist for cancelling the F35; look for a sweetener on the F18 deal helping Donald to drive down military procurement costs.
Also a big stick wave for any other country considering cancelling the F35.

[The Ancient Geek]

There is a simple solution for Delta - just set up a dummy canadian company and operate the C series on lease on the canadian register.
A matching duty on all boeing products entering canada would also concentrate minds.

[RAT 5]

Yes, 220% tax.

And which finger in the wind type calcualtion came up with this number? Let's think of the chairman's birthday, double it, add Trump's mental age - the whole family - and then we'll dump it on the Canadians who aren't even making an a/c that competes with Boeing, the complainant. Spot on. "Proposed? Seconded, Paased." Next. Now, this Airbus thing.........before we get onto those South American latinos at Embraer.

[6000PIC]

This punitive action by the US Commerce Dept. underscores the depths to which the USA will go to punish a friend , neighbour and staunch ally , all in order to " level the playing field " , of which Boeing is not even on. Both Britain and Canada must retaliate , but it must be done intelligently and with great effectiveness. Pi**ing off two invaluable allies is not wise. The C-Series must be quite an aircraft.

[dc9-32]

The rest of the world will buy the C series. Why do we all jump at what the US say ?

[Cows getting bigger]

My teenage daughter is irrational, hypocritical and always looking for someone to blame. She will happily lock herself away for days at a time but comes begging to me when she wants something.

Perhaps this particular teenager should be allowed to find it's own way through such growing pains? Personally, I'm getting a little weary of all things American and would prefer to share a bottle or two of Merlot with my more cultured friends.

[Ian W]

The rest of the world will buy the C series. Why do we all jump at what the US say ?
It would appear that the 'dumping' level prices were because the rest of the world were _not_ buying the C-series.

[Brigantee]

Don't worry folks the Donald is still going to give us a great big beautiful trade deal when we get rid of those dreadful europeans....

[inducedrag]

https://airwaysmag.com/airlines/airasia-head-tony-fernandes-eyeing-cseries/

[SMT Member]

The real irony is, of course, that a while back United was on the verge of placing a rather large order for C-Series aircraft. Enter Boeing, with an offer on 737-700s at a much cheaper price than BBD could offer on the C-100. Rumours has it, the price was around 17M USD each for the Renton tractor, vs. 20+ for the Qomposite Quebecois. And you get 25% more seats in the bargain; what's not to like?

However, that's not price dumping according to US regulations, since it's a transaction between two US based companies. The logic is baffling, but there you go - Boeing can happily dump 737s at ridiculous prices, as long as it's inside the US, but if BBD sells below cost in the US, well, here's a 220%* tariff on all your products sold henceforth, Sir.

*219,63, to be exact, one apologises for the exaggeration.

[aox]

Free market?

Never mind, once all Liam Fox's flights around the world start to pay dividends, collecting on the promises to discuss later that we might be able to have new trade talks once we're outside the EU, real world problems like this will recede into the long grass.

[RAT 5]

Rumours has it, the price was around 17M USD each for the Renton tractor,

Enter RYR stage left and snaps up 200 or so for their new lower demand routes in.............

[twochai]

The real irony is, of course, that a while back United was on the verge of placing a rather large order for C-Series aircraft. Enter Boeing, with an offer on 737-700s at a much cheaper price than BBD could offer on the C-100. Rumours has it, the price was around 17M USD each for the Renton tractor, vs. 20+ for the Qomposite Quebecois. And you get 25% more seats in the bargain; what's not to like?

But there's more... United eventually switched the order for 737-700's for larger 800's, once they realised that the much larger and heavier Boeing product could not do the job they planned for the C Series even at Boring's giveaway price..

This ridiculous action will give the C Series enormous credibility in the airline market! It could turn the C Series into a huge success in the long term!

[DroneDog]

Why don't we just remind the US that One of Europes biggest airlines Ryanair is 100% Boeing and as we are part of the EU...... oh wait a minute.....

[er340790]

I'm not sure how Boeing could convince the DOT that it was being 'harmed' by the C-Series... when they didn't even bid on the Delta contract. :hmm:

[SMT Member]

... when they didn't even bid on the Delta contract. :hmm:

Apart from the fact they actually did. By offering used Embraer E-190s and MD-95s (nee, Boeing 717s). No, I **** you not.

The chief aircraft buyer at Delta made it quite clear in a testimony, Boeing has absolutely nothing on offer in the 100-110 seat category and that the 737-700s, of which Delta has a grand total of 10, offered (and taken, order since changed to -800s, but thanks for the cheap aircraft Boeing!) are uneconomical except on a handful of performance limited services.

[ExDubai]

I'm not sure how Boeing could convince the DOT that it was being 'harmed' by the C-Series... when they didn't even bid on the Delta contract. :hmm:
Easy, the right people playing golf at Mar a Lago......

[Krueger]

How's that Brexit working for you now, Theresa?!:E

[Avenger]

This is all just about the US throwing the toys out of the pram and "Chairman Trump, Herr Trump" flexing his muscles..

https://www.bostonglobe.com/opinion/2017/01/30/the-return-special-relationship-between-and/F5QXTfmrdu8skebEpfON8L/story.html

More like:

https://www.youtube.com/watch?v=WITlM2pY_a4

[czarnajama]

Careful Boeing, Canada may retaliate!

While the F/A-18E/F order can be cancelled (as Trudeau has threatened), it's small beans compared with the massive orders on the books for Boeing airliners by Air Canada, which is well on the way to replacing all of its remaining Airbus and Embraer fleet with with Boeings and some Bombardier CS models. This the government is unlikely to be able to affect, unless it slaps a countervailing tariff on Boeing (probably not allowed under the WTO and NAFTA agreements). Other Canadian operators are largely Boeing customers, too, so the room for manoeuver is small.

This appears to be a holding action by Boeing to prevent sales of the technically superior C-series from taking off while at a crucial stage in its marketing, in the hope that it will not reach a critical mass for long-term success and further development by Bombardier of models which then would compete with Boeing. In the long run, after developing the 797 and exhausting the potential of the 737, Boeing will have to address the smaller narrow-body market, which in the meantime could be strongly occupied by Bombardier and Embraer.

[ExXB]

Sept 27 (Reuters) - Delta Air Lines Chief Executive Ed Bastian said on Wednesday that he does not expect the U.S. government to impose stiff duties on jets made by Bombardier .

Boeing’s complaint that the Canadian company is doing business unfairly was “absurd”, he said at the Skift Global forum in New York.

The dispute relates to C-series jets produced by Bombardier for Delta.

“How this is somehow a U.S. trade dispute (is) bizarre,” Bastian said, adding Boeing’s claims were the “ultimate hypocrisy.” (Reporting by Alana Wise in New York, additional reporting by Ankit Ajmera in Bengaluru; Editing by Savio D‘Souza)

Making the message longer

[Lonewolf_50]

Prime Minster Theresa May said she was "bitterly disappointed" over the US Department of Commerce proposal to impose the tax. She said the UK would work with Bombardier to protect "vital" jobs. The UK government and trade unions fear the imposition of tariffs could make the Canadian firm question whether to remain in Northern Ireland, where it employs 4,100 of its 28,000-strong workforce. It appears that this move is not final, but maybe there were follow up reports reflecting a lack of options to negotiate a different rate, as the position going forward was presented

Sir Michael said during a visit to Belfast that "Boeing stands to gain from British defence spending" but that "this kind of behaviour could jeopardise our future relationship" with the firm.
"We don't want to do that. Boeing is an important investor in the United Kingdom; an important employer in the United Kingdom.
"But we would prefer this kind of dispute to be settled on a negotiated basis and we will be redoubling our efforts with the Canadian government to bring about a negotiated settlement."
The ball is still in play it seems, and there is time left on the clock.


(As to tariff wars, they seem to be lose-lose propositions in a great many cases).

[WHBM]

We don't want to do that. Boeing is an important investor in the United Kingdom; an important employer in the United Kingdom.
Wherever is Boeing an important employer in the UK, apart from their sales offices ? And where are they actually investing in the UK ?

[airsound]

WHBM - may I suggest a visit to Wikipedia? It saysBoeing UK is the UK subsidiary of Boeing (https://en.wikipedia.org/wiki/Boeing), an American multinational corporation that designs, manufactures, and sells airplanes, rotorcraft, rockets and satellites.
The company in the UK is approaching 2,000 employees at a number of sites across the United Kingdom including London (https://en.wikipedia.org/wiki/London), Bristol (https://en.wikipedia.org/wiki/Bristol), Fleet (https://en.wikipedia.org/wiki/Fleet,_Hampshire), Frimley (https://en.wikipedia.org/wiki/Frimley), Farnborough (https://en.wikipedia.org/wiki/Farnborough_Airfield), Gosport (https://en.wikipedia.org/wiki/Gosport), Yeovil (https://en.wikipedia.org/wiki/Yeovil), and Manchester (https://en.wikipedia.org/wiki/Manchester)More at https://en.wikipedia.org/wiki/Boeing_UK

[RAT 5]

I admit I do not know enough about these issues, legally, but often we hear of folks appealing to the WTO about unfair practices. These are concerning international trade deals. If that is correct would Canada not have a route for repost?

[andyjoy]

if Delta pull the plug on the deal lets hope they order Airbus ! give Boeing something else to cry about :E

[MartinAOA]

What a move Donald! Milton Friedman/Ronald Reagan must be turning in their graves...
Wonder if the C series will hit Boeing hard eventually...since the legacy and profitable 737 series (which I love BTW) has been loosing ground to the A320...

[sfm818]

A few weeks ago the head of the DUP sent a letter for the attention of Pence. It set out the case that Northern Ireland has a fragile economy and suggested US Department of Commerce tactics could jeopardize the Peace Process. Explaining that to Trumps running mate is like explaining cows small & far away to Father Dougal, but this could be an opportunity for Mrs May to deflect criticism of the £1.5 billion cash for votes scandal and pre-allocate a small fraction of that payment by announcing her intention to place an order for CS-100’s to replace the 146's on 32Sqn. It would be revealing if the DUP did not give such a generous proposal their unconditional support.

[WHBM]

I think almost everyone here would wish any aircraft selection, civil or military, to be on the basis of competent technical studies, adequate budgeting and justification, and allied points. Having politicians make statements with them in response to lobbying is surely what all the posters above are railing against in the first place.

[PersonFromPorlock]

Free market?

Bombadier is, of course, perfectly free to buy its own US politicians.

[airsound]

I think this whole saga might just end in nothing. Before these swingeing taxes are actually imposed, the US International Trade Commission (a separate organisation from the Department of Commerce) has to rule that imports of aircraft from Canada threaten material injury to the domestic industry http://enforcement.trade.gov/download/factsheets/factsheet-canada-large-civil-aircraft-cvd-prelim-092617.pdf

Since Boeing chose not to offer Delta a viable, Boeing-built alternative to the C-Series C100 aircraft, I fail to see how any "material injury" has been suffered.

[cowhorse]

What a move Donald! Milton Friedman/Ronald Reagan must be turning in their graves...


Why? Under Reagan: US debt skyrocketed (he managed to triple it), we had the savings and loan crisis (bailing out private insurance companies with tax payer money), government spending went through the roof, he supported apartheid South Africa, death squads in El Salvador etc - and the Americans (and European politicians, to be fair) still consider him to be the hallmark of freedom, libertarianism, capitalism, free market etc. So the trade tariffs are perfectly in line with this sort of thinking.

It's all talk and no show: we have a system of corporate welfare where the CEO's of Boeing, Airbus etc will preach about how high taxes are killing the 0,001 % and at the same time hold their hand out for the taxpayer money.

