Bombardier’s Big Win Against Boeing

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The United States International Trade Commission (USITC) ruled in favor of Bombardier in the dispute with US manufacturer Boeing. Thus, the Quebec multinational will not have to pay countervailing and anti-dumping duties of 292% on sales of the C Series.

Boeing had filed a complaint against the Quebec aircraft manufacturer for unfair competition.

At the end of last year, the US Department of Commerce claimed that 100-150-seat aircraft were subsidized by the Canadian government and sold below their manufacturing price.

Boeing alleged that it had suffered damage because of these subsidies, which it considered undue, granted to its Quebec competitor, which would have allowed it to offer prices to Delta Air Lines that the American manufacturer considered derisory, to get an order for 75 CS100 devices in 2016.

A gain for innovation, says Bombardier

“Today’s decision is a victory for innovation, competition and the rule of law,” Bombardier said in a statement released Friday afternoon, minutes after the USITC decision was announced. .

The manufacturer recalls that “C Series aircraft are the most innovative and efficient aircraft to have been created in a generation. Their development and production represent thousands of jobs in the United States, Canada and the United Kingdom. ”

Bombardier shares on the Toronto Stock Exchange jumped in minutes on Friday to a three-year high. The stock closed the session at $ 3.54, up about 15%.

Bombardier intends to focus on finalizing its partnership with Airbus, under which the European aircraft manufacturer will become the majority shareholder in the C Series program.

Unexpected victory

Bombardier’s chances of winning seemed slim at first. Several Canadian observers, including in the federal government, predicted a Boeing victory.

That’s not what the analysts were planning.

Isabelle Dostaler, Dean of the Faculty of Administration at Memorial University of Newfoundland

But how will this news be welcomed by the Trump administration, which advocates protectionism?

For dean of the Faculty of Administration of Memorial University of Newfoundland, Isabelle Dostaler, “Today’s decision may seem negative for Boeing, but it has clear benefits for many suppliers in the field of aerospace “. She recalls that “it is not only President Trump in the United States, there are probably intelligent people who understand and are able to analyze the situation, which is more complex than it seems . ”

The plan continues

“For us, the file is closed, it’s behind us,” adds Olivier Marcil, Vice President of External Relations at Bombardier, who says the company remains “focused on delivering aircraft.”

The Quebec aircraft manufacturer also intends to maintain the secondary assembly line in Alabama. The planes that will be built there will be “dedicated to the American market”, says Mr. Marcil.

The executive president of the European aircraft manufacturer Airbus, Tom Enders, who evokes an “indisputable” victory, is committed to accelerate the maximum project of a new assembly line in Alabama.

In a statement to Reuters, the boss of Airbus did not fail to criticize the attitude of Boeing. “I have never heard [speak] of a good aggressive strategy against his own client and that’s why I’m staying out of the way,” said Enders. I do not think it’s a way of doing business. ”

Ottawa and Quebec applaud Bombardier’s victory

Expressing great satisfaction with the decision, Foreign Affairs Minister Chrystia Freeland said Canada’s aerospace industry “supports more than 200,000 middle-class jobs across the country.” She added that the federal government will “continue to vigorously defend the Canadian aerospace industry and its workers against protectionist business practices.”

Reacting to his Twitter account, the Federal Minister for International Trade, François Champagne, believes that it is a “good result for Bombardier, for our aerospace sector across the country, for our workers, for equity”.

“Logic has prevailed, it’s good news, it’s really good, we’re very happy,” said Quebec Premier Philippe Couillard, who was participating in a media scrum in Montreal. Shanghai, China.

According to him, the “totally unexpected” decision validates the credibility of the US International Trade Commission, which would not have been influenced by Donald Trump’s protectionist policies. “It’s reassuring that the rule of law applies,” he said.

The Prime Minister believes that the unanimous verdict should discourage Boeing from appealing.

A welcome decision

“This is the best news we’ve heard in at least a year, with the sword of Damocles hanging over the workers,” said David Chartrand, International Association of Machinists and Workers. aerospace.

“This is a huge win for Canadian workers, but it leaves many unanswered questions,” says Unifor President Jerry Dias, referring to Bombardier, which “sold a large part of the C Series to Airbus.”

British Premier Theresa May also welcomed the move as Bombardier played “a vital role” in Northern Ireland’s economy, she said.

“It’s a fair decision,” said Steve Turner, the Unite the Nation representative, who said “Bombardier workers in Northern Ireland and the entire UK production chain will push a huge sigh of relief.

The American company Delta also welcomes this decision and wants to continue to strengthen its fleet of innovative CS100 aircraft.

Boeing disappointed

Boeing, who did not say he was going to appeal the decision, said he was “disappointed” that the US International Trade Commission does not recognize the harm he claims to be a victim of. “We are going to look at the Commission’s opinion a little more in depth as details are published in the next few days,” said the American manufacturer.

Dee Mongo

Dee Mongo is a graduate of UFT. She’s based in Toronto and has written for Maclean’s, Motherboard, the National Post, and the Huffington Post. In her spare time, she plays AC/DC on the ukulele and does psychic readings for B-grade celebrities. Dee is our tech/finance correspondent.