US Dept of Commerce slaps 220% tax on Bombardier c series
Join Date: Mar 2007
Location: Europe
Posts: 256
Likes: 0
Received 0 Likes
on
0 Posts
Let's pretend for a moment we are talking cars here. 19.6 for a new model hatchback vs. 22 for a full size the facelifted version of which is due out next year.
Which is the better deal, assuming the manufacturers play in the same market segment, i.e. not comparing a VW Golf and a Hyundai Sonata?
Which is the better deal, assuming the manufacturers play in the same market segment, i.e. not comparing a VW Golf and a Hyundai Sonata?
Join Date: Jan 2018
Location: UK
Posts: 1
Likes: 0
Received 0 Likes
on
0 Posts
I don’t get the whole ’its not fair you got help off your Government’ argument from America, what about all the profit from overseas arms which could never happen without the products getting huge initial funding from the US military, without which the companies involved could never develop their products for later profitable export?.
It's all about making profit. A company has to make profit by whatever legal means possible. There is no profit in being "fair" (at least not a short term one); if a company can make (or protect) a bundle by starting a trade dispute, then that is exactly what the company must do, especially if its unable to raise profit by more conventional means.
So if you're a Boeing board member now finally, at long long last, seeing that the 737 cash-cow is now under serious threat from the competition (the consequence of never having done a fresh ground-up design), you'll cast your eye around for other ways of protecting that cash-cow and phone the lawyers. Pride is another component of it. An additional possibility is that they've not been able to afford a fresh ground-up design just at the moment (the execution of the 787 programme was unfortunately pretty poor, and all this fuss might just be more fall-out from that).
Having plumped for the unconventional trade-dispute route to profits, Boeing's board may now have to explain its thinking to shareholders. They cannot claim that the strategy chosen was worthwhile; they had their arses handed back to them by the ITC after a damned good thrashing. Claiming that it had been a good idea could be considered to be foolish.
Boeing are left with the 737-MAX doing well in the market place, but the writing is surely on the wall. Many would argue that the writing was written in 1992 by Airbus on Boeing's factory wall in French Blue paint with letters 38 feet 7 inches high. That's when the A320 entered service. If Airbus can take a chunk out of Boeing, why not someone else? It's taken 25 years for that someone else (Bombardier, who added their own 37 foot 8 inch letters in red in July 2016) to come along, but here they are and they're not going away.
Boeing need a new design, and I suspect they're now going to have to take a big profits hit to do it. They could have done it for far less, at leisure, any time in the past 20 years, but didn't. Penny pinching, pound (erm, dollar) foolish. If they don't, well they may as well switch off the lights and walk away. Develop, or Die.
On the Topic of Fairness
Fairness encompasses cooperation. The aero-engine business is also pretty competitive, but there are some admirable aspects to the way the major companies conduct themselves. There is a commitment to safety, and they have and will team up when necessary to solve safety problems when a single company is unable to sort an issue by themselves.
An unstinting commitement to help out a commercial competitor is very fair indeed, but is it profitable? Most definitely yes, over the long term; look at the growth of the airline industry since the 1950s, aided massively by the big safety improvements. Co-operation pays off in the end.
What I suspect will happen over the coming decades is that Boeing and Airbus might decide that their best interests lay in teaming up (perhaps more so Boeing than Airbus). If the Chinese really get going in airliner design then they will be a very powerful competitor indeed. Especially so given their own domestic market, regional dominance, and a legal environment with differing views as to what sort of marketing techniques are acceptable.
So if you're a Boeing board member now finally, at long long last, seeing that the 737 cash-cow is now under serious threat from the competition (the consequence of never having done a fresh ground-up design), you'll cast your eye around for other ways of protecting that cash-cow and phone the lawyers. Pride is another component of it. An additional possibility is that they've not been able to afford a fresh ground-up design just at the moment (the execution of the 787 programme was unfortunately pretty poor, and all this fuss might just be more fall-out from that).
Having plumped for the unconventional trade-dispute route to profits, Boeing's board may now have to explain its thinking to shareholders. They cannot claim that the strategy chosen was worthwhile; they had their arses handed back to them by the ITC after a damned good thrashing. Claiming that it had been a good idea could be considered to be foolish.
Boeing are left with the 737-MAX doing well in the market place, but the writing is surely on the wall. Many would argue that the writing was written in 1992 by Airbus on Boeing's factory wall in French Blue paint with letters 38 feet 7 inches high. That's when the A320 entered service. If Airbus can take a chunk out of Boeing, why not someone else? It's taken 25 years for that someone else (Bombardier, who added their own 37 foot 8 inch letters in red in July 2016) to come along, but here they are and they're not going away.
Boeing need a new design, and I suspect they're now going to have to take a big profits hit to do it. They could have done it for far less, at leisure, any time in the past 20 years, but didn't. Penny pinching, pound (erm, dollar) foolish. If they don't, well they may as well switch off the lights and walk away. Develop, or Die.
On the Topic of Fairness
Fairness encompasses cooperation. The aero-engine business is also pretty competitive, but there are some admirable aspects to the way the major companies conduct themselves. There is a commitment to safety, and they have and will team up when necessary to solve safety problems when a single company is unable to sort an issue by themselves.
An unstinting commitement to help out a commercial competitor is very fair indeed, but is it profitable? Most definitely yes, over the long term; look at the growth of the airline industry since the 1950s, aided massively by the big safety improvements. Co-operation pays off in the end.
What I suspect will happen over the coming decades is that Boeing and Airbus might decide that their best interests lay in teaming up (perhaps more so Boeing than Airbus). If the Chinese really get going in airliner design then they will be a very powerful competitor indeed. Especially so given their own domestic market, regional dominance, and a legal environment with differing views as to what sort of marketing techniques are acceptable.
Last edited by msbbarratt; 4th Feb 2018 at 07:30.
Join Date: Sep 2014
Location: UK
Posts: 98
Likes: 0
Received 0 Likes
on
0 Posts
There is a widespread myth that companies are legally obliged to do whatever they can to make a profit, but it is not true. There is no country that has a law which compels companies to make a profit.
Clearly, companies must make a profit to stay in business, but they are free to choose how much or little profit to make, and also to choose whether to follow more or less ethical methods, providing they do nothing illegal.
The normal and ethical business method is to simply make a better and/or cheaper product. There is no requirement to adopt "unfair though legal" methods.
Clearly, companies must make a profit to stay in business, but they are free to choose how much or little profit to make, and also to choose whether to follow more or less ethical methods, providing they do nothing illegal.
The normal and ethical business method is to simply make a better and/or cheaper product. There is no requirement to adopt "unfair though legal" methods.
And you'll have difficulty convincing any court that losing money is in the best interest of the Shareholders.
Fiduciary Responsibility is the general term for looking after the owners assets and company and not putting the public good, or non-beneficiaries before the owners.