[djmcker]

This is continuation of American bullying of Canadian imports in response to pressure from US interests. In this case, it's Boeing. In softwood lumber, we are in the 4th round of punitive duties dating back to 1982. The current rate is 24%. To me, this is consistent, bullying American practices as identified here by others. With the current US politics, like many other Canadians, I am doing my best to limit my travel to the US and the buying of US goods & services. I just declined long-haul travel through the US at the lowest price to pay more to travel through Europe. It's called "Miss America"!

[galaxy flyer]

Cow horse,

And exactly how does any of that relate to the issue. Are there death squads in Canada? The slightly related issue was the S&L bailout which was a result of S&L "deregulation" signed into law by Carter. Then, the S&Ls being given way too rope to hang themselves while insured by the Feds.

[sfm818]

I think almost everyone here would wish any aircraft selection, civil or military, to be on the basis of competent technical studies, adequate budgeting and justification, and allied points. Having politicians make statements with them in response to lobbying is surely what all the posters above are railing against in the first place.


That's the spirit. Problem is the original USAF tanker selection was not based on those principles, but successful lobbying on behalf of Boeing inside the beltway.

[Loose rivets]

This brings a whole new meaning to my jolly observation of some years ago. While buzzing in and out of City airport I watched as the Shorts sign was taken down and a HUGE B put in it's place.

By the end of Friday, they'd got as far as BOMB and then went home for the weekend. You'd have thought . . . no, perhaps not.

[tdracer]

I admit I do not know enough about these issues, legally, but often we hear of folks appealing to the WTO about unfair practices. These are concerning international trade deals. If that is correct would Canada not have a route for repost?
In this case it would be under the jurisdiction of NAFTA (North American Free Trade Agreement).
The basic claim is that not only were the C-series sold to Delta sold below cost, they were sold at a lower price than those sold to (domestic) Air Canada (and there is considerable evidence of that). Hence the dumping charge.
As Lone Wolf notes, this is far from final - there are still several more gates in the process. My bet is that there is already behind the scenes negotiation going on and some sort of deal will be struck before any money actually changes hands.

[zerograv]

Believe that Air Canada in the past bought quite a few Embraer EJets because Bombardier could not sell at lower price in the "domestic".

[Dockjock]

Yes I believe there is an export subsidy which is not available domestically. Perverse.

[_Phoenix]

I’m wondering how Washington arrived to 219.63% figure or it is just another locker talk. However, that’s fine, the ridiculous number is only a free advertising for C-Series. Why Bombardier's C-Series is so harmful for Boeing? Suddenly, is it in direct completion with B737s? How about A319/320/321 massive orders, some of them manufactured on American soil? What is so special about this C-Series?
Well, this aircraft has the perfect combination of short field capability, steep approaches, as well as long range. These characteristics open new interesting markets. Flight from city airport to multiple Caribbean islands, flight to Aspen ski resort operated direct from New York with a full load. C-Series could perform trans-Atlantic trips in a multiclass configuration and would be best-suited for linking secondary terminals, swapping one flight for as many as many as three via the major hubs. There’s also important interest in low-cost, single-class American operators, asking Bombardier to study potential routes
It also happens to be a more economical and passenger-friendly option than any other aircraft mentioned here.

[cowhorse]

Cow horse,

And exactly how does any of that relate to the issue. Are there death squads in Canada? The slightly related issue was the S&L bailout which was a result of S&L "deregulation" signed into law by Carter. Then, the S&Ls being given way too rope to hang themselves while insured by the Feds.I was referring to the above mentioned Reagan who is supposedly a free market god and of course he isn't. Yes, I don't think that death squads are mentioned anywhere by Adam Smith as a necessary part of capitalist sociey.

Trade tariffs are antithesis of the free market so it's kind of funny listening to American politicans who tend to hail Ayn Rand, Friedman etc at every given chance while every single major coorporate conglomerate depeneds on the state intervention in one way or another.

[JammedStab]

Dear airline executives. Boeing is attempting to prevent a new airliner option(one that happens to be quite a good product) from entering the market. The long term consequence for you is less options and higher prices. My suggestion for all executives starting today is to buy Airbus. Lets start first with the 747 line being killed off. Please order the A350 instead of 777(QANTAS would be a good first airline to do so). Please let it be known that billions of dollars are being lost by Boeing in orders lost.

The alternative is......being stuck with the duopoly forever.

Only the people paying the big bucks can have influence. Ryanair might be a good one to go the EasyJet fleet route. Airbusses seem to do well for EZ. Southwest might just be another one.

[Ozgrade3]

It's a simple question, is the Bombardier C series any good?

[cowhorse]

Shouldn't the market decide that, not the government?

[dc9-32]

And the winning tender for the new Air Force One goes to........ Boeing. The only bidder.

[Cows getting bigger]

Well, after the Marine One farrago of a few years back, are you surprised?

[The AvgasDinosaur]

Why don't we put a 208.139657% tax on all Boeing products ( seems like a nice round random figure) and add it to the savings made by brexit and start building Bristol and Vickers airliners our selves?

[16024]

Love it!

Because the "Ministry of Procurement" would change the specifications every Friday lunchtime meeting, and by the time the £50b 50-300 seat widebody city-hopper prototype had been nailed together at Warton and sent by road to hawarden to be mated to parts shipped in from china, we'd have a new government to cancel it all.

Edited again, because the quote from the previous post keeps disappearing! Without which this post is meaningless.
Ah, well.

[t1grm]

How's that Brexit working for you now, Theresa?!:E

We’re in the EU now and that’s done nothing to stop this. How is the EU protecting the interests of one of its member states in all this? Deafeningly silent it seems. So yes, better off out.

[Cows getting bigger]

Indeed. The EU is noticeable quiet on protecting one of it's member states.

[Ex Cargo Clown]

Can we not slap a tariff on RR engine exports to Boeing?

[sunnybunny]

Whoopee make RR products unaffordable to Boeing customers , how would that help? You don't think Boeing will just suck it up, they will simply pass it on to their customers. Anyway don't airlines buy the engines direct and ask for delivery to Seattle for Boeing to nail to the wings?

RR aren't the only engine fitted to Boeing so if one suddenly becomes more expensive then the other, US, manufacturers will jump with joy!

[Volume]

So now Delta wil found a Canadian airline which will buy all the C_Series aircraft and wet lease them to Delta creating jobs in Canada instead of the US...
Makes America look dumb again

[sfm818]

Indeed. The EU is noticeable quiet on protecting one of it's member states.


Verhofstadt made time recently to visit the land border in Ireland and assess for himself the illogical plan for a virtual border. People in Northern Ireland voted to remain and over the last sixteen months EU negotiators have consistently spoken up to protect their interests. It is the former Northern Ireland Secretary who campaigned to Leave, worked the phones alongside Duncan-Smith, and travelled on the Brexit Bus, that is noticeably quiet these days.

[NWSRG]

People in Northern Ireland voted to remain and over the last sixteen months EU negotiators have consistently spoken up to protect their interests.

No they didn't...some of them did. Equally, a fair proportion voted to leave. The referendum was a single constituency vote...so all this talk about this city / region / country voted to leave / remain is nonsense.

Some people in the UK voted to remain, some more voted to leave...that's the result, pure and simple!

[sfm818]

...some of them did.


Indeed. The majority who voted to Remain. Looking further down the road, on both sides of the border, the solution is obvious.

[fireflybob]

Some interesting information here:-

Bombardier (https://www.youtube.com/watch?v=Rzqp-IE2Gbk)

[spargazer]

Of course Boeing has never received a gumment subsidy. Oh no.
The C135 became the 707, the fans on the C5 galaxy went on to Jumbo jets, The US built civil airliners during WW2 and dumped 1000s of DC3s (C47) on the civil market afterwards, :ugh:
the US has been supporting Boeing since the 1930s, its a way of life out there.

[underfire]

Wonder what the US will do with the COMAC C919?

[ExXB]

So now Delta wil found a Canadian airline which will buy all the C_Series aircraft and wet lease them to Delta creating jobs in Canada instead of the US...
Makes America look dumb againCanadian airlines, despite their ownership, cannot operate domestic flights in the USA.

[underfire]

They just need to make an overture to some Southern State, get a few $billion to build an assembly plant, and do 'final' assembly in the States, call them made in the USA, and avoid the whole issue.

[paradoxbox]

canada will do nothing about this because its leadership is weak and ineffective and its industries lack the balls to stand up to bullying.

trump and his people are not stupid, no matter what you think of him. this is a cleverly calculated move by all the involved parties to benefit boeing and the US economy in the long run.

it frustrates the hell out of me that canada continues to allow itself to be outfoxed in the business world. well, when you lack aggression evolution tends to cull you out. we'll see if the leadership grows a pair.

[WHBM]

Apart from plying largesse on the relevant politicians, I wonder if Boeing did the same to P&W, to mess up the PW1000G Geared Turbofan, as the string of cockups in its production have impacted Bombardier greatly, as well as Airbus, but not Boeing.

[cowhorse]

Some interesting information here:-

Bombardier (https://www.youtube.com/watch?v=Rzqp-IE2Gbk)

Yes, every inch of the aviation industry is subsidised by the taxpayers, one way or another.

[lomapaseo]

trump and his people are not stupid, no matter what you think of him. this is a cleverly calculated move by all the involved parties to benefit boeing and the US economy in the long run.

it's not Trump and his people who are clever in causing this. It's a single manufacturer who is claiming they have been wronged.

Meanwhile Delta and P&W (EH) are hanging out on a limb waiting for this claim to be adjudicated fairly. Trump is smart enough to let the process proceed.

[galaxy flyer]

The C135 became the 707, the fans on the C5 galaxy went on to Jumbo jets, The US built civil airliners during WW2 and dumped 1000s of DC3s (C47) on the civil market afterwards, :ugh:
the US has been supporting Boeing since the 1930s, its a way of life out there.

Nonsense! The C135 was, at best, a cousin to the 707. Different fuselage, engines, etc. The C-5's TF-39 engines are, at best, a predecessor to the CF-6. Designing something for the military, then using the knowledge gained to design civil aircraft isn't a subsidy. The military got value for money.

Now, don't get me started on the real subsidies thru tax breaks, Ex-Im bank loans, etc. Yes, Boeing is subsidized, but not the way you think. And Boeing's subsidies don't allow them to sell under marginal cost.

[megan]

The C135 was, at best, a cousin to the 707Agree GF. The two aircraft looked similar to each other, and that was the extent of their similarity. Each built of entirely different spec metals in the airframe, along with what you mention.

[ImageGear]

So if , as is suggested, the C-Series are a step change in aircraft design, they will sell across the world, and once again the US domestic carriers will carry on with outdated 75 and 76 clones.

Irrespective of the funding issue, C-Series are simply technologically ahead of anything Bubba can produce hence the angst up in Seattle and on the hill.

Perhaps Bombardier should undertake a few more demo trips around the US and get more airlines to push for change. It makes more sense than trying to overcome the corruption and vested interests involved.

It took something similar with Airbus to make it happen for them, it just took a while. :ok:

[FE Hoppy]

Could you tell me which specific technology on the CSeries is ahead of anything Boeing can produce please?

[DaveReidUK]

Here's one for starters, that Boeing ruled out: Boeing hints at GTF 737 re-engining study (https://www.flightglobal.com/news/articles/picture-boeing-hints-at-gtf-re-engining-study-316070/www.boeing.com)

[_Phoenix]

Before entering production stage, a brand new B737 replacement has to be designed to the 21st century technology (FBW, better aerodynamics, larger windows, lighter materials, designed for modern process&tooling) and also to be certified to all new safety requirements introduced meanwhile, therefore multiple billions and years behind.

C Series | Technology - Commercial aircraft - Bombardier (http://commercialaircraft.bombardier.com/en/cseries/Technology.html)

[PersonFromPorlock]

...The US built civil airliners during WW2 and dumped 1000s of DC3s (C47) on the civil market afterwards, :ugh:
the US has been supporting Boeing since the 1930s, its a way of life out there.

The DC-3/C-47 was produced by Douglas (interestingly, and Lisunov, and Nakajima), not Boeing; dumping thousands of them on the civil market after the War only depressed the market for Boeing products.

[tescoapp]

Could you tell me which specific technology on the CSeries is ahead of anything Boeing can produce please?

Until you have had dump in the cruise in a CS toilet you really won't know how different the pax experience is. Cabin is lovely and comfy as well.

My mate that was flying said machine while I was enjoying the aft bog informed me that we were burning 1600kg per hour while doing so.

[er340790]

So, Methane-power! Whatever next? :E

[ImageGear]

I'm late to the party today gentlemen, but since my case has been rested by people in the know before I arrived, I will leave it at that.

[tescoapp]

Now this was a passing comment which I may have wrong...

Apparently they have made the bogs negative pressure zones and the air is taken separately back to the dump valve area to be dumped so it doesn't go into the recirc air.

The cabin overhead bins are massive as well and seem to have a sensible realistic weight limit on them.

[atakacs]

FWIW just had my first SLF CS130 experience today and I can vouch for the various comments posted above. Definitely a nice aircraft passenger wise.

[ShotOne]

So what's the EU doing about it? We're fully paid-up members. Question asked some pages back but conspicuously not answered other than to be diverted to an irrelevant debate on which parts of UK voted for Brexit.

[ExXB]

Just because you don't see anything in the press doesn't mean they are not doing anything. Negotiations through the media are a fool's game.

[sfm818]

So what's the EU doing about it?


Probably viewing this as a test of NAFTA see how Canada react. It is thanks to a United Europe that Boeing has to share half the market with Airbus. On the regional jet end of the spectrum, one of the original launch customers for the RJX was badly let down when the project was cancelled. Next port of call was Bombardier. Personnel were already training on the CRJ when that deal fell through. Reason? Embraer had made that European airline an offer they couldn’t refuse.

[WHBM]

The DC-3/C-47 was produced by Douglas (interestingly, and Lisunov, and Nakajima), not Boeing; dumping thousands of them on the civil market after the War only depressed the market for Boeing products.
That's a complete misrepresentation. The US industry moved straight to producing large numbers of airliners immediately post-war, in plants and with tools and skills which had been government funded for wartime production.

The Lockheed Constellation, Convair 240 series, Martin 404, DC4 and DC6 all made substantial (for the time) sales, and swept round the world. Only the UK had any other volume production of airliners at the time.

Boeing only produced small numbers of airliners between 1940 and the 707 in 1958, concentrating on military in that time.

[DroneDog]

So what's the EU doing about it? We're fully paid-up members. Question asked some pages back but conspicuously not answered other than to be diverted to an irrelevant debate on which parts of UK voted for Brexit.

As we are in the process of leaving would you expect them to go all out. I would not, they will keep their firepower for member states

[tescoapp]

As the CS is just as much competition to airbus as it is to Boeing and they have enough issues with what to do after Brexit I suspect they will do absolutely nothing.

I doubt very much if the headline amount will occur....


great advertising though for the CS series. I am sure boeing getting its knickers in a twist over it will actually generate sales because people will look at it seriously now instead of just looking at the A or B options.

[FE Hoppy]

Now this was a passing comment which I may have wrong...

Apparently they have made the bogs negative pressure zones and the air is taken separately back to the dump valve area to be dumped so it doesn't go into the recirc air.

The cabin overhead bins are massive as well and seem to have a sensible realistic weight limit on them.

"negative pressure zones" is meaningless nonsense. They are ventilated along with the ebays into the underfloor area by the outflow valve exactly like the Ejets 15 years earlier.

Nothing new here.

[FE Hoppy]

Here's one for starters, that Boeing ruled out: Boeing hints at GTF 737 re-engining study (https://www.flightglobal.com/news/articles/picture-boeing-hints-at-gtf-re-engining-study-316070/www.boeing.com)

The tech belongs to the engine manufacturer not the airframer. This doesn't answer my question.

[FE Hoppy]

Before entering production stage, a brand new B737 replacement has to be designed to the 21st century technology (FBW, better aerodynamics, larger windows, lighter materials, designed for modern process&tooling) and also to be certified to all new safety requirements introduced meanwhile, therefore multiple billions and years behind.

C Series | Technology - Commercial aircraft - Bombardier (http://commercialaircraft.bombardier.com/en/cseries/Technology.html)

787 does all of this.

Nothing Beoing couldn't do on a smaller airframe.

[DaveReidUK]

787 does all of this.

Nothing Boeing couldn't do on a smaller airframe.

True.

But we're talking about what the CSeries competes with today, not 5 years and 8-10 billion dollars down the line.

The tech belongs to the engine manufacturer not the airframer. This doesn't answer my question.

You don't think engine technology and economics matters as much to the market as the airframes that they hang off ?

[tescoapp]

"negative pressure zones" is meaningless nonsense. They are ventilated along with the ebays into the underfloor area by the outflow valve exactly like the Ejets 15 years earlier.

Its not meaningless its pretty standard environmental engineering in buildings. And it works.

Proof of the puddings is if someone takes a dump in the forward bog the flight deck doesn't know about it. Ejets you get the full flavour and sound effects in the cockpit.

[FE Hoppy]

Its not meaningless its pretty standard environmental engineering in buildings. And it works.

Proof of the puddings is if someone takes a dump in the forward bog the flight deck doesn't know about it. Ejets you get the full flavour and sound effects in the cockpit.

They are both engineered the same way. The only difference is the number of fans used. The Ejet has 3 per bay/bog. The CSeries has one for both bays with a backup.

I know both types intimately.

[tescoapp]

Well why do you smell ****e in the Ejet cockpit and you don't on the C series?

There must be some other structural difference either sealing or something else that stops the smell and noise going forward.

[FE Hoppy]

True.

But we're talking about what the CSeries competes with today, not 5 years and 8-10 billion dollars down the line.



You don't think engine technology and economics matters as much to the market as the airframes that they hang off ?

I think it matters much more which is why I made the point.
The statement was that the CSeries was way ahead of anything Boeing could produce. It's simply not true. The same suppliers offer the same tech to everyone. The aerodynamics and final production are about the only thing BBD could call their own. There is nothing novel, new or innovative in the airframe other than the size.
That BBD have been bailed out and have had to rely on dumping and a subsidised Air Canada order to make their books look anything other than dismal is why AB/Boeing don't offer a similar product.
If you told them both they could take a tax payer funded Billion dollar loss on the first couple of hundred orders I'm sure they would jump at it.

[Cazalet33]

There must be some other structural difference either sealing or something else that stops the smell and noise going forward.

Yes, but how are they going to stop the whining sound going aft?

[Heathrow Harry]

"If you told them both they could take a tax payer funded Billion dollar loss on the first couple of hundred orders I'm sure they would jump at it."

looked at the books on the 787 recently? Mr B is allowed to defer charges and losses to infinity

[cappt]

If Boeing went on the rocks and the government bought 49% of the 787 program then subsequently offered that jet to EU airlines at half price what do you think AB would do?

[SMT Member]

False equivalency; Airbus has a product in direct competition with the 787; Boeing has nothing on offer in the CS-size. Another analogy which hold more water, would be if the Canadian government bought 49% of the Dash-8 program, then offered Q400s at dumping price in competition with ATR-72s.

The result would, I suppose, be along the lines of lodging a complaint against Canada in the WTO, let the lawyers collect millions for a couple of years, before being allowed to slap a toll on e.g. Maple syrup, timber or tar sand oil. But it is highly unlikely to be in the +200% bracket, maybe a quarter of that, probably even less.

[cappt]

True if you comparing the much smaller 787 vs the 300+ seat 350. Sound familiar?
I hope the C series success as it is a truly innovative and fresh airliner but such an obvious dump is going to raise a lot of hackles.
Look for the Chinese to buy into the program and save it. Then they can dump it into the Asian market.

[SMT Member]

Would sound even more familiar if you compare, as they do, the 787 with the A330neo.

[galaxy flyer]

cappt,

If the Canadian taxpayer wants to underwrite the program, thus subsidizing the American passengers' ticket in this instance, why stand in the way? What if they gave the planes to DL on a zero initial cost lease like Airbus did with Eastern?

[cappt]

I'm pretty sure the Canadian citizen would not like that at all but they're all knowing leaders might think it's a good idea.
The end user PAX wouldn't see a dime of that subsidy.

[twochai]

Hey, we dumped $10 billion into GM and Chrysler when they were 'too big to fail', for what: a few assembly jobs, no IP and very little engineering input! With the auto industry, the long suffering Canadian taxpayer is so far $3 billion in the hole for not much benefit!

[galaxy flyer]

Cappt,

Anything that reduces DL's cost of business which will, in an industry as competitive as the airlines, be passed on in lower fares.

[A30_737_AEWC]

Agree GF. The two aircraft looked similar to each other, and that was the extent of their similarity. Each built of entirely different spec metals in the airframe, along with what you mention.

Ah, what exactly do you mean in respect of "....Each built of entirely different spec metals........' ?

We can start with skins/frames/stringers at aluminium alloy right ? Very likely to be based upon the QQ-A-XXX (or its predecessor) family of aluminium alloys, yes ? While manufacturers often put their own specification over the top of these generic specifications (Federal Specification in this case), what is so 'entirely different' between the material specs between these two aircraft types?

:confused:

[czarnajama]

Look for the Chinese to buy into the program and save it. Then they can dump it into the Asian market.

More likely is that when Bombardier needs to bail out, Boeing will buy it at a fire sale price. Boeing briefly owned De Havilland Canada in the 1980's before Bombardier took it over. Boeing didn't know what to do with the Dash-8 and how to handle Canadian unions, but it certainly would know what to do with the C-Series. I strongly suspect that all Boeing is doing with its trade actions (opposed even by "Aviation Week") is to hobble Bombardier at a crucial point of the CS program by creating FUD (recalling IBM and Microsoft in their most monopolistic phases).

[tescoapp]

but it certainly would know what to do with the C-Series

yep kill it as quickly as possible.

[czarnajama]

Nope. Far too valuable to kill. Like the 787, the CS has parts built in many places, including the US. All talk of trade sanctions would disappear if Boeing took it over. It would add an important element to Boeing's line-up. This might even be a bargaining chip in the NAFTA talks... "give us CS, we'll give you back NAFTA".

[AfricanSkies]

This is the same Delta that makes documentaries crying about how Middle East Airlines are threatening their American jobs? After ordering Canadian aircraft instead of US aircraft? Roflmao

[tdracer]

Ah, what exactly do you mean in respect of "....Each built of entirely different spec metals........' ?

We can start with skins/frames/stringers at aluminium alloy right ? Very likely to be based upon the QQ-A-XXX (or its predecessor) family of aluminium alloys, yes ? While manufacturers often put their own specification over the top of these generic specifications (Federal Specification in this case), what is so 'entirely different' between the material specs between these two aircraft types?

:confused:
For starters, the fuselage is completely different - the 707 fuselage is a different diameter relative to the KC-135, and while there was structural similarity between the KC-135 and early 707 wings, they were far from common - by the time they got to the 707-320 there was little in common with the KC-135.


czarnajama, after the Boeing experience with De Havilland, it would be a really cold day in hell before Boeing made that mistake again...

[cappt]

China is reportedly in talks to buy into Bombardier - Business Insider (http://www.businessinsider.com/china-comac-bombardier-canadas-investment-2017-5)

This was a couple months ago but look for a new push into China with the U.S. tariffs.

[underfire]

Just follow the Lazy B business model. (and Mercedes Benz, Toyota, et al)

Get a Southern State to give you $Billions in tax breaks and build a new facility for you.
Have the parts built worldwide and shipped there.

Do final assembly and call it "Made in America". I am sure that 90% is not manufacturered in Canada anyways.

Problem solved.

[Webby737]

Good idea, it worked for Airbus !

[twochai]

Do final assembly and call it "Made in America". I am sure that 90% is not manufactured in Canada anyways.

What is much more important than the detail manufacturing and assembly jobs is who owns the Intellectual Property! IP has more value than assembly, today. Just look at Apple!

[ExXB]

The C-series involves fuselage components built in China, wings build in the EU (Northern Ireland) and electronics built in the US. And that's just off the top of my head

[Jet Jockey A4]

Don't forget the engines too... Built in the USA.

[ExXB]

Talk about shooting yourself in the foot.

So the finacial aid provided by Quebec is protecting US jobs (as well as in China, EU and, of course, Quebec)

[Herod]

But if the electronics and engines are built in the USA, aren't they also shooting themselves in the foot?

[_Phoenix]

Some clarifications regarding the suppliers from China and US, also about the Quebec's billion.
A company SACC in Shenyang has been a long-time supplier of fuselage components for Bombardier’s Q400 turboprops, but it was unproven in the type of composite parts the CSeries use. Bombardier has repatriated the mid-fuselage work for the CSeries from SACC to its plant in Belfast. However, Bombardier could expand its activities at China's Shenyang Company, but I guess it could be related to possible deals to be announced during a visit of the Prime Minister Justin Trudeau to China.
https://ca.reuters.com/article/businessNews/idCAKCN1C117U-OCABS
The current reality: C Series is made up of 55% components from US suppliers. This is why imposing tariffs on the C Series will negatively impact over 22,000 high-skill jobs in the USA. Over half of the C Series is produced in the US...:ugh:
https://www.airinsight.com/us-manufacturing-impact/
Actually, Quebec’s Bombardier bailout isn’t as crazy as it sounds. The Canadian province receives a 49.5% stake in a limited partnership formed with Bombardier for the CSeries program, and a 20-year commitment to keep Bombardier's operations in Quebec. The deal also includes the transfer to the new limited partnership of thousands of employees, vendor contracts, and clients along with the assets and intellectual property of the design, manufacturing, and marketing of the CS100 and CS300 planes.

[underfire]

make that 300%

WASHINGTON (Reuters) - The U.S. Commerce Department on Friday notched up proposed trade duties on Bombardier Inc CSeries jets to nearly 300 percent, affirming Boeing Co’s complaint that the Canadian company received illegal subsidies and dumped the planes at “absurdly low” prices.

The decision underscored the defensive trade policy of U.S. President Donald Trump, and could effectively halt sales of Bombardier’s innovative new plane to U.S. airlines by quadrupling the cost of the jets imported to the United States.

The Commerce Department proposed a 79.82 percent antidumping duty on Friday, on top of a 219.63 percent duty for subsidies announced last week.

[J.O.]

It was suggested elsewhere that a Canadian based leasing company could assume the aircraft slots currently assigned to Delta and then lease them to Delta. Not much the Commerce Department could do about that.

[underfire]

Currently Delta leases 191 aircraft. Should not be a problem to lease them as you noted.

[Peter47]

I see that the tariff is now proposed to increase to about 300%. This is based on Delta receiving a reported 75% discount on the list price. I understand from insiders that the average agreed discount is around 50%, (Don't ask me why manufacturers quote such high list prices.) Furthermore, as in many industries there are discounts for early purchases. Apart from trying to establish a line this reflects the fact the early operators will incur higher debugging costs as it takes a while for a product to mature. 50% is a high discount for this but not unprecedented.

There is another way of looking at it. Environmentalists claim that aviation is under taxed (although if you look at it as a proportion of low cost ticket on a budget airline you would may well argue otherwise). It is certainly true that some subsidies have been gained via the military procurement/research route). Is proposing tariffs a good way of taxing aviation for Government's requiring revenue, particularly as the idea comes from within the industry itself?

A lot of airfares are sold at marginal cost, that is a very low rate. (This is particularly true where there are low fixed charges such as taxes and airport passenger charges.) Could you argue that offering low fares is dumping? Well an economist who understands marginal costing would disagree and it they are popular with passengers, but it is exactly the same argument. Think of fares prior to deregulation - and bucket shops, dubious affinity charters and the like.

The problem, particularly in America but unfortunately spreading globally, is that the game isn't just producing a better product more efficiently but using other means such as legal action to secure an advantage often against agile competitors. Trump, before he became President, was the classic example of this. I really hope that everything blows over and that tariffs are imposed because the loser will be aviation industry.

[A0283]

BBC reports an additional 80% today.

Further tariff of 80% imposed on import of C-Series plane - BBC News (http://www.bbc.com/news/uk-northern-ireland-41532309)

[underfire]

Read post #130

[czarnajama]

Talk about shooting yourself in the foot.

So the finacial aid provided by Quebec is protecting US jobs (as well as in China, EU and, of course, Quebec)

This is a major reason why Canadian federal and provincial government assistance to Bombardier has been highly controversial in Canada. Like the B787, the C-Series is a global product. I think Boeing's strategy really is to force Bombardier to sell out to Boeing, which in the past has owned a major chunk of what is now in Bombardier. Boeing's chances of succeeding are very good, given the current NAFTA situation, especially if it allows the Liberals in Canada to drop a hot potato while facing a resurgent Conservative Party. Obviously all tariffs will vanish once Boeing succeeds. The C-Series and its future developments will fill out the bottom of the narrow-body market, while the 797 fills out the "mid-market". Say bye-bye to the 737 and its limitations.

[Dannyboy39]

Boeing have never "under sold" a single 737 to any carrier. Never ever ever.

Bearing in mind the actual list price is about 130% of the what the company actually wants to sell it for.

[twochai]

I am sure that 90% is not manufacturered in Canada anyways.

Probably true, however the most important parts of the aerospace production chain are the high value Intellectual Property components, like: business strategy, design, engineering, final assembly and marketing, all reside in Canada.

Unlike the Canadian automotive industry where it's largely 'build-to-print' with minimal local IP content.

[etudiant]

Surely this is mostly a shot across the bow aimed at China.
Canada is a convenient 'whipping boy' target, there are plenty of US/Canada back channels to ensure that the right message is received there.
What matters is that other countries now have to factor in possibly insane tariffs when considering commercial aviation ventures.

[Ian W]

A lot of airfares are sold at marginal cost, that is a very low rate. (This is particularly true where there are low fixed charges such as taxes and airport passenger charges.) Could you argue that offering low fares is dumping? Well an economist who understands marginal costing would disagree and it they are popular with passengers, but it is exactly the same argument. Think of fares prior to deregulation - and bucket shops, dubious affinity charters and the like.


I don't think that a low airfare which is transient revenue can be compared to the capital cost of an aircraft which remains as an asset to the purchaser for probably a decade and will then be resold.

[oleary]

Exclusive: WTO rules Boeing's state subsidies illegal - BBC News (http://www.bbc.com/news/business-38131611?utm_content=buffered0be&utm_medium=social&utm_source=twitter.com&utm_campaign=buffer)

[Jet Jockey A4]

Excellent!

[West Coast]

Why is it "excellent "?

[Stumpy Grinder]

Don't forget the engines too... Built in the USA.


Half the story, modules are manufactured in USA but C Series GTF engine is assembled in Mirabel Quebec.

[J.O.]

Exclusive: WTO rules Boeing's state subsidies illegal - BBC News (http://www.bbc.com/news/business-38131611?utm_content=buffered0be&utm_medium=social&utm_source=twitter.com&utm_campaign=buffer)

That story is almost 12 months old.

[ExXB]

Has the ruling been overturned? Has the WTO ruled that the subsidies are in fact OK under its rules?

Of course two wrongs don’t make a right.

Oh, can someone remind me why Boeing moved their HQ to Chicago? Oh, that is different isn’t it.

[oleary]

True, but relevant to this story.

[VacantStand]

From Telegraph article: Monarch owner's losses could be less severe than thought on back of Boeing deal. (sorry - can't hyperlink as I'm new here)

Quote:
'Monarch Airlines’ private equity owner slashed its exposure to the airline through a complex deal with aviation giant Boeing just a year before it collapsed...'

'Keen to get the upper hand in its battle for orders with rival Airbus, Boeing injected the money through Petro Jersey Ltd, Monarch’s offshore holding company, after Greybull stuck a bargain deal with the US giant to pay far below the market value for an eventual total of 45 new planes, according to The Sunday Times.'

Pots and Kettles?

[Dubaian]

Further to above post another report in the Times yesterday (Monday - can't link - firewalled) that Boeing subbed Monarch's finance provider a very hefty bung when Monarch were planning to buy 30 No. 737 Maxs. Makes their hounding of Bombardier even nastier. Isn't airline finance a seriously dirty business

[b1lanc]

Interesting opinion piece in aviation week.

Opinion: Why Boeing vs. Bombardier Is Really About China | Commercial Aviation content from Aviation Week (http://aviationweek.com/commercial-aviation/opinion-why-boeing-vs-bombardier-really-about-china)

[ironbutt57]

Has the ruling been overturned? Has the WTO ruled that the subsidies are in fact OK under its rules?

Of course two wrongs don’t make a right.

Oh, can someone remind me why Boeing moved their HQ to Chicago? Oh, that is different isn’t it.


it's a little bit different than being handed 5 billion cash to develop a new airplane...and yes the ruling was overturned..

[ExXB]

IB57 could you provide a link to the WTO decision being overturned? Thank you.

From Reuters report at the time:The WTO said the subsidy came in the form of a renewed cut in Washington state’s main business tax for aerospace agreed in 2013, when Boeing was considering where to base assembly of the latest member of its long-haul jet family.

It is the third swathe of taxpayer support for Boeing or its European rival Airbus (AIR.PA) faulted by the WTO in a record transatlantic trade spat dating back 12 years, and involving mutual accusations of tens of billions of dollars of aid.

The WTO did not give a value for the banned aid in its latest ruling, but the EU estimated it at $5.7 billion out of an $8.7 billion tax package in Washington, where most Boeing factories are based.

Airbus said the measures had cost it $50 billion in sales.

[Lonewolf_50]

Airbus said the measures had cost it $50 billion in sales The A380 problem isn't Boeing's fault, and I question this claim's veracity. That said, I suspect that this post has the right of it (http://www.pprune.org/rumours-news/600028-us-dept-commerce-slaps-220-tax-bombardier-c-series-8.html#post9920325): Isn't airline finance a seriously dirty business

[oleary]

'We are not going to pay any tariff,' Delta CEO says of CSeries planes - Business - CBC News (http://www.cbc.ca/news/business/delta-ceo-comments-1.4349404)

[Lonewolf_50]

According to a report from Reuters, a Bombardier spokesman said the manufacturer was confident that the U.S. International Trade Commission (ITC), which must affirm the duties for them to take effect, will "reach the right conclusion given that Boeing did not compete for the Delta order." Mr oleary, while I suspect that the Delta CEO's prediction is right, the reason why might be worth noting. There's another body who gets to review this whole tariff thing. (Delta has lawyers too, and congress-critters whom they can call, just as does Boeing).

[a330pilotcanada]

Good Evening All:

A very interesting article from October 11th in the Ottawa Citizen.

Boeing is the ?king of corporate welfare? or Boeing has never received subsidies ? you decide | Ottawa Citizen (http://ottawacitizen.com/news/national/defence-watch/boeing-is-the-king-of-corporate-welfare-or-boeing-has-never-ever-received-subsidies-you-decide)

David Pugliese, Ottawa Citizen
More from David Pugliese, Ottawa Citizen
Published on: October 11, 2017 | Last Updated: October 11, 2017 8:37 PM EDT

Another day and another article about Boeing’s dispute with Bombardier and the Canadian government.
As readers are well aware, Boeing complained earlier this year to the U.S. about what it has labelled as subsidies provided to Bombardier by Canadian governments. As a result, the Trump administration has hit the Canadian company with a penalty of almost 300 per cent in duties on its C-Series civilian passenger aircraft.
In an article today about the ongoing dispute I had this line near the end of the story: “Boeing’s critics point out it receives billions of dollars of subsidies from the U.S. government.”
That has prompted a rebuke from Boeing spokesman Scott Day, who accused me of “spreading false information.”
According to Boeing it hasn’t received any subsidies. Day noted that, “U.S. Export-Import Bank financing does not go to Boeing. Boeing doesn’t receive a single penny in funds or financing from the Export-Import Bank.”

He also added that “the World Trade Organization has dismissed the vast majority of subsidy claims against Boeing.”
For starters, reporting accurately what Boeing’s critics are saying isn’t “spreading false information.”
Boeing’s critics, both in Canada and around the world, have indeed repeatedly pointed out that the company receives billions of dollars of subsidies from U.S. governments at the federal, municipal and state levels.
The U.S. watchdog group Good Jobs First has continually reported on the billions of dollars that it says Boeing receives in government subsidies. In 2015, the St. Louis Business Journal, citing a Good Jobs First study, noted that Boeing is the nation’s largest winner of state and local tax incentives, receiving in excess of $13 billion U.S.. Most of that was related to Boeing’s commercial aircraft manufacturing, the newspaper noted.
In the article, I also quoted Marc Allen, Boeing’s president of international business, who stated the company took its action against Bombardier to ensure a level playing field in the aerospace industry and Boeing believes that global trade only works if everyone plays by the same rules.
Boeing’s critics say that isn’t true and Boeing is really out to destroy it competitor Bombardier and significantly hurt Canada’s aerospace industry. They too could accuse me of “spreading false information” by reporting on Boeing’s view, although they haven’t yet. Maybe that email is to come.
Interestingly, Day’s email arrived just as Bloomberg TV was reporting that the United Kingdom’s Labour Party has now labelled Boeing the “king of corporate welfare.”
Labour’s trade spokesman Barry Gardiner accused the U.S. aerospace giant of “egregious hypocrisy” in pursuing the illegal-subsidies claim against Bombardier Inc.
Boeing has been denounced by many in the UK government and opposition MPs for putting thousands of UK jobs at risk with its action (the wings for C-Series aircraft are built in Northern Ireland).
Gardiner told Bloomberg that “no aircraft these days comes to market without support from government,” including those produced by Boeing.
“Boeing has absolutely been sucking at the milk of corporate welfare in America for far too long,” Gardiner said on Bloomberg TV. “They need to understand that the way in which they are playing this does not sit well with U.K. parliamentarians.”
But according to Boeing executives the 300 per cent duty now tacked on to Bombardier aircraft being sold in the U.S. is about all about “following trade rules” and not about punishing its competitors. “This trade case is about fairness,” Day noted. “Taking government subsidies and using them to offer below-production-cost pricing on aircraft is a violation in the U.S., and the laws are well-known.”
Both sides have their view.

[ExXB]

The United States of subsidies. aka Pot calling the kettle black.

https://www.washingtonpost.com/blogs/govbeat/wp/2015/03/17/the-united-states-of-subsidies-the-biggest-corporate-winners-in-each-state/?utm_term=.897f932d10a8

[er340790]

MONTREAL — Bombardier Inc. has announced it will partner with Netherlands-based aerospace giant Airbus on its CSeries program. The Canadian Press 0
about an hour ago by: Canadian Press
MONTREAL — Bombardier Inc. has announced it will partner with Netherlands-based aerospace giant Airbus on its CSeries program.

[_Phoenix]

Airbus to buy majority stake in Bombardier CSeries program | CTV News (http://www.ctvnews.ca/business/airbus-to-buy-majority-stake-in-bombardier-cseries-program-1.3634867)

[shamrock7seal]

Boeing is in trouble now after Airbus announced it will build the C-series in America thus avoiding the tax!

[parabellum]

Surely, if Airbus builds in America it will be subject to USA tax?

[aox]

Hmm, perhaps Boeing didn't think of that - of exploring doing such a deal itself, I mean.

[tsgas]

Boeing's bullying tactics has come back to haunt them.. Canada won't repeat the Avro mistake again.

[tsgas]

Surely, if Airbus builds in America it will be subject to USA tax?

why would they have to pay an import tax on airplanes made in America ? Airbus will rub Boeing's nose into the ground.

[czarnajama]

Hmm, perhaps Boeing didn't think of that - of exploring doing such a deal itself, I mean. Because they didn't read my posts here and in Aviation Week ! ;-) I'm shocked, actually, and it reflects very badly on Boeing's management. It may also have been favoured by the affinity between Quebec and France. I'm curious what the political fallout in Canada will be, and no doubt the governments there will concentrate on investment recouped and try to forget about jobs lost. A very smart move on Airbus' part, given that their bottom end was not covered either.

[tdracer]

The partnership is expected to result in significant CSeries production costs savings by leveraging Airbus's global supply chain expertise, but the company won't be paying any money for the acquired stake or absorb Bombardier's (TSX:BBD.B) large debt.

Airbus will acquire a 50.01 per cent interest in the CSeries Aircraft Limited Partnership, which manufactures and sells the plane in exchange for access to Airbus's sales, logistics, procurement and support expertise.

Bombardier will own 31 per cent and the Quebec government's investment agency will hold 19 per cent, down from 49.5 per cent when it invested US$1 billion in the program.

So, Bombardier and Quebec just gave Airbus a controlling half of a multi-billion dollar investment in return for management expertise? Really? How much trouble must the C-series really be in to make that in any way attractive to Quebec and Bombardier? Quebec in particular gave away 60% of something they just paid a billion dollars for. Canadian taxpayers must be loving this, especially when Airbus has already stated they plan to move at least part of the production jobs away from Canada.


Strange. Very, very strange...


Hmm, perhaps Boeing didn't think of that - of exploring doing such a deal itself, I mean.
Unlike Airbus, Boeing has actual experience trying to build aircraft in Canada. It didn't go well - I doubt Boeing would be in any way interested in repeating the experience.

[tdracer]

why would they have to pay an import tax on airplanes made in America ? Airbus will rub Boeing's nose into the ground.
Only final assembly would be in the US. They could still put a big tariff on the components imported from Canada - unless of course they move the subassembly work to the US as well.
Delta better not be in a hurry to get their aircraft - setting up an aircraft assembly line is a multi-year process.

[underfire]

So, Bombardier and Quebec just gave Airbus a controlling half of a multi-billion dollar investment in return for management expertise?
In trouble, a bit...brilliant market move, priceless. As a startup, they were acquired by an industry leader to add to an already impressive product line. They will benefit from the Airbus experience, design, and buying power. Like the A320neo, and A321neo, Airbus schools Boeing...again.


Only final assembly would be in the US. They could still put a big tariff on the components imported from Canada - unless of course they move the subassembly work to the US as well.

You are kidding right? Boeing only does final assembly with parts everywhere in the world. Sounds like more excuses for the Lazy B lack of business planning and loss of market share.

Canadian taxpayers must be loving this, especially when Airbus has already stated they plan to move at least part of the production jobs away from Canada.
Would they be better off losing the investment? There will likely be 2 production lines, one that sells to the World, and one that sells in the US. Face it, Boeing got schooled...again. Another Airbus (and Bombardier) win... Boeing loss.

Delta better not be in a hurry to get their aircraft - setting up an aircraft assembly line is a multi-year process.

Really? Given the C Series production timeline, with anticipated deliveries, does it really make any difference where final assembly is? You are aware that Airbus has already set up a facility to build aircraft in the US? One can imagine how many States in the US would roll out the red carpet for another aircraft production facilty, especially ones that do not have to deal with that Union.

[neville_nobody]

Other than sticking it to Boeing, what's in this for Airbus to build an aircraft that competes with your own line?

My only thought would be they can now stifle any expansion of the C-Series and prevent it getting bigger and competing with A320/A321.

[tdracer]

Given that the existing orders have all been sold at substantially below production cost, I wonder how many years of losses Airbus will be willing to eat to see the program turn profitable before they just pull the plug?


I wonder if Quebec threw language into the agreement requiring Airbus to keep x thousand jobs in Quebec? If not, they could be in for a rude surprise.

[oleary]

American trade bullying, .... that's never happened before. :hmm:

Now it's payback time. :E

[underfire]

Given that the existing orders have all been sold at substantially below production cost,

Selling below cost, look at the 787, which may never break even on costs. How about the 747-8...selling below costs, wrong argument.

[oleary]

Other than sticking it to Boeing, what's in this for Airbus to build an aircraft that competes with your own line?

My only thought would be they can now stifle any expansion of the C-Series and prevent it getting bigger and competing with A320/A321.


In its current configuration the C-Series and 320/321 don't compete. Neither Airbus nor Boeing build an aircraft in this class.

You can be fairly sure Airbus didn't do this out of charity. :rolleyes:

[underfire]

Given that the existing orders have all been sold at substantially below production cost,

Selling below cost, look at the 787, which may never break even on costs. How about the 747-8...selling below costs, wrong argument.

My only thought would be they can now stifle any expansion of the C-Series and prevent it getting bigger and competing with A320/A321.

The current model is not a threat to Airbus , it is a threat to Embraer...

The larger series, which many think is a threat, will be a well placed advancement marker in the product line that will compete with the aircraft coming online from China. Face it, the ac is brand new in every respect, not simply modifying a design from the mid 1970's (B737)

[tdracer]

Selling below cost, look at the 787, which may never break even on costs. How about the 747-8...selling below costs, wrong argument.

787 is cash flow positive and has been for a few years - to the tune of something around $25 million per aircraft. 747-8F was cash flow positive at 1/month (but not at the current .5/month) - if Boeing is right and the market picks back up they'll make money on it again. If the market for freighters larger than the 777F doesn't pick up, they'll pull the plug.
Boeing pulled the plug on the MD-95/717 after the MacDac merger because they didn't see it as a long term money maker.
Airbus has no skin in the game to keep the C-series going at a loss. If they don't see it turning around quickly and making significant money long term they only thing to stop them from pulling the plug is if someone was smart enough to put a huge penalty clause in the agreement.

[underfire]

Boeing wrote off $2.1 Billion on the 748. The breakeven cost for development was 400 748....400! Sales to date have been 135.

Boeings accounting on the 787 vs reality:

While the production cost and sales price may be a break even or profit, (October 2015) the $32 Billion left from design cost still is outstanding.

"After losing about $25 million on each jet it delivered in the second quarter, Boeing projects a watershed moment for the plane by year-end: It expects to finally roll out a Dreamliner that brought in more money than it cost to build.
That’s when Boeing begins the slow climb out of a deep financial hole that already totals just shy of $32 billion and will increase further when Boeing reports quarterly financial results Wednesday.

"The most conservative of IISL’s models, the one most favorable to Boeing, projects that after delivering 2,000 Dreamliners, the jet-maker will still have “a total program loss of approximately $5 billion.”

ahh, the good old days of optiism when the 787 were selling....

To date, there are 1283 total sales of all variants of the 787... with 600 AFTER the breakeven point on cost of production. (with 683 selling at an average of $25 million loss ($1.7billion loss) hence the $2 billion loss recorded on the 787...see how accounting works.

https://www.seattletimes.com/business/boeing-aerospace/will-787-program-ever-show-an-overall-profit-analysts-grow-more-skeptical/

[RickNRoll]

You wanted a penalty of 22%? I thought you said give them a penalty of 220%!

[msbbarratt]

This is a potential disaster for Boeing. Their deadliest competitor has picked up a share of a fantastic design, for nothing. The design now has the backing of that major competitor, removing all doubt in the market place over the viability of the product. It will be mass produced, so it is now a safe purchasing option.

Outside the USA there are fewer and fewer reasons to buy a Boeing 737. This might even provoke a few cancellations.

The ridiculous thing is that Boeing could have done a deal with Bombardier themselves instead of trying to grind the design out of existence. They're in desperate need of a new design themselves, why not partner Bombardier? What possible reason that actually matters could they have had for not doing a deal with Bombardier?

Instead now they're clearly on the path to exiting the market and they have nothing to replace their current model to become competitive again.

Meanwhile Airbus has picked up a huge technological advantage for free. They can grow the C series design if they want, they can adapt the design; it's a major coup for Airbus.

I think Boeing's board has some explaining to do to its shareholders.

[BRE]

Face it, the ac is brand new in every respect, not simply modifying a design from the mid 1970's (B737)


Um, the 737 design project started in 1965 with an order from launch customer Lufthansa, first line service was in February of 1968. The fuselage is actually a shortened 707 from the 50s.

Ironically, Boeing considered selling the whole 737 project to Japan in 1970 when sales were slow, much as Bombardier has done now.

[tescoapp]

looks like they are going to build the C series for the USA in Mobile.

That will remove the tariffs won't it?

[PEI_3721]

“So, Bombardier and Quebec just gave Airbus a controlling half of a multi-billion dollar investment in return for management expertise?”

Now watch out for the next ‘defensive’ move. An agreement on some ‘cheap’ second hand Rafale aircraft to offset the company purchase, and also defend against any price increase in the recent F18 deal?
Or even Rafales positioned in Canada to be used for NATO training / aggressor tasks, (they have the airspace); this would also contribute to the % spend required by NATO.

Minimise loss of ‘Trump’ face, because more production jobs have been brought into the US ...

Keep your enemies close, your friends even closer.

[BluSdUp]

What a glorious day it is.
Bombardier should have been able to sell the excellent aircraft.
For different reasons it did not.
There was a good chance it would have ended up like the Fokker 70 and 100.
Or the Dornier 728.

But no, Boeing came to the rescue! Brilliant, absolutely brilliant!

[WHBM]

This is a potential disaster for Boeing. Their deadliest competitor has picked up a share of a fantastic design ...I think Boeing's board has some explaining to do to its shareholders.
It's the sort of business event that happens where the lawyers get too strong a hold on a company. They have felt that a significant competitor can be addressed not by developing adequate products of their own, but by stiffing their competitor with legal manoeuvring and buttering up their own regulators. The legal team probably felt they had delivered a real coup when they persuaded the DoJ to give their judgement, little realising what Airbus and Bombardier were doing behind the scenes, because this deal was NOT started only after the DoJ judgement.

[Pizzacake]

There's laws in the US about switching the place of manufacture to avoid tariffs that airbus/bombardier will have to circumnavigate but im sure if some journos know about this their lawyers will have scoped it out already.
This is a win win, bombardier gets to have a jet in the market, support from a big player and airbus gets to let someone else take all the risk to bring a product to market and then acquire a stake for very little risk in what has the potential to be a very very successful aircraft, once it's proven that its in demand and operating well.
The sticking it to Boeing bit will just be the cherry on top.

[G-CPTN]

Does the 'Boeing tax' only apply to complete aircraft?
What about components and finished sections (such as wings)?

[oldchina]

This is brilliant on the part of Airbus. They will decide future C-series pricing.
Airbus will look at what's good for themselves, not Bombardier or Quebec.
Like Boeing with the MD series, the weak product line will not be allowed to
threaten the master's profitability.
If keeping the C-series alive suits Airbus it will survive. If not, it will not.

[BRE]

This class sure is busy. Can the following aircraft hope to compete with the C Series:
- hypothetical relaunch of the B717
- NAC F130 (the often promised relaunch of the F100 that has not materialized yet)
- Embraer E190
- Mitshubishi Regional Jet
- Sokhoi Super Jet
- The Chinese Jet

[Torquelink]

Once the assembly line is established in Mobile, the tax treatment will be exactly the same as for A320s and A321s already assembled there so the financial and legal aspects are already well understood. Actual manufacturing jobs will likely stay in Canada and N Ireland provided those are efficient plants - and they will now have Airbus's know-how to ensure that they are. With Airbus's supply-chain power and a ramp-up in production as a result of increased sales which the Airbus link will bring, production costs will fall. The prospects for this aircraft family are transformed by this development and the ramifications for Airbus and Boeing are enormous.

Watch for Boeing to raise anti-trust issues - their last hope!

[WHBM]

It is ironic that, having created uncertainty by saying the Airbus UK plant in Broughton was somehow at risk due to Brexit, they suddenly end up adding to their UK plants instead.

Is there any synergy between Broughton and Belfast in wing design and manufacture ? Ironically, 60 years ago, the Belfast plant (then Shorts) was a subcontractor to the Broughton plant (then De Havilland) for the production of Comet fuselages.

[Torquelink]

Is there any synergy between Broughton and Belfast in wing design and manufacture ? Ironically, 60 years ago, the Belfast plant (then Shorts) was a subcontractor to the Broughton plant (then De Havilland) for the production of Comet fuselages.

I remember reading a while back that that the ex-Shorts plants building the C Series wing was one of the most efficient plants in Europe and the prospect of a Broughton-Belfast centre of wing excellence is intriguing.

However, I guess we should remember that, insofar as I understand it, Airbus aren't buying the factories - just a majority share in one of the products made in them. The Canadian and Belfast plants will still be building other Bombardier aircraft parts too. Still, they should benefit from Airbus's expertise.

[Alloa Akbar]

Now you just know that the Boeing lobbyists are going to be getting out of bed soon, and chomping on the bait offered above..:E

[MarkD]

American trade bullying, .... that's never happened before. :hmm:

Now it's payback time. :ETrump-ites will say "more jobs in a red State = our strategy paid off"

[underfire]

USA Today article:

The move by Bombardier could possibly circumvent duties being imposed on the C Series. The C Series headquarters will remain in the Montreal area but a second assembly line for the 100- to 150-seat plane will be set up at Airbus' facility in Mobil, Alabama, so the plane can be sold in the United States.
Enders said the talks started in August and were not motivated by what competitors are doing. He rejected a deal to acquire the C Series three years ago but said circumstances have changed, saying the plane is now certified and receiving rave reviews.

Airbus is not assuming any debt as part of the deal and it has an option to buy out Bombardier after 7-1/2 years and the Quebec government in 2023.

[msbbarratt]

There's laws in the US about switching the place of manufacture to avoid tariffs that airbus/bombardier will have to circumnavigate but im sure if some journos know about this their lawyers will have scoped it out already.

I think it's moved on beyond that now. The US market is important, but not as significant as the whole rest of the world. Even if Boeing somehow managed to keep the C series out of the USA even if it is made in Mobil, that's largely irrelevant in comparison to the bigger picture. Which is that AirBardier now have a hugely impressive line up to sell to the rest of the world and the resources to manufacture them. Boeing simply have nothing in comparison. And even if they started today on a 737 replacement it's going to be 5 to 7 years before anything is starting flight testing.

This is now a matter of will Boeing be lucky, yes, lucky enough to sell aircraft within the USA. They're on the very cusp of exiting the global single aisle market. If the US government doesn't play hardball with AirBardier, Boeing's long term single aisle market presence within America is under serious and deadly threat.

With zero public announcement of a 737 replacement airlines will increasingly wonder why Boeing are still pushing a design with its origins in the 1950s. Boeing needed to replace it all the way back in 1992, but didn't. This deal is the future which that laziness has earned them.

Develop, or die. It applies to every company of every size. Even Boeing.

[Pizzacake]

This deal also brings political leverage in airbus favour. It can be spun as bringing jobs to the US and supporting US airlines in ensuring they have a market leading product at a competitive price, a product "'made in America" to boot.
All the these jobs earned and secured without risking Boeing jobs as they don't operate in this market.
It will be interesting to see how the current US administration plays this. Leaving well alone would be best, but I imagine the Donald will try to take credit. To not support this deal will be to risk jobs, something he's staked his presidency on.

[pax britanica]

re the NI dimension, it great to see jobs saved there and of course they will have their own special brexit deal (ie they will basically stay in the Eu under another name so they should be secure)

A big big lesson here

Could the UK stick it to Boeing and the US Govt like pan European giant AB with all of the strength of the EU behind it, not in a million years.

[KKN_]

All very interesting and a bit surprising.

Is it really necessary that Boeing themselves played it badly? Were they maybe accustomed to certain proceedings (well standards) when lobbying an administration? Could it be just possible that they relied on established trade interest representation, rather discrete, pragmatic, and behind the scenes - but got caught out by the ways of the incumbent administration.

Second, if the AB-BBD deal was already being worked on earlier (August), and thus not a reaction to the tax - was that tax conversely a reaction to the emerging deal, an attempted deterrent? Means (and political determination) for the underlying business intelligence would surely be present.

Now for AB, the jury is out whether they are rather interested in keeping a competing C-Series in check, or in strenghtening their own product line with an efficient modern product at the low capacity end. The mentioned buy-out options may indicate that the C-Series could live long and prosper as future A100, A130, A150 ... and AB has no pressure to decide on that for years to come. They can comfortably watch what the competition does, e.g. going clean-sheet for a competing design, much like in the case of the NEO/MAX. That flexibility is quite an advantage.

[MartinAOA]

With zero public announcement of a 737 replacement airlines will increasingly wonder why Boeing are still pushing a design with its origins in the 1950s. Boeing needed to replace it all the way back in 1992, but didn't. This deal is the future which that laziness has earned them.

Develop, or die. It applies to every company of every size. Even Boeing.

I agree, partially. However, IMHO Boeing still earns/earned a lot of cash by producing a nice jet which has roots in 1950s, with a few minor/major tweaks in between. Maybe this is a good time for Boeing to burn some cash on Embraer/Mitsubishi/Cessna/Learjet?

The fact is that Airbus is one big gov subsidized behemoth. With that in mind it's easy to "justify" their losses with the A380, etc. ...

[KelvinD]

The fact is that Airbus is one big gov subsidized behemoth.
How do they compare to Boeing's $73 Billion subsidies. interest free loans, tax give aways? (from 2010 to date)

[a330pilotcanada]

MartinAOA

Please read post # 156

[SMT Member]

With that in mind it's easy to "justify" their losses with the A380, etc. ...

I'm a bit intrigued about the 'etc' bit. It's no secret Airbus has received launch aid for every single product it has brought to market. It's also no secret, the aid was to be repaid with interest, and that every frame sold would earn the lender a royalty.

To my knowledge the governments which provided launch aid have made not just a little, but very considerate amounts of money on Airbus on every single program except the original A300 and the A380, and that those profits vastly outstrip the 'losses' on the A300 and A380. I've put losses in brackets, as it doesn't really apply to the A300, without which there'd be no Airbus. So whilst that program may have been at a loss, it launched a company where the cumulative profits are far, far higher than that loss.

But, please, do go ahead and elaborate.

[Lonewolf_50]

Back to the topic at hand, I find it interesting that Delta believes they have a route structure that this C class aircraft will fit into for their business model, and apparently other airlines do not, as of yet?

Any ideas on what's behind that?

[msbbarratt]

Maybe Delta simply want to differentiate themselves from the other US airlines. If it flies far enough and carries the right number of passengers, the comfort, quietness and fuel efficiency has got to count as pluses.

[MartinAOA]

Any ideas on what's behind that?

"Delta Air Lines Inc. is eyeing New York and Los Angeles as the main bases for Bombardier Inc.’s new jetliner next year, offering a glimpse of how carriers can add service economically with the midsize plane. Dallas is also likely to get a lot of C Series flights, Delta said in an internal memo to pilots, a copy of which was reviewed by Bloomberg News. That sets up a test of the carrier’s ability to use the single-aisle aircraft to attract customers in the backyard of American Airlines Group Inc. and Southwest Airlines Co."

https://www.bloomberg.com/news/articles/2017-08-14/delta-memo-signals-plan-for-new-bombardier-jet-in-l-a-new-york

https://www.flightglobal.com/news/articles/delta-to-base-first-cs100s-in-new-york-439306/

[SMT Member]

At a guess, few airlines have wished to bank on the viability of the programme. It's been fraught with difficulties almost since inception, making it a bit of gamble. Since most airlines are extremely cautious of risk, that's probably the main reason it hasn't sold more than the 300 odd copies it has.

Why Delta sprung for it is probably a simple question of arithmetic, opportunity and need; Delta perceived a need for something around 100 seats, the C-series is just about the only game in town and BBD offered some very intriguing numbers, backed by their desperation to break into the US market with a major.

[SWBKCB]

"US-built CSeries still subject to import tax: Boeing"

https://www.flightglobal.com/news/articles/us-built-cseries-still-subject-to-import-tax-boeing-442258/

[msbbarratt]

Well, they would say that wouldn't they? I can't think what else Boeing can say about the matter. It's also largely irrelevant. Airbus clearly have global ambitions for the C Series, the US market would simply be a nice extra. If Boeing ends up being restricted to just the US market (that being the only place they may find themselves able to sell a 60 year old design), that's a big win for AirBardier.

Given that the formal process of deciding whether or not the tariff will actually be applied has not been completed, it's still too early to say. The US has concluded that there was state aid. Now they have to decide whether or not Boeing were "damaged" by that state aid. Given that Boeing has nothing in the same class in its airplane catalogue, it's still entirety possible that the tariff won't be applied at all. That'd be bad news for Boeing.

[WHBM]

Differing corporate cultures. I wonder if this pleasant tribute from Airbus to Boeing just went completely over their heads. Is it a European thing ?

https://www.youtube.com/watch?v=lTmri6E8Xzk

[rmac2]

Love the Airbus approach to congratulate Boeings centenary.

Looks like Airbus are confident and relaxed and have Boeing on the ropes .. lol

[DaveReidUK]

I'm sure we'll see a similarly glowing tribute from Boeing on Airbus's centenary in 53 years time.

Oh, hang on ...

[underfire]

In its complaint, Boeing claims that Bombardier sold the CS100 for just $19.6 million. That's far less than the $33.2 million the Chicago-based aviation giant says it cost Bombardier to make the plane and a mere fraction of the CS100's $79.5 million sticker price. As a result, Boeing claims the Montreal-based company is dumping its product on the US market to the detriment of US aviation workers.

That is the foundation of the complaint, (and the 300% levy) not the $1 Billion bailout from the govt.

In addition:

Looking for a blockbuster sale to help build traction for the plane in the US, Bombardier went all in on a pitch to United Airlines. Sensing the new competition, Boeing gave United a whopping 70% discount on the 40 737-700s. While large airlines like United never pay list price, 70% off is the aviation equivalent of a Black Friday sale price.

Dumping? Paying 30% of list vs paying 25% of list...

What it all really means: Instead of keeping the Canadian jet grounded, Boeing pushed C Series into the arms of its greatest rival.

[dash34]

Boeing have started advertising to Canadians both in the MSM and on-line to try to repair the PR damage they have done to themselves.

It isn't going to work. Canadians are well aware of what Boeing has done here because it has been widely reported on all media. It will be politically difficult now for the government to purchase products from Boeing, and the major carriers might think twice about their next purchase.

[Jet Jockey A4]

It will be politically difficult now for the government to purchase products from Boeing, and the major carriers might think twice about their next purchase.

LOL... They better not contact me because I'll tell them where to stick it!

Also both WestJet and Air Canada are going to be delivered new 737s and some 787s and I think if this government had any balls they would slap a 300% import tax on those imports too.

[WHBM]

LOL... They better not contact me because I'll tell them where to stick it!
Boeing have today launched a sudden PR campaign across Canada, having realised the enormous reputational damage their overzealous lawyers have done to the company image.

Boeing Launches Outreach Campaign in Canada (http://boeing.mediaroom.com/2017-10-10-Boeing-Launches-Outreach-Campaign-in-Canada)

From what Trudeau has said, though, it's the end though for further consideration of the Boeing military fighters.

"We have obviously been looking at the Super Hornet aircraft from Boeing as a potential significant procurement of our new fighter jets," Trudeau said on Parliament Hill last month.

"But we won't do business with a company that's busy trying to sue us and trying to put our aerospace workers out of business."
As trade irritants pile up, Trudeau calls Trump to sell Bombardier-Airbus deal - Politics - CBC News (http://www.cbc.ca/news/politics/boeing-trump-bombardier-trudeau-1.4359467)

[oleary]

This is the payoff for 150 years of non-stop trade bullying.

Americans need to learn there is a price to be paid for egregious behaviour. :ouch:

[oleary]

LOL... They better not contact me because I'll tell them where to stick it!

Also both WestJet and Air Canada are going to be delivered new 737s and some 787s and I think if this government had any balls they would slap a 300% import tax on those imports too.

As much fun as that would be, Canada does not produce anything in those classes so we could not prove "economic harm".

[Jet Jockey A4]

Well the reverse is also true... Boeing does not produce an aircraft in the C Series class.

[oleary]

Ummm, ..... that has been the point from the very beginning.

[Intrance]

I assume the poster meant it like this; The point being that if that US DOC 300% will stand, it should be no problem to raise the same kind of tariff against those 737/787 orders, baseless or not.

[SMT Member]

Here's the essence of the supreme arrogance in US 'dumping' law:

If a foreign company sells below cost, it's dumping and liable to tariffs.
If a US company sells below cost, that's fine - move along, nothing to see here.

I'm sure there's logic in there somewhere, but one would probably need to be a particularly vulturous lawyer to see it.

[Pizzacake]

To the multiple posters saying "slap tariffs on the Boeing aircraft AC are getting"....... Air Canada would be the ones paying the tariff, that just counter intuitive. If they are due delivery in the not too distant future they need them delivered so the counter of " well they can buy airbus then" doesn't work as airbus have orders to be fulfilled already and can't just magic up extra aircraft for AC.

[Snyggapa]

As much fun as that would be, Canada does not produce anything in those classes so we could not prove "economic harm".

Ah, but is it being prevented from producing anything in those classes by the "dumping".

Of course the argument works both ways - and starts to get silly if you base "economic harm" on whether it might have stopped someone doing something that they didn't do.

[BRE]

Interestingly, the NYT had a longish article on the 17th which I could not find on the business pages when I looked for it yesterday (found it only now through keyword search). Slate does not even have an article by today. Does not seem to be that much of a big deal in the US.

[Fun Police]

i'm not surprised really, since the flow of self inflicted crises of incompetence that are coming out of Washington since January are so much more interesting to the angry people on both sides that a trade spat like this would not make the news.

[oleary]

I assume the poster meant it like this; The point being that if that US DOC 300% will stand, it should be no problem to raise the same kind of tariff against those 737/787 orders, baseless or not.


Ummmm, .... no. It is not Boeing who would pay the 300% tariff, it is the buyer.

Tariffs are generally applied to PROTECT HOME INDUSTRY. Canada does not produce anything in the 737/787 class so there is no home industry to "protect".

A tariff such as you propose would simply be "punitive". It would hurt Air Canada, its paying passengers and Canada's reputation as a "fair trading partner".

Finally, if Canada were to apply a 300% tariff against Boeing they would have to, under international trade law (WTO), also to apply it to Airbus.

[msbbarratt]

Hmmm, well Canada now has an interest in all of Airbus's product line up, even if none of it is made there. And whatever the "rules" are a country can do whatever it wants if it decides that the reaction of other countries is not going to be too troublesome. The US does that all the time!

But I doubt anything like this will happen. Boeing's name now has a lot of mud stuck to it, and that's certainly going to be part of an airline's purchasing considerations. That's probably enough for the Canadian government to achieve the desired effect in the long run without resorting to imposing punitive trade tariffs against Boeing.

There's probably some other US airlines that are worried about being forced to buy Boeing. It's hard to be competitive on international routes if you're unable to buy the best aircraft due to domestic political machinations. A trade war is not in their interests either.

[oleary]

Hmmm, well Canada now has an interest in all of Airbus's product line up, even if none of it is made there.

.... How so?

[Lonewolf_50]

Is this normal for new aircraft development?
About 2 years late and about 2 billion over budget? (https://www.bloomberg.com/news/articles/2017-10-15/bombardier-is-said-to-explore-options-for-aerospace-businesses) Chief Executive Officer Alain Bellemare is trying to stop a cash drain after its C Series jetliner came to market more than two years behind schedule and about $2 billion over budget. I suspect that it's within at least two sigmas, but maybe that's just not understanding the "how to get a new airliner to market" as well as I might .

I noted from that article that Bombardier's revenues from aircraft are abou 57% of the business.

[triploss]

First the 787, then the CS100. Yeah, it seems it's normal nowadays.

[underfire]

I see that yesterday, Boeing just upped the breakeven on cost to produce the 787 to 1400 units. What this means is that they expect to sell one for as much as it costs to make it, at 1400 units. Total sales of all variants currently sits at around 1283 units, so they are still losing money on each aircraft that they sell.

THEN, the profits from each sale will be applied to the $29.6 Billion design/certification costs.

[UnderneathTheRadar]

What this means is that they expect to sell one for as much as it costs to make it, at 1400 units. .

Are you sure about that? In the rest-of-world speak, that means that at 1400 units, the costs of design and certification are covered and then they can start making a profit......

[underfire]

Actually, looking at this again, I do think you are correct, and I got spun around on sales vs deliveries.....

thanks for correcting me.

[tdracer]

Which is what I posted in response to you several pages back - Boeing is currently cash flow positive on the 787 to the tune of roughly $25 million per aircraft - and that number is getting better with nearly every delivery.
No question Boeing botched the 787 development big time - and paid a hefty price for that. But it's far from the long term disaster that people like you have made it out to be.
The real question will be what happens with the 777X (and before you dismiss the 777X as being as simple derivative, there is little common between the current 777 and the 777X other than the fuselage diameter - it's pretty much a new aircraft). Will it be close to on-time/on-budget, or will it be a repeat of the 787 fiasco? It'll likely be a couple more years before that question can be answered...

[WHBM]

Which is what I posted in response to you several pages back - Boeing is currently cash flow positive on the 787 to the tune of roughly $25 million per aircraft - and that number is getting better with nearly every delivery.
That's not quite an accurate representation. While they may be "cash positive" on current work, in terms of labour, components, current assembly hall costs, etc, there is the most enormous debt for the R&D, prototype production, and all the money borrowed to fund the production of earlier aircraft that didn't get delivered or any revenue for a long time. That has to be paid back from current production revenue. It's also difficult to know correctly how cash positive each aircraft is because the price each carrier has paid for each is commercially very confidential. But the USD 25m is still very much being taken up by the cost of all the borrowing used to fund those past costs. I don't think the shareholders have seen anything yet, and in fact Boeing has extended the production run over which they are absorbing these past expenses.

[Airbubba]

Looks like Airbus is having its usual problems with corruption, that may not help according to this article from Canadian news organization Thompson Reuters:

OCTOBER 22, 2017 / 8:09 AM

Airbus turmoil overshadows bid to rescue CSeries

Tim Hepher

PARIS (Reuters) - Airbus’s (AIR.PA) coup in buying a $6 billion Canadian jetliner project for a dollar stunned investors and took the spotlight off a growing ethics row last week, but internal disarray has raised questions over how smoothly it can implement the deal.

The European planemaker secured the deal for Bombardier’s (BBDb.TO) CSeries program by pledging to throw its marketing might behind the loss-making jets, just as the Airbus sales machine reels from falling sales and internal and external corruption investigations.

Chief Executive Tom Enders has urged staff to keep calm in the face of French reports describing payments to intermediaries and growing concern over fallout from the investigations.

But the mood at the group’s Toulouse offices remains grim.

“Bombardier asked for an ambulance and Airbus sent a hearse,” said one person with close ties to the company.

In the first nine months of the year Airbus accounted for only 35 percent of global jet sales in its head-to-head battle with U.S. rival Boeing (BA.N).

The Airbus sales operation is demoralized and in disarray, multiple aerospace and airline industry sources said, with some blaming Enders for turning the company against itself.

Hopefully the Canadian taxpayers will continue to bail out Bombardier as they have in the past. They lose money on every plane but make up for it with volume, right? ;)

[Heathrow Harry]

suits everyone........... the 737 is the most outrageous

[DaveReidUK]

Of course other regulators are not required to accept the FAA’s verification.

But these days, they almost invariably do. :O

[tdracer]

Answering my own question, with a bit of Googling:

"The Federal Aviation Administration said it will allow Boeing to have the 777X wide-body aircraft certified as a new version of the current 777 instead of as a brand-new airplane."

FAA to Fast Track Boeing 777X Certification - Agency to Treat New Design as Version Upgrade (http://www.frequentbusinesstraveler.com/2014/05/faa-to-fast-track-boeing-777x-certification/)

There is something called the "Changed Product Rule" or CPR that governs derivative design certification. The details can get messy, but what CPR basically says is that if a system is unchanged it can retain it's original cert basis, but if it's changed then it has to step up to the latest regulations. There is a process for exceptions where the airframer can show that it's impractical to step up to the latest regulations and it wouldn't meaningfully improve safety to step up. CPR is a 'harmonized' regulation - meaning EASA applies it as well. CPR has been applied to all the major derivative programs over the last 15 years - 737 MAX, A320 NEO, A330 NEO, 747-8/8F, 767-2C.
All that being said, there isn't much on the 777X that's common to current production. So while the 777X may have the same TCDS as the 777, most of the cert basis will be new.


Every Boeing aircraft certified in the last 20 years has been certified to both FAA and EASA - the lone exception is that the 767-2C/KC-46 will be certified FAA only since it's not expected to have any EASA customers.


But these days, they almost invariably do.Ah, actually many of them don't. Obviously when you certify EASA, anyone in EASA must accept the cert, but many other countries do at least a cursory review of the cert basis before they accept it. Russia and China do much more than a cursory review - getting approval for the 747-8/8F and 787 required weeks of meetings and reviews with the Russian and Chinese authorities...


Now that sounds like illegal state aid.You might be interested to know that EASA and most of the other non-US regulatory authorities bill Boeing for their costs associated with certifying. In fact I believe the FAA is the only authority that doesn't bill foreign airframers for their services...

[Turbine D]

WHBM
That's not quite an accurate representation. While they may be "cash positive" on current work, in terms of labour, components, current assembly hall costs, etc, there is the most enormous debt for the R&D, prototype production, and all the money borrowed to fund the production of earlier aircraft that didn't get delivered or any revenue for a long time. That has to be paid back from current production revenue. It's also difficult to know correctly how cash positive each aircraft is because the price each carrier has paid for each is commercially very confidential. But the USD 25m is still very much being taken up by the cost of all the borrowing used to fund those past costs. I don't think the shareholders have seen anything yet, and in fact Boeing has extended the production run over which they are absorbing these past expenses.
I am not sure your rendition is accurate either. In the United States, Generally Accepted Accounting Principles (GAAP) require companies to treat R&D as an expense in the year spent. This impacts a number of things leading to sometimes wildly different calculations of economic profit. So, is R&D an expense or is it an investment, an investment into the future as it was with the Boeing 787 aircraft? Some think that R should be expensed each year, but D capitalized once the asset being developed has been deemed technically and commercially feasible. A simpler approach is to treat both as capital or an investment.
If you look at Boeing, 2008-2010 were the years of heavy 787 R&D expenditures. If you look at these years using GAAP (which the US government does) for Boeing's net income it looks like this:
2008 $2.8B
2009 $1.3B
2010 $3.3B
Boeing had had a terrible 2009, right? But actually, it related to the timing of the largest R&D investment:
2008 $3.7B
2009 $6.5B
2010 $4.1B
Now if you adjust net income for the R&D volatility, e.g., Net Income + R&D
2008 $6.4B
2009 $7.8B
2010 $7.4B
2009 was a better year than 2008
But now you amortize the R&D investment over it life to be realistic to obtain Boeing's Adjusted Earnings:
2008 $3.0B
2009 $4.8B
2010 $4.4B
The point is, Boeing invested heavily in 2009 to position themselves for cash flow generation for the future years.
Aside from this, Boeing has experienced really good earnings growth from 2009 to today when you take out the volatility of R&D investments year to year.

[CONSO]

In the United States, Generally Accepted Accounting Principles (GAAP) require companies to treat R&D as an expense in the year spent.

But do not forget to mention the miracle of " program accounting " virtually invented/used by Boeing.

[ExXB]

You might be interested to know that EASA and most of the other non-US regulatory authorities bill Boeing for their costs associated with certifying. In fact I believe the FAA is the only authority that doesn't bill foreign airframers for their services...

Thank you, but it the don't do a new certification then not billing for these costs could constitute illegal state aid.

[Heathrow Harry]

"The point is, Boeing invested heavily in 2009 to position themselves for cash flow generation for the future years."

The point is they HAD to spend zillions as the 787 was a monstrous turkey at the time and they shoved the necessary (and very painful) costs into the R&D column so they can work accounting magic over future years

[Turbine D]

Wonder how Airbus handled the A-380 monstrous turkey on their books and quickly moved on the A-350? Is Airbus really a profitable company?

[CONSO]

Few understand how in simple terms the ' launch aid ' game under GATT92-WTO works - or is supposed to work and how Airbus has played the game380 and other models. Here is my cliff note version- having been long ago a bit involved in analysis.
1_ launch aid can take othe form of low cost commerical/governt loans with me unique terms.

2 - company bases loan on a ' calculation ' that in effect says- we can design, build, sell and deliver xxx airplanes by yy years and need zzzzzzz$$$$ loan or other goodies.

3-_ We will pay a low interest rate on loan starting in tt years or after the first rr deliveries

4 - BUT - if we can not or do not pay off KK% of such loan by xxx deliveries and or yy years, then the government loan is forgiven.

5- SO if one games the system such that above dates- $$ are not met . . . :E .

[underfire]

In fact I believe the FAA is the only authority that doesn't bill foreign airframers for their services...

The FAA doesnt charge per se, as manufacturers self certify. The FAA authorizes a certification process. The FAA then approves the results of the cert process. ( that was a big issue with the 787) The FAA does have the 'undue burden' clause, which allows them to charge if the fees become too extensive.

While the FAA doesnt charge a fee for cert, they are paid an hourly rate for time and travel to review the results of the cert process. The manufacturer has to pay for the techincal expertise that the FAA requires for cert review. So while not paying the FAA directly, they are paying the expert. It is cheap to say the least.

[Heathrow Harry]

Turbine "Wonder how Airbus handled the A-380 monstrous turkey on their books and quickly moved on the A-350? Is Airbus really a profitable company"

To be fair the A 380 didn't have a lot of technical issues whereas the 787 was a disaster in development and introduction

Airbus's problem is selling the damn thing in large enough numbers - so their upfront costs are probably close to budget but their income is way down on projections (pretty much the opposite of Boeing's problem). Can't stick that into R&D so I assume they'll play games with depreciation, interest rates and exchange rates

[underfire]

Looking back at this, how is this a bail out by the Canadian government when it acquired 49.5% ownership of the C Series in the deal?

About 2 years ago, wasnt there rumours that Boeing would buy the C Series?

Looking back, Boeing bought McDonald Douglas to kill the competition, no?

[tdracer]

To be fair the A 380 didn't have a lot of technical issues


Convenient memory? Because I remember lots of technical issues (landing gear issues which drove a major redesign of the gear and wire bundles too short, to name just two), initial deliveries years late, and billions in cost overruns. The 787 was a disaster, but the A380 wasn't much better. Further, the 787 has a fighting chance to sell sufficient numbers to pay back the investment - something that'll never happen on the A380.

[tdracer]

Looking back, Boeing bought McDonald Douglas to kill the competition, no?
What competition? MacDac was nearly out of the commercial game at the time of the merger (which was more like MacDac buying Boeing with Boeing's money if you look at who ended up in charge after the merger).

[Turbine D]

HH,
To be fair the A 380 didn't have a lot of technical issues whereas the 787 was a disaster in development and introduction
As we age, our memories become shorter as to what documented history says:

In 2014, the aircraft was estimated to have cost $25bn (£16bn – €18.9bn) to develop. In 2015, Airbus said development costs were €15bn (£11.4bn – $16.95 Bn), though analysts believe the figure is likely to be at least €5bn ($5.65 Bn) more for a €20 Bn ($22.6 Bn) total. In 2016, The A380 development costs were estimated at $25 billion for 15 years, $25–30 billion, or 25 billion euros ($28 billion).

On 14 February 2006, during the destructive wing strength certification test on MSN5000, the test wing of the A380 failed at 145% of the limit load, short of the required 150% level. Airbus announced modifications adding 30 kg (66 lb) to the wing to provide the required strength.

Initial production of the A380 was troubled by delays attributed to the 530 km (330 mi) of wiring in each aircraft. Airbus cited as underlying causes the complexity of the cabin wiring (98,000 wires and 40,000 connectors), its concurrent design and production, the high degree of customisation for each airline, and failures of configuration management and change control. The German and Spanish Airbus facilities continued to use CATIA version 4, while British and French sites migrated to version 5. This caused overall configuration management problems, at least in part because wire harnesses manufactured using aluminum rather than copper conductors necessitated special design rules including non-standard dimensions and bend radii; these were not easily transferred between versions of the software.

Airbus announced the first delay in June 2005 and notified airlines that deliveries would be delayed by six months. This reduced the total number of planned deliveries by the end of 2009 from about 120 to 90–100. On 13 June 2006, Airbus announced a second delay, with the delivery schedule slipping an additional six to seven months. Although the first delivery was still planned before the end of 2006, deliveries in 2007 would drop to only 9 aircraft, and deliveries by the end of 2009 would be cut to 70–80 aircraft. The announcement caused a 26% drop in the share price of Airbus' parent, EAD.

As Airbus prioritised the work on the A380-800 over the A380F, freighter orders were cancelled by FedEx and United Parcel Service, or converted to A380-800 by Emirates and ILFC. Airbus suspended work on the freighter version, but said it remained on offer, albeit without a service entry date. For the passenger version Airbus negotiated a revised delivery schedule and compensation with the 13 customers, all of which retained their orders with some placing subsequent orders, including Emirates, Singapore Airlines, Qantas, Air France, Qatar Airways, and Korean Air.

Still want to discuss turkeys?